Five Citizenships to AVOID Like the Plague

my general advice has been if you're able to get a second citizenship you should get it but there are a few kinds of countries where you wouldn't want to get second citizenship from or at least you'd want to give it a second thought [Music] one of the things that we do here at Nomad capitalist is help people analyze if I'm getting a second citizenship what does that mean for my taxes what does that mean for my obligations as a citizen what does that mean for my Global Mobility my freedom my wealth because these things don't exist in a vacuum and there are five types of citizenships five things that countries do that might make you reconsider whether you want that citizenship the first thing is that a country prohibits you from giving up to citizenship one of the things that we've talked about in recent years especially is how countries are putting more obligations without more benefits on their citizens basically treating you as Doug Casey would say like a dairy cow you're there to be milked but they're not giving you anything extra in return and so if countries can change the rules at any time they can raise taxes at any time even after you've already had a deal with them what's to say that they can't say hey you know what we're not going to let you leave Argentina has long had this policy for some people to benefit you cannot be stripped of your citizenship it is deemed a human right in Argentina however if Argentina would decide hey we're going to tax all of our citizens no matter where they live because it's not fair that in this time of economic upheaval we've been having for like you know a few decades that people should be able to leave the country and not pay us well how's that going to work you cannot give up a citizenship that has just put a brand new obligation on you now you could say that people just won't comply with that what's Argentina going to do about that but I would imagine that would cause some stress and so if you wanted to become a citizen of Argentina which if you go and live in Argentina for a couple years isn't that difficult you should understand that you are in some way wedded to all their policies the United States in some sense they certainly allow renunciation there's been record numbers I just saw recent numbers come out that more people renounced in the first three quarters of last year than in the entire year before they effectively during the pandemic said oh embassies are closed sorry you can't renounce there were a few that were open and it has largely gotten back to normal but the standard is now set not just by the United States but by many countries around the world whatever reason quote unquote they can come up with to stop you from exercising your rights they'll use it now people who wanted to renounce U.S citizenship and then found themselves a year later when they were finally able to do so but had let's say a bigger tax bill to pay on the way out so they get to go and say hey I wanted to renounce a year ago but you wouldn't let me no whatever pandemic right what what do bureaucrats say whether they work in a corporation or work for the government just following the s p those are the rules that's how it works take it or leave it that's how it goes and so that was a de facto way of saying you can't give up your citizenship and I think people should look closely at what countries have made it difficult to do that there are other countries like France for example where at times it can be difficult to give up your citizenship it could just take a long time not necessarily an issue because they don't tax you if you don't live there but something to consider the second kind of issue you would look at when getting a second citizenship is citizenship-based taxation so that's what we're talking about the United States has it so if you're an American no matter where you live in the world you've got to file a tax return if you're otherwise required to you've got to report your form bank accounts you've got to report your foreign corporations it doesn't matter if you don't spend a single day in the United States you are what's called a U.S person and so therefore you're in you're in the tax not the same way and anybody who was born in the U.S and lives there their entire life is now as I always say that does not mean you can't dramatically reduce the taxes you pay in some cases you can even eliminate them by moving overseas Americans who run businesses in Dubai or in Singapore or in Panama or in any number of other places can still dramatically reduce the taxes they pay and it is better for entrepreneurs than it is for let's say employees or even investors however only getting rid of your U.S citizenship means you're no longer liable for U.S taxes and sometimes even worse U.S reporting requirements where you've got to report all your foreign corporations foreign accounts what have you and so that's what I mentioned if Argentina would have rolled that out for example just a hypothetical that would be something where that would make that citizenship far less interesting because now you have to pay tax even if you don't live in Argentina and you can't give it up again the bigger issue to me is the de facto inability to renounce and having the citizenship-based taxation China and South Africa have made some moves to go towards their own version of citizenship-based Taxation you've had plenty of countries in the past that have had it everyone from Mexico and Romania to Vietnam the Philippines they've all gotten rid of it Hungary has it for certain types of people but you can avoid being in that net so if you qualify for a Hungarian citizenship by dissent not really as much of an issue as if you're just born in Hungary the third thing to look out for would be mandatory military service now there are some misconceptions around this there are countries where you can legally pay a fine to not serve there are some countries where religious exemptions or spiritual exemptions you can not serve in some cases you don't have to go to the front lines you just go around I had a guy who worked here and and he served in the in the Austrian Army and they would March around vegan if you go to Vienna sometimes you say they're they're just out there uh guarding things in many cases it's boys I think that like Norway and Sweden and Israel it is um you know both both men and women have to serve but in many cases let's say you're getting citizenship uh and you've got you know daughters that may not be an issue there's other cases where conscription is from a certain age let's say 18 to 26 and if you're not there uh they don't you know put you into the system there's some cases where dual citizenship can help those are relatively rare um so there's a number of ways to potentially avoid that um but mandatory military service is one thing to look at for some people it's hey uh I just don't believe in that I don't want to be a citizen of a country that does that but if you're looking at more practical consideration of do you need to go in uh generally speaking like a country like turkey where they have a citizenship by investment program does not want its investor citizens to to go in now in some of those cases even if you're exempt your children who just got it passed on from you they may not be exempt so you want to look at those implications and in some cases you may say hey I'm going to get a second citizenship for me that helps me diversify my passport portfolio but I'm not going to apply on behalf of my children for example because of an issue like this and so potentially you could get a citizenship now and your children could get it at some point the future once that conscription requirement goes away but there are some European citizenships you can get by dissent that you might want to get after a certain age because of this issue the fourth thing you would want to look at when applying or when looking at second citizenships is any kind of sanctions or any kind of reputational issues so you know Iran Syria there's any North Koreans watching you know those are a problem you know we've had a few people we've worked with who were Cuban Americans you don't want to go claim your Cuban citizenship to think something that's even possible Russia now obviously is you know largely problematic we're looking at like Lithuania is coming out and saying hey maybe we're going to be more flexible on dual citizenship but only with these countries there's going to be a nice list NATO and the EU and all that this can be a naughty list the cas countries in Eastern Europe and in Central Asia um you know various countries that have affiliations with Russia they're going to be on a naughty list there are banks that reject all kinds of different people I mean there's some of these offshore banks that if you're from the Balkans if you're from Central Asia if you're from the Caucasus if you're from you know Africa if you're from uh you know South America if you're from almost anywhere if you're from the US we don't want you I mean we're not talking about that um but certainly you know somebody who you know is a Kazakhstan citizenship I mean you might be asked some questions in uh limited circumstances but you know the bigger ones are going to be the countries that just kind of have Pariah status you don't want to do that and I told you I knew uh knew a woman who had lived in Malaysia married a guy who was an Iranian guy they moved back to Iran and she was able to immediately uh get Iranian citizenship and did and I think that uh is not the smartest thing now if you're Russian Iranian I guess you just you're living in a certain part of the world at this point um but I I generally wouldn't wouldn't do that uh you're seeing you know the Caribbean citizenship countries now are going to be restricted to not accepting Russians belarusians and basically all have gone back on accepting Iranians and so if you you know if you can claim some country that you know could be looked at um in unfavorable terms by a bank or a future citizenship or a future residence then you might want to think twice about doing that that's not going to apply to most of them and I doubt most people here qualify for Iranian citizenship the last thing to look at is how will impact a job or security clearance we've had folks who've had security clearances who they just don't get dual citizenship and in some cases they just avoid certain residence permits or permanent residence permits as well so you know if you work for a certain government obviously you don't want to go out and get a citizenship from a country that's anything other than favorable um and so you know we've seen people who were you know they were dual U.S Canadian and sometimes that was okay but certainly you've got a lot less flexibility when you are in those spaces and sometimes you can't have dual citizenship at all so is as much as that sounds like oh there's a lot of issues potentially there if you look at any kind of citizenship or residence by investment Caribbean citizenships for example they're not going to tax you no matter where you live if you want to give it up great what do we care um there's no you know military service it's not much of a military in some of these countries and so you know those are designed for folks who want their freedom and flexibility now I believe that having you know triple citizenship is going to be the ultimate way to have freedom even building a bigger passport portfolio for the average person having triple citizenship is a way to ensure your freedom uh so you're going to be looking at some other countries even if you're outside of let's say the Caribbean even if you're outside of you know a place where you can get a residence in a small country you want to look at what is what is the future you know all these countries can attacks me I don't think that most countries are going to try and tax you just by not living there I mean take a country like uh many countries in Eastern Europe for example or Ireland or uh even parts of South America where there's kind of a history of emigration I don't think it's going to go down a well to say if you don't leave the country you're going to still pay tax it works in a country of the U.S where most people don't leave people think it's the best country on Earth why would you go anywhere else and so it kind of works politically speaking so you have to kind of read those tea leaves um do I think more countries are going to prohibit renunciation in a de facto way occasionally such as the U.S did during covet but generally speaking I don't think there's a big issue military service again probably one of the bigger issues to look at and obviously just be smart about not getting random uh you know passports sometimes it's the the juice is not worth the squeeze as they say we had someone who qualified for Vietnamese citizenship by descent and it was just like is that really going to solve any of my problems maybe it could if you want to live in Asia you've got Visa free travel throughout our asean region but in this situation it's like I don't really want that maybe some people are going to think Vietnam is weird even though it's in my blood I just don't want to bother with it I'd rather go out and pay for a passport from a country that people will understand a bit more that doesn't maybe carry any you know weird baggage I mean people are still uh people still look at the Vietnam War in the United States and think that like you know that's something so those are things that I would avoid uh but I don't think most countries are going to fall into those categories I think most countries are going to be fine in most of the countries that'll offer you dual citizenship will be fine just make sure you have a holistic view on what having every given citizenship brings with it [Music]

Channel: Nomad Capitalist

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Keywords: nomad capitalist, go where you're treated best, second citizenship, dual citizenship, second passport, moving to another country, andrew henderson, life abroad, where to live, Five Citizenships to AVOID Like the Plague, personal finance, where to move, investing, how to invest, Worst citizenship, worst citizenship, citizenship, immigration, us citizenship, renounce us citizenship, immigration news, taxes, passport, passports, travel around the world, best places to live, CBI

Id: EUjRFJBH0GM

Length: 12min 26sec (746 seconds)

Published: Tue Jun 13 2023