Dateline: Tbilisi, Georgia
Not too long ago I was sitting having tea at the Four Seasons Hotel Gresham Palace in Budapest, Hungary. Located along the River Danube, the palace capitalizes on its beautiful setting with it’s stunning Art Nouveau architecture and fascinating history.
On this particular day, I was talking to a client who explained that his goal is to have a condo on every habitable continent. As such, he is working on becoming a resident somewhere on each one. Novel goals like this resonate with me since one of my life goals is to visit every country on earth.
Whether it’s historic buildings that have been converted into luxury hotels, attractive tax systems, or great real estate markets, every country has something new and exciting to offer. I don’t want to miss out.
If your offshore plans involve similarly fun and adventurous end goals, there’s a fun new passport that has come onto the international scene: the AU passport.
What is the AU passport?
So what is the AU? And what does it’s new passport have to offer? The AU — or African Union — is an international organization comprising 54 African nations (every country on the continent minus Morocco).
The African Union has existed in one form or another since 1963 and has sought greater unity across the continent over the years. The new electronic, biometric passport revealed by the AU in July is the leading project of the organization’s Agenda 2063.
According to an AU press release, the passport “has the specific aim of facilitating free movement of persons, goods and services around the continent – in order to foster intra-Africa trade, integration and socio-economic development.”
Though it’s availability is currently restricted to heads of state, ministers of foreign affairs and permanent representatives of AU member states, the goal is for the Common African Union passport to be available to all African citizens by 2020.
In preparation for the increased integration, many African nations have begun to make changes to their visa restrictions. Senegal, Seychelles, Mauritius, Ghana and the countries of the East African Community (including Burundi, Kenya, Rwanda, Tanzania, and Uganda) have all relaxed or eliminated their visa restrictions in recent years.
Challenges to African unity
Despite such progress, there are still many obstacles limiting the possibilities of making the AU passport a functioning reality. Currently, the majority of AU member countries require visas from visitors from other countries on the continent. In addition, corruption, inefficient civil registration systems, and unnecessary and costly bureaucratic procedures mean that 37% of people in Sub-Saharan Africa have no legal identification.
These and other challenges are part of the reason why intra-continental trade in Africa makes up only 11% of the region’s trade. While the AU passport aims to reduce such issues, it will also have to deal with the underlying problems involved if greater unity is to be achieved.
Another challenge is the time and resources needed to get nations up to speed on the technology the passport utilizes. Anti-immigrant sentiment is also high in many countries where visa requirements were created to intentionally keep people out. And then there are always the corrupt governments that use passports to silence their critics. Chad, Djibouti, Eritrea, Sudan and Zimbabwe have all been caught confiscating passports from their opponents, whether they be trade unionists, opposing politicians, minority religious groups or human rights activists.
Getting up to speed on that technology will take time and resources that many nations do not have. Another factor in the way, he writes, is the anti-migrant sentiment, which is already high parts of the continent. Many visa requirements were implemented as intentional barriers to keep migrants from entering neighboring nations and competing for jobs.
While other countries have worked to create laws guaranteeing the right to a passport to every individual, it’s clear that Africa isn’t the bellwether of passport freedom.
The AU vs. the EU
Challenges and all, the African Union passport is a refreshing new development. One thing the AU has going for it is that it can learn from the mistakes of other organizations — namely, the EU.
The African Union is a very interesting concept because, unlike the European Union, they’re allowing freedom of movement without all the nonsense of Brussels telling the UK what to do, which led to the Brexit (link). My girlfriend is Polish and while they’re part of the EU, they refuse to adopt the Euro. Why? Because they don’t trust Brussels.
The European Union is not set up in the most harmonious way to allow freedom of movement and, seemingly, Africa may have accomplished that without all the international nonsense.
For citizens of African countries, this is a great opportunity with a lot of promise. Movement of people, ideas and goods is going to be a lot easier and a common passport is a step toward greater unity. We’ll have to wait to see what happens.
But what about the rest of the world? Could an AU passport have a place in your offshore plans?
How does an AU passport fit into an offshore plan?
Let me answer that question this way: The AU passport is a shiny object. If you’re looking for a second passport because you want to renounce your US citizenship, pay less in tax, or have a Plan B, then you probably don’t want an African passport.
However, that doesn’t automatically mean you shouldn’t consider it. In my mind, there are two reasons why you may want to obtain the Common African Passport. The first reason, as I mentioned earlier, is if you’re in the novelty club like I am. If you want to visit every country in the world, you’ll soon discover that some countries can be a real pain to get into.
African countries are horribly bureaucratic. I once read the Jim Rogers books Adventure Capitalist and Investment Biker where he talked about driving his car and riding his BMW motorcycle all over the world to learn about investment opportunities on the ground. Throughout his adventures, he constantly had problems getting into African countries.
So this passport could allow you greater ease of access to all of Africa.
And that ease of access will not only benefit serial travelers but people looking to do business throughout Africa as well. In fact, that is the second reason you may want to consider the African Union passport. Many of the stable African countries where you would want to invest are opening up and are increasingly more welcoming to foreigners. For those who want to be doing business throughout Africa, having an AU passport could be a potential plus.
Should you become an African citizen?
If you do decide to pursue citizenship in an African nation to qualify for the AU passport, make sure you get it from a country that will work. You have to be strategic about choosing the country you’re going to be from. It needs to be moderate and a place that is believable.
To illustrate what I mean, let’s take a look at the Cambodian passport. For starters, there’s a debate about how legitimate the program is, and I tend to think it’s not that legitimate. Either way, I’ve always thought that even if that program had legs to it, who’s going to think that you’re really Cambodian?
The only reason I would want a Cambodian passport would be if it allowed me to buy land in the country. In countries like Cambodia, you have to be a citizen to buy certain land like agricultural land, commercial land and spaces, ground floor apartments, etc. So a Cambodian passport may be good in that regard, but I wouldn’t be traveling as a Cambodian.
The same goes for an African passport. I wouldn’t get it for traveling purposes. Plain and simple, it would be difficult for anybody else to believe that I am originally from Africa.
There are reasons why I would recommend getting African citizenship — and by it an AU passport — to certain clients. In each situation, it would be for individuals who do it in tandem with other things.
You’re not going to want to renounce your US citizenship with an African passport, but if you were really desperate to renounce and you had a good residency somewhere else like in Europe, maybe you could do it.
Countries worth considering
In 2020, the passport will be available to more than just heads of state and diplomats. So you could start working towards citizenship in an African country now to be prepared for when the AU passport becomes available to the “public”.
To get an idea of your options, take a look at our article on the best passports in Africa here. In addition, I’ve provided my two cents on some of the more popular options below:
- The Comoros Islands: I’ve been harsh on this country in the past since the passport isn’t that great, but at one point, they offered citizenship by investment for only $45,000 and I ended up deciding to take them up on the offer. If you’re looking at the AU passport for the pure novelty of it, then just go for Comoros.
- The Gambia: This is the country where all the mainland Chinese went to to get permanent residency in order to get into Hong Kong. However, I would suggest staying away as the country’s iron-fisted ruler has promised to slit the throats of gay men, among other angry proclamations that make even Trump look decent.
- Mauritius: This island country offers permanent residence for investing in property, not a passport. It’s actually quite difficult to get a Mauritian passport.
- South Africa: While it’s possible to go there, I talk to people all the time who are trying to get out because there are more and more restrictions if you’re white. It’s a bit of a mess.
I’m sure there are a lot of countries where you could pay someone to get a passport, but who knows how that will work out. As a rule, avoid gray and black market passports. I wouldn’t want to be traveling around Africa with a questionable passport.
In most of these countries, you won’t get you much of anywhere by pursuing a passport. There aren’t that many good passports and it’s hard to become a citizen.
If you can spend $45,000 on a Comoros passport you can probably spend $100,000 on an economic citizenship in the Caribbean that’s a much better value.