Last updated April 7, 2021

Dateline: Kuala Lumpur, Malaysia

I have an attorney friend who likes to tell the almost mythical story of the Chinese man who always had a fast junk boat with a few gold bars and a second set of papers ready for when things went bad. 

While that idea might seem foreign to you, it’s a much more commonplace concept than it seems. After all, you wouldn’t put your money in an uninsured bank. You wouldn’t leave your home or business uncovered. Why should your citizenship be any different?

The point of the story that my friend likes to tell is that everyone needs some kind of insurance on their citizenship. 

Citizenship insurance is having a contingency plan in place in case you no longer want to live in your home country. It is having a backup citizenship and passport so you and your family can leave quickly, safely and legally if you decide where you are is no longer conducive to your comfort and happiness..

At Nomad Capitalist, citizenship insurance is a very important concept for us. There are two big reasons for going offshore: the first is what we refer to as a Plan A. People following these plans are looking to get a second passport so that they can get rid of their current citizenship. 

This may be for privacy, freedom, financial reasons or they simply would like to live in a different country. Some people develop these types of plans so that they can send their kids to better schools or more affordable universities.

For example, if you are from the United States and want to live in the European Union, you would create a Plan A to help you get permanent residency and then a passport.

But what is your Plan B in case that doesn’t work out? 

This is why you get citizenship insurance.


If you’re a high or ultra-high-net-worth individual, you have a lot of insurance policies to help you cover your lifestyle. You have insurance for your car, your home, your business, fine art or jewels, and anything else of high value.

There is a growing trend in the world where people in countries like Russia, China, Turkey or many places in the Middle East are taking this idea of insurance a step further by going out and getting second passports.

In fact, a recent study of ultra-high-net-worth individuals said that a very significant percentage of the demographic in emerging countries had or were making plans to obtain a second passport. This is because there is always the potential for things to fall apart at home. 

For example, there are a lot of people in China who are chasing a second passport. They want to ensure that no matter what the government does, no matter what happens politically and socially in the country, they can take themselves and their family elsewhere.

The goal is to go somewhere they can’t be refused entry no matter what the situation is back in China.

They want citizenship insurance— a Plan B for when things go bad in their home country.

Now, getting a second citizenship also gives people visa-free travel privileges and the perks of being associated with the second country. But in most cases, the biggest reason for securing a second passport is the need for an insurance policy.


Citizenship insurance isn’t about doom, gloom, and doomsday prepping. It’s about diversification. 

The reality of the world is that many governments are putting increasing restrictions on their citizens. In the United States, if you have a $50,000 tax debt, they can take away your passport or refuse to issue you one. 

You might not think this would be a problem if you just stay up-to-date on your taxes, and I’m right there with you. Our plans and strategies focus on legal tax reduction and taking your life offshore so that you can go where you’re treated best.

We don’t support tax evasion.

The problem is that, sometimes, a tax agency makes a mistake. Yes, they’re not infallible. I know this from personal experience from early in my business career in the United States. 

I had already paid my taxes, but I had to fight to demonstrate that I had done so because a mistake led the IRS to believe that I owed twice as much as I had already paid. Now, at that point in my career, the payment they wanted wasn’t much, and they stated that 22-year-old me owed something in the neighborhood of $1,200. 

Imagine if they had thought I owed them $50,000! It would have been easy for them to cancel my passport.

 But it isn’t just about taxes, either.

Today, there are more countries telling their citizens where they can and cannot travel. In studying different governments around the world, there’s a trend among governments to impose restrictions on the movement of their citizens. At the very least, they are giving themselves the power to create more limits in the future.

In a very real way, having only one citizenship makes you a slave to that country and whatever they decide.

People in a lot of countries like China and Russia understand this. They can see the cracks in the wall, the fault lines. They understand that if things go badly, they could be left dealing with the consequences and want a way to protect themselves.

People in the US and other western countries, on the other hand, don’t feel the same need. They can understand why someone in a place like China might be worried, but could never imagine something bad happening in their backyard.

In all my years of travel and designing offshore strategies, I’ve not only studied history and the different trends around the world, I’ve also talked with people from every corner of the globe about what they’ve seen in their countries in their lifetimes.

And if there’s one thing I’ve learned, it’s that the way countries change their policies to limit their citizens happens very slowly, then all at once.

There are plenty of people throughout history who could have benefited from a second passport, but they weren’t proactive enough to go out and get one while they could.

One of the big things I see in the western world is that governments are increasingly looking to raise taxes. Countries that don’t have wealth taxes are discussing implementing them. There’s a big target on the back of high-net-worth-individuals in countries like the US where politicians want to raise their taxes up to 70%.

They want to confiscate a part of your wealth and force you to do all sorts of other things with your money.

Having a second passport puts you in control, no matter what the politicians do and no matter who gets elected. You always have the opportunity to go somewhere else that will treat you better.

There are people who we work with who have needed a second passport. We’ve gone through creating a strategy for them only for them to decide that they’ll get around to it later. 

Then, before “later” came around, they had a very urgent situation come up and they needed to rush through the process. They ended up spending a lot of money, going through a lot of hassle, and suffering a lot of stress often to not make it in time.

Sometimes situations come up where, if you haven’t already obtained that passport, it’s much too late to try.


The positive side of citizenship insurance is that it can have benefits that reach beyond your present situation. Having a second citizenship can allow you to leave a legacy that your family can benefit from. In many cases, you can pass your new citizenship down to your kids and grandkids. 

In fact, looking at your family tree is where you should start when it comes to getting a second citizenship. A parent or grandparent could be your chance at claiming another citizenship for practically free.

Others may choose to get their citizenship through investment. Many countries have plans that allow you to get a passport in a matter of six to twelve months after investing in some aspects of the country’s economy. You can hold that passport for the rest of your life all while making investments that have the possibility to earn you higher returns than you would see at home.

If you have a second citizenship, you get the benefits of living in both countries. You can send your kids to school where you want. You can live, work, and do business without restriction in either country.

And, if that second citizenship is somewhere like the European Union, those benefits and opportunities could expand to a whole block of different countries.

If at any point one of those citizenships starts causing you problems, you have the right to either exit the country and leave it behind, or even give up that first citizenship. 

Renouncing citizenship isn’t a decision to be taken lightly, I understand that most people don’t want to leave their home country. They want to remain a citizen of the country in which they were born. That’s all fine.

But, if you’re a successful person, you owe it to yourself to have an insurance policy for your citizenship that will protect you in the future. There’s no reason it should be different from any other important asset in your life.

There are ways to get started inexpensively. There are also more expensive ways to speed things along. However you end up getting it done, the important thing is that you are prepared and protected when you have a citizenship insurance plan.


You can’t buy insurance after you’re already robbed. You can’t buy insurance after your house burns down. You can’t buy insurance after the car crash.

So when’s the best time to buy car insurance? Well, immediately when you buy the car. You don’t wait around. You don’t drive the car around for a month and figure you won’t get into an accident now, so you’ll buy it later. 

You never know when disaster is going to hit. 

When the people in places like Greece or Cyprus couldn’t get their money, the government or banks didn’t put out a notice that said, “90 Days Notice: just so you know the ATMs won’t work for a while.” It just happened. When countries raided their pension funds because they needed the money, they didn’t give anyone notice.

But that was Greece and Cyprus, not the United States, right? Famous last words throughout history: “It can’t happen here.” 

Especially in the western world, people have not seen what the government is capable of in their lifetimes. Or they’ve seen it a lot, but brush it off because they figure it’s different in countries outside of the West.

If you have this mindset, you aren’t going to be prepared. 

You don’t have to live your life always under the assumption that the worst is going to happen– but wouldn’t you like to have insurance before the proverbial house burns down? 

Another thing I hear often is, “When things get bad, I’ll think about it.” Well, first of all, thinking about it is worth nothing. Secondly, if you keep putting it off, you’re either never going to do it or you won’t do it in time. 

There are many different ways to get a second citizenship and some of these methods take longer than others. If you are trying to get citizenship through naturalization, the process takes years. If you don’t start now, you might not get your citizenship before the process requirements change. 

What if the country you want your second citizenship from stops the program? 

Every year, new residence and citizenship programs either go up in price, become more difficult, or get canceled altogether. Just in the last year you’ve seen programs like those in Canada simply go away. 

It’s always a game of finding what’s working now but when you’re in you’re in. When you get the passport, it’s yours forever. When you get the bank account, they’re probably not going to close your account even when the rules change.

So if you’re serious about getting into the offshore world, and serious about having a second citizenship that can protect you, why not start the process now? 

Andrew Henderson
Last updated: Apr 7, 2021 at 1:57PM