Dateline: Riga, Latvia
What would you say if I offered you a second passport in Russia?
When my mother flew to Moscow to adopt the first of my siblings from Russia in 1994, neighbors asked in hushed tones if she would even return.
As if any westerner who showed up at the Moscow airport would be thrown in a cage and left to rot, rather than flagged through immigration with a yawn.
Heck, the Soviet Union did get away with the draconian practice of taxing its citizens living abroad long ago, something the Land of the Free still has yet to do.
Russia, or the Russian federation, is certainly throwing its weight around these days by invading and seizing cities in Ukraine in February 2022.
If you are a US citizen, you have to ask yourself: do I want a second passport in as small and insignificant a country as possible, or do I want a citizenship from another world power that may be more lenient on taxes and offshore policy? There are certainly arguments for being a citizen of Liechtenstein or San Marino, or even Singapore; but those citizenships are hard to come by.
Meanwhile, the small Caribbean nations that offer near-instant citizenship in exchange for investment are becoming a bit devalued. St. Kitts and Nevis, which has the longest-running such program, recently lost visa-free access to Canada and an attorney friend of mine suggests Europe might be next.
While becoming Russian citizens may not sound that appealing to many, it is just another option available to you.
About Russian Citizenship
The concept of “second citizenship” in Russia is frowned upon. Russia is one of a shrinking number of countries that technically prohibit the practice.
Russia gets a bad rap for taking such a hard line against the concept. To them, a Russian is a Russian.
However, I know a number of people with US and Russian citizenship.
Technically though, Russian citizens are allowed to have dual citizenship only if there is a treaty on recognition of dual citizenship between Russia and the other country.
Russia has dual citizenship treaties with just two countries: Tajikistan and Turkmenistan.
Currently, you are merely required to declare your foreign country to the government. Those that don’t live in Russia don’t need to make such a declaration until they return to Russia.
Of course, anyone who is born to a Russian parent, who was a former citizen of a pre-USSR country, or was born on Russian soil before a certain date is eligible to claim or reclaim their Russian passports. Basic citizenship by descent principles apply.
For those without Russian blood, however, there are three ways to get citizenship, with each requiring that you obtain a temporary residence permit and wait several years.
If and when you eventually qualify to obtain Russian citizenship, you’ll receive a passport with visa-free or visa-on-arrival access to 105 countries, including all of non-EU eastern Europe, Mexico, Chile, Panama, South Korea, Malaysia, and Hong Kong.
So how do you get started?
Obtain Russian Citizenship by Investment
Russia favors foreign citizens that are entrepreneurs, investors and highly skilled employees.
If you’re self-employed and have a successful business, you can move it to Russia and potentially qualify for citizenship in three years.
You can also start a new business to qualify for citizenship by investment. The criteria for entrepreneurs is straightforward: generate 10 million rubles in taxable revenue each year for three years into a Russian company formation which creates at least 10 jobs.
In 2020, that would have been a little over US$150,000.
With the ruble in free fall, that number today is less than US$105,000.
If you wanted to bet on the ruble and diversify out of dollars, you could do so and basically cut your immigration “costs” by half. I put “costs” in quotes because, outside of the actual taxes, there really are no costs at all.
You’re merely enjoying the benefits of a profitable business and paying some tax as a result.
You might even say they’re paying you to work toward citizenship. If you become a tax resident of Russia, tax rates on dividends and ordinary income are typically in the teens, much lower than the United States or Western Europe.
If you don’t want to run a business yourself, you can buy into a larger business. With an investment of the same 10 million rubles, you can own 10% of a profitable business that pays at least $100,000 per year in taxes.
Heck, if you have a business that generates a significant profit now, you and your friends could each own a piece of the business and qualify.
As long as you are profitable and pay taxes for three years, you’ll be entitled to apply for a Russian passport.
When you compare the “costs” needed to acquire Russian citizenship to the mid-six figure sums for Caribbean citizenships that don’t offer any kind of support to their citizens, it’s not a bad deal.
Becoming Russian Citizen by Marriage
Call it From Russia with Love. For years, men have been flocking to Russia and neighboring countries to meet derisively-termed “mail order brides” that they immediately bring back to the United States.
It is possible to turn the tables.
Russia is one of many countries that offers an expedited or more simple path to naturalization for spouses of their citizens.
Upon marriage to a Russian citizen — resident in Russia — foreign spouses are eligible for a residence permit regardless of whether the country’s quota on foreign residents has already been filled that year.
The confidence in your legal status in the country is priceless.
You can start the process by simply walking into the appropriate government office including a Russian consulate.
No appointment needed. No nonsense. After three years of marriage and tax residency in Russia, you are eligible for the Russian citizenship application process through naturalization.
You will need to have some level of fluency in the Russian language, which is easier to learn than you might think, by order of the Russian Ministry.
And, unlike the US or Europe, Russia’s tax rates are quite low and most income is taxed at a flat rate. Russian citizenship may seem like an unlikely route to a second passport.
For some, however, it could be the right solution. That is why it is so important to know exactly what you need from a second citizenship.
Ultimately, Russia is one of three major superpowers, even despite their current economic woes.
That said, if you run a business or have a highly impressive resume that can land you a job, Russia is basically making getting Russian citizenship process free for qualified immigrants. Something to keep in mind.