Last updated October 14, 2020

Dateline: Dubai, United Arab Emirates

I’ve spent the last couple of days here in Dubai working on a big personal project. It’s always exciting to take action and achieve my goals. Doing so always reinforces the importance of knowing exactly what my goals are and the price I put on every opportunity.

In fact, just a few weeks ago, we discussed the importance of knowing the return on investment of a second passport on Nomad Capitalist Live. We talk about second passports all the time here at Nomad Capitalist, but it’s not that often that we look at them from this perspective.

When people come to me for help, it can be for a number of different reasons. When the questions are about creating strategies to pay less in tax, moving your company offshore, or optimizing your financial strategy with the best banks while you work and travel, the answers are pretty straightforward.

You can easily tag a number on your investments, company profits, taxes, etc. But there is one aspect of the Nomad Capitalist life that is harder to pin down and that is the ROI of getting a second passport.

How can you know if it’s worth it for YOU to get a second passport

What’s to lose and how much do you have to gain? 

I’ll be honest with you, I think a lot of people think a second passport would be nice to have as an insurance policy or Plan B, but not many understand what’s really on the line.

When people tell me that they want a second passport I always have to ask them why. Some say they worry that the US is about to go off the deep end and start canceling passports. If you feel the same, ask yourself, how that will impact you.

If your ability to travel was suddenly restricted, how would that affect you? Is there a possibility that you could get stuck overseas somewhere without a second passport? Is that an issue for you? 

Start asking yourself these kinds of questions and you can begin to figure out the potential loss and what’s at stake.

Some people, however, really don’t have a need to get a second passport. That’s one reason I don’t operate like a lot of other folks in the second passport space who purposely create fear to get you to invest in a second passport. 

I’m not here to make you believe you need a second passport out of fear. I’m here to help people who want to solve a specific problem and know exactly how they can benefit in that regard by investing in a second citizenship.

Consequently, it’s very important for you to know how to calculate the ROI on a second passport to determine whether or not you actually want one. 

You have to put a monetary value to it, but in most cases that all depends on what a second passport is worth to YOU. So, let’s look at the different reasons you could need a second passport and determine how to evaluate each need to know your potential return on investment.


Many people pursue a second passport as an insurance policy — what I like to call citizenship insurance. If that is your motivation, what exactly are you protecting? And how much is it worth?

To illustrate, consider your car insurance policy. What are you protecting against with car insurance? Let’s say you’re protecting against the possibility of one day turning the wheel in the wrong direction and killing someone. The monetary cost for you in such a tragic situation would involve the possibility of being sued for a million dollars. If that possibility exists, then a million-dollar insurance policy is probably worth it.

But do you know the potential perils or costs when it comes to having a second passport? To calculate the ROI on a second passport as an insurance policy, consider placing a monetary value on some of the following situations.

  • What would it cost you if you couldn’t travel?
  • What would it cost you if you couldn’t use your passport to access your bank accounts?
  • What would it cost you if something happened to your passport?


A different approach to calculating the ROI of a second passport is to consider the upsides. Would a second passport give you more and better investment opportunities? 

For example, getting a second passport in many countries in Asia will give you the ability to buy assets that you couldn’t purchase as a non-citizen.

Depending on where you live now and what country you get your second passport from, it may provide more opportunities for visa-free travel. 

Let’s say you’re from China, India, Morocco, or any number of places and you have business that you could be doing in Europe. Every day, every month, every year, you can’t travel to Europe to do business, or you’re delayed in traveling because you have to apply for visas and sometimes you get rejected. 

That’s costing your business money.

Another opportunity I recently discussed with a client is the ability to give your children more opportunities. I’m getting more and more families coming to me for help and just the other day a man with six children explained that he is looking offshore to provide his children with more opportunities and options.

Giving your children two citizenships will definitely give them more options, but what exactly do those options look like? For one, you can expand their educational opportunities. I hear of people all the time who are working to save a quarter of a million bucks for every child’s college expenses in the United States.

The thought that someone is saving up a million dollars to send four kids to college makes me almost sad because, first of all, I don’t know if you necessarily need college. Secondly, with the right citizenship program, you could send your kids to school — whether it’s college or even an elementary school — in Europe or elsewhere at a fraction of the cost.

There’s a return on your investment.


Tax savings are the easiest ROI to calculate for your second passport. I recently wrote an article looking at four different case studies of individuals who were considering renouncing their US citizenship. One of those case studies was of a man who works as an employee overseas earning a million dollars a year.

Because of his employee status, he only gets certain exemptions on his US taxes and ends up paying between $300,000 and $400,000 in taxes every year. If he were to get another passport and renounce his US citizenship, the ROI on such an investment would not only be the annual $300,000 to $400,000 he would save in taxes, but also his tax preparation fees and all the hassle. 

He could easily go out and get a Dominica passport for $175,000 and get a return on his investment in as little as six months.

If you go the route of renouncing US citizenship, here are a few of the costs you should take into account:

  • The cost of renouncing your US citizenship
  • Your current tax burden
  • Tax preparation fees
  • How much money you are losing in your business through US citizenship (and all the regulations that come with it).

While I don’t always recommend that US persons go out and buy passports in the Caribbean, it may be the right solution if you’re an employee that has no other way to decrease your tax obligations. 

If this is your situation, run the calculations and you can get a better idea of your return on investment.


Now, keep in mind that there may be a negative cost to renouncing US citizenship. Most people I talk to don’t hate the US — they’re just tired of dealing with all the nonsense and they don’t feel it’s fair for them to be taxed when they don’t even live there.

Many of these people would like to keep their US passport. However, as much as they wish that circumstances were different, they are looking at the possibility of renouncing their citizenship. 

For those people, renouncing US citizenship may be an emotional decision. For some, it may even make them less productive. You need to factor such possibilities into your decision.

Also, recognize that there may be certain things in the US that you will lose access to. Depending on which second passport you buy, you may have to apply for a visa just to visit family. 

Additionally, there’s the risk of paying a higher tax rate when you sell your investment properties. Everything has a positive cost and a negative cost.


Second Passport ROI

Knowing how much you can spend is just as important as calculating the ROI on your second passport investment.

Finally, figuring out how much you can actually afford to spend on a second passport is vital. Otherwise, you’re just going to run around blind. You don’t go to buy a house or a car not knowing what you can afford. You need to do your due diligence, know what you’re getting into, and know your numbers — including how much you can or can’t afford to spend. 

If not, you could end up with a bad deal.

We get hundreds of emails every week from people asking what they can do with $3,000 to become an EU citizen. That’s like saying you have $3,000 and want a Mercedes. You can’t do it. There are no 20-year-old dinged up European passports on the market. That’s not how this works. It just doesn’t exist.

The same thing goes for the people I talk to who say that they don’t know how much they paid in taxes last year, but it was too much. 

You’ve got to know the answers to these questions. 

You’ve got to know your numbers. 

If you don’t know what the potential costs are — whether it’s actual monetary costs, wasted time, hassle, or lost opportunities — you can’t move forward. You’ve got to know.

So, figure out what you want, but also figure out what you can (and cannot) afford.

I make a lot of decisions in my life by acting like I’m an insurance company. This is how I can come up with specific numbers for determining what to spend on things like citizenship insurance. 

For example, what is the chance that a global pandemic is going to come and lock everyone down in their homes and then they declare martial law and freeze your bank account? Let’s say it’s 2%. 

What would be the cost if that happened to you? For certain people, it could be millions of dollars. So, if the cost to you is 10 million dollars and there’s a 2% chance, then $200,000 is your number. This means that if you can spend less than $200,000 getting a passport, it’s worth it. 


When it comes to crunching the numbers to calculate the real ROI of a second passport, you’ll have to add up a number of costs:

1. Consulting Fees

These should be relatively uniform as they are the fees you pay someone like me to tell you which program best suits your needs. In the long run, the goal is for you to save more money and time than you paid in fees. 

However, countries like the United States — where a large investment is required — have spawned a cottage industry of consultants who vet approved investments. 

It is the same with well-connected developers who charge huge fees for economic citizenship programs in the Caribbean. 

(Free advice from this expert: if you’re a US citizen or other westerner, you can probably avoid the high fees of these pay-to-play programs.)

2. Legal and Government Fees

Countries like the United States charge high fees to process your residency application, and additional (often much smaller) fees to become a citizen. The wealthier the country, the more the lawyers will charge, too, especially for popular programs like EB-5. 

That said, even Panama’s second residency program has higher government fees than what some folks who heard it’s “easy” would believe.

3. Sunk “Investments”

An “investment” you can’t recover is certainly part of any second citizenship ROI calculation; in some cases, it could be the largest factor. 

Economic citizenship programs are the most notorious examples of these, requiring donations that you’ll never see again. Alternatively, these programs require you to buy overpriced real estate that will make you wish you had just made the donation.


For some people, a second residency can resolve most of their issues. Unfortunately, US citizens are not among those people. Because of citizenship-based taxation, the only way for a US person to completely escape the crushing weight of US taxes is to renounce citizenship.

However, not everyone who visits this site is a US person. Citizens of countries like Australia, Canada, and even the UK have the option of reducing their taxes through a second residency. Generally, with residency and an established tax domicile somewhere else, you are off the tax hook in your home country.

However, make sure you follow all the rules established by your home country to ensure that you are indeed a tax non-resident. You don’t want to end up like this Australian who ended up having to sell his new home and pay 35% of his wages to the government until he paid back what he thought was tax-free income earned offshore.

Once you confirm that you’ve followed all the rules, you can begin enjoying the ROI of your second residency.

For instance, Canada’s personal income tax rate is 33%; meaning a Canadian earning $200,000 USD/year would be paying $66,000 in personal income taxes every year. With a bank deposit of $5,200, you can obtain a second residency in Paraguay where the taxes on local source income are only 10%. 

That translates to tax savings of USD$46,000 a year, minus the $5,200 for the first year (which still brings your tax savings to over $40,000).

What would you do with an extra $40,000 in your pocket every year?

Or, consider a citizen of the UK looking to save on taxes and prepare a Brexit-conscious offshore plan. With the same salary of USD$200,000, a UK citizen would be paying $90,000 to the British government every year. By getting residency in a place like Georgia — where income is taxed at the low rate of 20% — they could save USD$50,000 a year. 

Or, to maintain residency within the EU, they could go to Estonia for the same rate, or save even more with a second residency in Bulgaria where income is taxed at a rate of 10%, bringing their total savings to USD$70,000.

If you could save $200,000 dollars a year and plan to be offshore for a long, long time, over the years it will add up to millions of dollars. And your investment towards those millions may just be the cheapest citizenship by investment program in the Caribbean. That’s maybe a hundred thousand dollars plus some fee. 

Still, you’ll have an ROI in less than a year. And since you said you’re still going to be earning money for another ten or twenty years, you’re going to make this a 25 times return.

Every day that you’re not working on one of the options for a second citizenship is a day that you don’t have your second passport, a day you’re losing money. 


ROI on a US passport

Depending on who you are, where you’re from, and what your goals are, you will get a very different ROI on a US passport.

In the end, where you go and what residency or passport you get all depends on your goals. For example, some people may even have a reason to obtain a second passport in the United States. The US EB-5 program is popular among Chinese and Middle Eastern families that believe the United States is the best place to live and raise their children. 

While I happen to disagree, it’s not my position to judge their decision.

And, at first glance, if you can afford to invest in the United States, a US passport might not seem like a bad deal. A family of four can invest as little as $500,000 to qualify and should pay less than $100,000 in legal fees. If you can source one of the good investments, it’s even possible that you could pay back part of those legal fees with future returns.

$100,000 for four people to get one of the best passports on earth doesn’t sound too bad. In fact, I’d happily stroke such a check for an equally good travel document right now.

Of course, the catch is that naturalization as a US citizen requires actual residence. Ditto for Canada, the UK, Australia, and other developed English-speaking countries. You’ve got to put in your time in these countries, and that means paying tax on your worldwide income for five years.

I’ll let you add up that cost.

And, let’s not forget that becoming a US citizen also means a lifetime of reporting and regulations. Plus, if you ever get sick of US citizenship, you’ll have to pay to get rid of it.


In conclusion, remember that a second passport isn’t for everyone. Because of that, you need to do your homework and be sure of the reasons why you want one.

If you’re looking to solve a specific problem, set up a Plan B, or provide yourself an insurance policy, you have to know what’s involved. You have to know what you’re getting into, what problem you want to solve, and what the potential and actual costs are.

Any problem you’re going to solve, you have to ask yourself how you’re going to break even because none of this stuff we talk about is free. Even if you do it yourself, getting a second passport requires government fees, lawyer fees, and even taxes in many cases. 

Then there’s the cost of doing it wrong if you don’t hire professionals, so that adds up too, along with all the wasted time.

None of this stuff we talk about is free.

If you’re the kind of person looking to renounce your US citizenship and you’re making good money — half a million, million bucks a year — chances are that your ROI will be pretty good. If you can make your money back in a year, that’s great. Whether your business grows or not, you save the money.

For the average person, it’s better to find a residency program, bide your time, and then sit back and wait a few years before getting your passport the old fashioned way.

Whatever your case may be, I’m your guinea pig. I get second passports because I think it’s fun and interesting. I’ve tried on quite a few programs over the years and you can benefit from that experience.

If you want my help determining whether a second passport is right for you and what program suits your needs, just reach out to our team and we can start working toward that second passport today. 

Just come prepared with the numbers so we can calculate the true return on your investment.

Andrew Henderson
Last updated: Oct 21, 2021 at 8:52PM