Dateline: Valencia, Spain
Last Wednesday, as I was flying through Switzerland on my way to Spain, I experienced an interesting incident. I’ve been spending a lot of time in Eastern Europe, and apparently that was enough to make the airport official take a second look at me and pull out every question he had about where I was going, why I was there, and how long I was planning on staying.
One team member who was traveling with me said later that she was worried they weren’t going to let me through. And that all happened with my US passport.
Now, imagine if you were Moldovan.
I talk to people from Eastern Europe who say this kind of thing happens to them all the time. Even Romanians — citizens of an EU member country — have said that airport officials will hold them back for questioning when they see their passport origin. Some have even been asked for their travel documents after they’ve boarded the plane.
You can imagine, then, that for people from places like Moldova or Serbia (countries that have visa-free access, but aren’t EU members) it’s just that much harder.
While citizens of non-EU countries in Europe have received visa-free access and are technically supposed to be let in (and most of the time they are), the process is not always as open or as easy as “visa-free” promises to be.
And then there are the instances when the EU simply refuses to grant visa-free access to countries like Ukraine and Georgia.
We talk all the time about getting second residencies, citizenships and passports — and there are real benefits to doing so — but not every second passport is made equal. You have to be aware of that.
I’m all about giving you the option to renounce your citizenship — if that’s what you want — but you’ll need to be prepared for everything else that comes with that choice.
You don’t want to get stuck just being Paraguayan alone.
While the US, UK, and other countries allow dual citizenship, ensuring that you’re ready to accept another citizenship means you’ll have to put yourself in the shoes of someone in that position.
I’m not saying you should freak out or not consider it, but do understand that things will change. If you’re a US citizen, for example, things will change dramatically once you renounce your US citizenship, especially if you’re doing business overseas.
In many ways, your life is going to be a lot easier, but in others, it will get more complicated.
Will your second passport cause you visa issues?
For example, chances are that your second passport will not grant you visa-free access to all the countries you are accustomed to traveling to without issues.
You may even run into issues despite having visa-free access. For instance, if I were a Moldovan and I were going to the EU for more than a week, I might consider getting a business and leisure visa just to know that I’ve already been pre-stamped.
The reality is, if you will be traveling on lesser quality passports, you’re going to have to get a visa to go somewhere. However, as I always tell people, you can be a citizen of the worst country on earth and still get a visa to visit the US. Just because you don’t have visa-free access doesn’t mean you can’t visit a country.
The challenge for someone living the nomad lifestyle is that getting a visa often depends on having a stable residence.
Bitcoin advocate, Roger Ver, ran into this issue a while back when he renounced his US citizenship to become a citizen of St. Kitts and Nevis. When he tried getting a visa to go back to the United States for a conference, he was denied on the premise that he couldn’t provide information on where he lived.
If you can resolve that issue, things might not be so complicated.
In fact, I just had three friends this week — two who are Georgian and one who’s Ukrainian — who got US visas that are good for ten years. But here’s what they do: they work and live in Georgia and Ukraine and have a long history there. They have some money and they are respectable citizens. They’re not living in Georgia three days a year and then bouncing around everywhere else on planet earth.
So be aware that if you are going to make a lesser-quality passport work in combination with visas, you may not be able to afford a nomad lifestyle to the extent that you might hope or to which you are accustomed.
To everything, there is a trade-off.
The second passport trade-off
As much as I hate to admit it, you are afforded certain perks for being a US citizen. Sure, the US and other big countries have problems and the way they run things is very frustrating, but you can get into a lot of countries with ease just by carrying an American passport.
So do stop and think for a minute about the trade-offs.
Not everybody is going to know where Paraguay is located. That may be a good thing, but it’s probably not a factor that will work in your favor. At least when you show up with a US, UK or Australian passport, everyone knows that country and most everyone will figure that you’re wealthy and let you in.
So keep that in mind.
From my experience working with individuals over the years, most people won’t need to worry about renouncing their citizenship. If you have your company in one country, bank in another, live overseas and are happy to live off the Foreign Earned Income Exclusion, then your offshore strategy can be relatively simple.
If you’re looking for multiple bank accounts and all kinds of foreign investments and passive income, then your life will be harder as a US citizen. At that point, it becomes an issue of getting your second passport so you can remain a US citizen while running your business offshore and still following the rules.
If you are doing really complicated stuff, you might want to start asking yourself, “Am I willing to be a citizen of only one country? Am I willing to just be Paraguayan? Panamanian? Georgian?” Be sure you understand the thought process and the consequences of a decision of that magnitude.
Having a second passport is a great Plan B. And most people I talk to just want the Plan B because they want to be protected. For those who eventually want to renounce, however, just keep in mind that the world is changing and it’s getting harder and harder to be a nomad with a second-rate passport.