By Andrew Henderson
If all goes well, there will soon be more ways to get your second passport. And with everything going on from Cyprus to the fresh North Korea spat, you may need a second citizenship more than ever before.
The island of Grenada, not far north off the coast of South America, has announced its intention to resume the citizenship by investment program it suspended shortly after 9/11. (Wouldn’t want a guy from Saudi Arabia to get a passport.)
While the Parliament has to vote the program in, the party membership would appear to indicate it will become a reality.
Antigua has also been tinkering with its proposed second citizenship program in the last few months. There has been some political infighting over it, but the debate has rolled along and prospects don’t look too bad.
In addition to St. Kitts and Nevis and Dominica, the two nations who currently offer their own programs, both new nations are members of the economically challenged Eastern Caribbean region. All four nations have had recent issues with debt.
Grenada, for example, has an economy smaller than Mark Zuckerberg’s estimated tax bill this year. It was given a reprieve on some debt payments after it was hit by hurricanes last decade. They need the money, and unlike bankrupt nations up north, they don’t have much ability to fire up the printing press on their shared Eastern Caribbean dollar.
Opportunities for foreign investment are slim based on the region’s track record. Antigua is in a similar position. This makes countries like this attractive in my opinion. It’s nice to be courted for a change; to feel like your presence in a place matters.
While the United States and Europe treat their citizens like milk cows not fit to leave the farm, countries offering these second passport programs know where their bread is buttered. They lost that butter – and it has stung – after last decade’s terrorist attacks and the US government’s demand for such programs to be shut down.
Poorly as they treat them, big governments can’t afford their most productive people escaping their clutches.
While Grenada is in need of cash, they are going about raising it by adding value. I don’t foresee the risks Americans face, for instance, being an issue there, where the whole economy is 1/15th the IRS’s annual budget.
Grenada or Antigua or St. Kitts or Dominica aren’t pursuing their citizens to the ends of the earth over a foreign bank account. St. Kitts has no income tax at all; the other three use a residential method of taxation where you pay on worldwide income if you live there but pay nothing if you don’t.
This in contrast to the United States, which taxes your income forever, no matter where you live, no matter where the income was earned, until you give said citizenship up.
With in-your-face capital controls in Cyprus and the US government’s continued fiddling, now is an important time to take stock in your economic freedom. Having a second citizenship – and second passport to go with it – is a key diversification tool so that no one government can control your life.
As a free person, you should always maintain your freedom to leave your home country. If you’re an American, you will need a second citizenship to do that if you ever plan to end your subjugation to whatever tax or regulation that government will impose next.
It’s important to note that the “planting flags” theory comes into play here. I’m not suggesting that you pack up all your things and move to Grenada. I’m sure you can think of worse places to live, but consider their passport as an arrow in your quiver. Use it to establish an escape hatch for when you can no longer tolerate the oppression at home. That way, you’ll always have somewhere to go.
As a citizen of Grenada, you could establish residence in any of the freedom-loving locales we talk about here. With a minimal investment, you could start a business in Chile or Singapore or Panama or Latvia. Heck, even the United Kingdom (kind of defeats the point, though).
Singapore and Panama, for instance, also tax on a territorial basis, so you could structure an international or trading business and pay little or no tax as a Grenada citizen living in one of those places. If you’re a person of means, Hong Kong, Ireland, and a list of other places will welcome you with a bank deposit.
You could buy real estate in Spain, Portugal, Ireland, or the Philippines and get residency. If you’re an American, even Ireland – with relatively high personal income tax rates – offers a freedom you’re not accustomed to: you can always leave and stop owing them.
Similarly, I wouldn’t be too hot on banking in Grenada or Antigua. I believe there are some decent banks in the Eastern Caribbean community, but there are better places to bank in the world. Probably best to keep your money elsewhere. That’s what planting flags is all about; finding the best places in each category to be a citizen, live, bank, own a business, and have fun in.
Grenada’s last second citizenship program was a steal at roughly $40,000. The St. Kitts program has a donation option that costs $250,000 and may be going up. (You have all the new wealthy Chinese to thank for that) Antigua is talking about modeling its program after the one in St. Kitts.
Even Dominica’s program runs $100,000 that you’ll never get back. Demand for these passport programs is going up thanks to the new rich in the developing world, and thanks to dwindling freedoms in the developed world. Prices will only go up.
It will be interesting to see how Grenada structures their program. I’ll make sure to keep you updated.