Dateline: Cape Town, South Africa

One of the biggest concerns that second citizenship seekers have involves the lower quality of the passport they are obtaining through either naturalization or, as I did, through citizenship by investment.

The idea of being a US citizen, for example, and jumping through hoops to become Dominican or Serbian or Paraguayan seems odd to some people. These people have spent their entire lives accustomed to holding one of the “best passports” for visa-free travel.

Heck, I’ve even seen a couple examples of people from places like Egypt and Eritrea who, despite having a rather poor travel document, use the excuse of a potential second passport not being “good enough” as an excuse for not taking action. Funny how we as humans tend to make excuses for not getting what we think we want based on technicality.

We’ve spoken extensively about the value of what I call the “second-tier” passport. One of my favorite examples is how many westerners look down on Mexico – entire presidential planks are based on that. Yet Mexico has one of the best passports in the world. Anyone smart would gladly be Mexican in lieu of a “first world” nationality that taxes and spies on them.

When I talk to people about renouncing US citizenship, for example, many will insist that only a passport as good for travel is acceptable. Considering the US passport is among the five best in the world for travel, that’s a nearly impossible order. Add the fact that the people I work with don’t want to live in one place and pay a lot of taxes for five years; This makes getting the passport even more difficult.

The “Belt and Suspenders” Strategy
Visa-free Travel

Here’s the deal: if you want a “Plan B” passport, I certainly wouldn’t worry if it’s as good as the one you have now. A Swiss guy I’m working with is interested in purchasing Dominica citizenship by investment as a backup knowing full well that, if the worst happens, he’ll lose a little juice traveling on the Caribbean passport rather than his top tier passport.

Even more so, if you’re looking for better visa-free travel or a path to citizenship renunciation, it likely doesn’t pay to be TOO picky. One way to accomplish your goals without breaking the bank is what I call “the belt and suspenders”.

If you aren’t familiar with the term, belt and suspenders is an old term for a built-in redundancy. Both a belt and suspenders will hold your pants up, making the use of both together unnecessary. You either wear a belt like most of us, or rock it Larry King style, but not both.

In the arena of second citizenship by investment, a Belt and Suspenders strategy involves getting a lower-quality second passport AND a higher-quality second residency that may or may not lead to citizenship in the future.

By combining a decent passport and a better residency, usually in an area like the European Union that allows wide freedom of movement, you get the freedom of visa-free travel you want with the benefits that come from a more immediate passport.

Applying The Belt and Suspenders Strategy

Let’s say you’ve read the blogs that claim you can get Dominican Republic citizenship in merely two years through investment. Now, from people I know that got citizenship in the DR, that timeline is rather unlikely. For purposes of illustration, let’s assume that however long it took, you’re now a DR citizen.

If hanging out on the beach is your thing, being a citizen of a country that’s largely coastal is a great thing. If you’re a US citizen seeking to lower your taxes, you might be content to renounce your US citizenship for the white sands of DR.

However, a Dominican Republic passport isn’t so good for global travel. It may get you into some beach countries, but you’ll need a visa for Europe and dozens of other places. That can be rather inconvenient and turn you off from using the DR citizenship to its fullest potential.

However, under the Belt and Suspenders method, you can obtain residency in the European Union – or anywhere else you’d like to spend time – and improve your visa-free travel options immediately. 

By attaching a high-quality EU residency to a low-quality passport, you’ll increase the number of countries you can visit by up to 50%.

The Belt and Suspenders approach also separates the two most common reasons for wanting a second passport. It grants you personal freedom (i.e. lower taxes) and better freedom of movement.

For the same reason I often advise against owning your personal residence. It might make sense to separate the two goals of second citizenship into two different strategies. The desire to combine personal freedom AND travel freedom into one passport leads people to seek expensive solutions like Malta’s economic citizenship, which will relieve you of about $1 million.

Instead of spending $1 million, most of it never to be seen again, you could invest in a Tier B or Tier C passport that offers personal freedom, then invest another amount in residency.

Reducing Your Costs

There are numerous Tier B and C passports with similarly low prices that can be paired with European residency. In another example, a friend of mine recently obtained Armenian citizenship through descent; his grandfather was an Armenian citizen, which qualified him for citizenship, too.

Unfortunately, Armenia’s passport offers relatively weak visa-free travel with the exception of Russia; Armenians can’t visit the EU without a visa. My US citizen friend would be agitated waiting in visa lines as an Armenian if he renounced his US citizenship. It would be an instant demotion.

However, the Armenian passport that cost him a couple thousand bucks in legal fees could be paired with residency in Greece or Latvia, which requires a 250,000 real estate investment and a small government fee to obtain residency. Now, Greece doesn’t offer citizenship to non-Greeks and citizenship in Latvia takes ten years of actually living there to get. But European citizenship wouldn’t really matter under my Belt and Suspenders plan.

After all, Armenian citizenship is still a halfway decent citizenship to have. If my friend wanted to renounce US citizenship or do anything else that required his Armenian passport, he could. His biggest loss would be the loss of easy travel to Europe… which a residency in Greece, Latvia, or any number of other EU countries would solve.

This Belt and Suspenders approach makes sense, not only because Tier B and Tier C passports are less expensive and easier to obtain, but also because it dramatically lowers the hard costs you never get back.

While Greece or Latvia require investing 250,000 euros, you’d theoretically be able to get that back if you sell the real estate. Unlike an expensive citizenship where you never see the money again, your real estate should hold its value. (Sadly, Greece might not be the best place for this.) You’re tying your money up, but not sending it away to die.

Increasing Your Freedom

The Belt and Suspenders method makes passports that may have previously appeared inadequate become more valuable. My friend that thought an Armenian passport wasn’t good enough on its own now knows better. Starting a business, making an investment, or even depositing cash in a European Union bank will make his Armenian passport as good as most others.

Holding an EU residence permit also opens up several countries in Eastern Europe and Central America; even if your passport doesn’t allow you visa-free access to these countries, your EU residence permit will.

Of course, the EU isn’t the only place to get residency as part of a Belt and Suspenders plan, but access to the 28 countries of the Schengen Area makes it the most attractive. Countries from Colombia to Malaysia to Hong Kong allow the average investor or entrepreneur to obtain residence relatively easily.

The best part is that obtaining residence in many of these countries doesn’t automatically sign you up for tax obligations. If you don’t live in Latvia, for instance, you don’t pay tax there. You can easily use Latvian residency to travel throughout Europe with no home base, no obligation to pay tax anywhere.

The next time you think you can’t get a second passport quickly or easily, remember the Belt and Suspenders approach. The key is pairing residency with citizenship.

Visa-Free Travel with a Tier B Passport

When I decided to get my economic citizenship, my initial inclination was to go with Dominica.

Why?

First of all, I quickly ruled out all European citizenship by investment programs. For me —like any US citizen — paying €1 million for economic citizenship in Malta (€2 million in Cyprus) isn’t an attractive option. You already have great visa-free travel with a US passport, so why pay top dollar for something you already have?

And even if you didn’t make the million euro donation, you’d still be giving away €650,000. Well €650,000 plus purchasing a house and buying bonds, among other things. Even if you’re going to renounce your US citizenship, such expensive investment seems unnecessary when you have numerous decent alternatives.

Since visa-free travel is not the only reason to get a citizenship by investment, expensive European citizenship programs were out of the question for me.

If you’re Russian or Chinese or someone who has very bad visa-free travel, then maybe it’s worth it for you to pursue economic citizenship in Malta. By doing so you’ll give yourself a whole host of new travel options.

If you’re a westerner, though, you’re probably better off looking at the Caribbean. It’s more interesting and cost-effective. That’s why I chose to go with the Caribbean. Besides being the cheapest Caribbean passport, Dominica just seemed to make sense because the travel was actually pretty similar.

Even better, the countries opening up to Dominica for visa-free travel are increasing, with recent access approved to the Schengen area and previous visa-free access to the UK and Ireland.

So my inclination to look at Dominica and to choose it was partly because it was the cheapest economic citizenship program, but I also took visa-free travel into account. You may find that another program is a better fit for you depending on the countries you’ll be able to travel to visa-free, so let’s go through and look at each one and the biggest differences between them. Caribbean citizenship by investment is an effective route through which you can gain travel freedom.

Dominica

As of 2016, Dominican citizens have visa-free travel or visa on arrival access to 119 countries. This gives Dominica’s passport a ranking of 41st among all the passports in the world.

But where exactly can you go with a Dominican passport?

Having a Dominican passport allows you to travel to the northern part of South America, meaning every country minus Brazil, Argentina, Chile, Uruguay and Paraguay. The Central American countries of Panama, Belize and Costa Rica are visa-free, but you will need a visa for Mexico, Honduras, Guatemala, and El Salvador. Plus, as a CARICOM country, you will have freedom of movement throughout the Caribbean.

As mentioned, Dominica also has visa-free access to the European Union, as well as to the desirable locations of Hong Kong and Singapore. You will also be able to travel to several countries in Southeast Asia and Africa.

Dominica’s citizenship through investment costs $100,000 and you can find more details about it here.

St. Kitts and Nevis

St. Kitts and Nevis was the first country to offer citizenship by investment. In 2017, a St. Kitts passport got you into 151 visa-free and visa on arrival countries. This made it the 26th best passport in the world. The donation route will cost you $250,000, so let’s look at the 13 additional countries you can travel to for an extra $150,000.

As with Dominica, you will have full access to the Caribbean as a CARICOM member. You will also be able to travel to ALL of Central and South America, minus Mexico, Paraguay and Uruguay.

You’ll also have access to the Schengen Area, the UK, Ireland, parts of Africa and Southeast Asia, Hong Kong, and Singapore. Unlike Dominica, you’ll also be able to travel visa-free to South Korea and parts of the Middle East, including Iran, Jordan, Egypt and Israel.

The downside with St. Kitts and Nevis is that the program seems to be losing credibility and in 2014 the country lost visa-free access to Canada. So, unlike Dominica who’s on the rise, St. Kitts appears to be moving down.

Antigua and Barbuda

Antigua just started its citizenship by investment program in 2012. As of 2017, citizens of Antigua and Barbuda visa-free or visa on arrival access to 160 countries and territories. This has ranked the Antigua and Barbuda passport 30th concerning travel freedom (tied with Saint Kitts and Nevis passport).

Antigua and Barbuda’s major privileged offering that no other Caribbean country on this list can offer is visa-free access to Canada. 

However, Antigua’s program starts out at $250,000, so is travelling visa-free to Canada is actually worth an extra $150,000? Probably not. You can just apply for a visa.

Still, Antigua and Barbuda provides access to all of the Caribbean (it’s also a CARICOM country). It also provides access to Central and South America minus Argentina, Uruguay, Paraguay and Mexico. An Antiguan passport will also get you into Australia and the majority of Southeast Asia (minus Thailand). It will also get you into Nepal, parts of Africa (including South Africa), Hong Kong, Singapore and South Korea.

You’ll also have access to all of Europe (including Ireland and UK), the Middle Eastern countries of Egypt, Iran, Jordan, and Lebanon.

St. Lucia

With fewer options than Antigua and St. Kitts, but more than Dominica, St. Lucia is ranked 36th with visa-free and visa on arrival access to 127 countries. In 2015, Saint Lucia gained visa-free access to the Schengen Area, making the passport a more attractive option.

As a CARICOM country, you will have freedom of movement throughout the Caribbean. Additionally, the Saint Lucian passport gives you access to all of Central and South America minus Brazil, Uruguay, Paraguay and Mexico.

You will have access to limited areas of Africa and Southeast Asia. You will also have visa-free travel to Hong Kong, Singapore, South Korea, Egypt, Israel, Jordan and Iran.

In exchange for a donation of $200,000 to the government, citizenship by investment and/or businesses can be obtained. You can also obtain citizenship by other combinations of donations that you can find here.

Grenada

In 2017, Grenadan citizens had visa-free travel access to 124 countries, making it the 37th best passport in the world. You can obtain citizenship through investment with a one-time donation of $200,000 to the National Transformation Fund. And in just over 12 months, you will receive your citizenship.

Grenada is another CARICOM country, meaning you will have full access to other countries in the Caribbean community. You will also have visa-free access to every country in South America except Paraguay. However, in Central America you will only have access to Panama, Costa Rica and Belize.

Grenada has access to Schengen’s area and, interestingly, is the only country on the list with visa-free access to China. You’ll also have access to parts of Southeast Asia and Africa, as well as Iran, Jordan, Israel and Egypt. Last but not least, you can travel to Hong Kong, Singapore and South Korea on a Grenadine passport. As you can see, if Grenada is an affordable option for you, then there’s no need to dive into the belt and suspenders strategy. 

One Last Option

If none of these Caribbean countries are offering what you’re looking for and you have the money, let’s take a look at what you’ll get with a citizenship through investment from Malta.

Malta actually has the 10th best passport in the world. Thanks to its visa-free or visa on arrival access to a total of 167 countries. A Maltese passport grants you visa-free travel to the entire western hemisphere (minus Cuba), including the US, Canada and Mexico. If the US is a must for you to travel visa-free, then the Maltese passport might be worth it.

As an EU member, Malta also grants you freedom of movement throughout all of Europe. You’ll also have access to countries such as Australia, New Zealand, India, Pakistan, Bangladesh, Nepal, Japan, Hong Kong, Singapore, South Korea and all of Southeast Asia (with limited visa on arrival in Vietnam).

Finally, you’ll be able to travel visa-free to South Africa and other African countries, plus Iran, Iraq (limited visa on arrival), Egypt, Israel, Jordan, the UAE, and Kuwait.

Malta definitely offers greater visa-free travel than the Caribbean countries on this list, but is it worth the extra $500,000+? It’s important to think of all aspects before you make the decision, and it might be right for you. If you’re a westerner though, I’d bet applying the belt and suspenders strategy with Dominica probably makes the most sense.

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Andrew Henderson
Last updated: Oct 4, 2021 at 7:33AM