Chapter 4

Citizenship Without Residence

Second Passport

The process of qualifying for citizenship in the countries in the big league [full details in Chapter 7] has a significant disadvantage: the condition that, to achieve citizenship, you must live in the country as a permanent resident for up to five years. Of course if your major goal is to move to one of those countries permanently anyway, there is no harm in that condition, and citizenship is a secondary benefit of achieving your primary objective.

As mentioned earlier however, the residence requirement may be a price you are unable or unwilling to pay if your primary objective is to obtain a second nationality.

Moreover, while you or your family may be able to mobilise $US100,000, if you do not have the experience necessary to use it wisely in running a business, you may be ill-advised to adopt such a plan.

Moving to another country and another culture can be a severe emotional and economic wrench — culture shock. Unless you already have friends or relatives in the new country, you are leaving all your roots behind: all the friends and connections you have built up over the years — and, perhaps, your family as well. The older you are, the more difficult and traumatic such a move can be.

Unless you have easily-transferable skills, the income, prestige and status you have built up at home may be lost. You could find yourself starting at the bottom of the social and economic pile in the new, and possibly very strange, country.

These are all very important questions that you should consider seriously before embarking on any move.

Two particular points about moving to the US are:

  • There is a some times-overlooked complication for people who apply for permanent residency in the US. Once your application for permanent residence in the US has been approved (which puts you on a waiting list and does not necessarily get you in right away), you enter a legal limbo. While you are on the waiting list, and before the approval takes effect by your getting to the top of the list and getting the final green light in the form of your green card, you are nevertheless treated as if you were a permanent resident. Now this status disqualifies you from getting a tourist or business visa in the meantime.This means that between the expiry of your current tourist (B 1 or B2) visa and the issue of your green card you will be unable to visit the US. Of course, if you have a good lawyer, he may help you argue that there are reasons why this rule should be waived in your particular case.
  • Once you have your green card (permission to reside in the US) you are subject to US taxes on your world-wide income and capital gains, whether or not you reside in the US. If your objective is simply the obtaining of a second nationality, I believe acceptance of the imposition of US taxes for the rest of your life is too steep a price.

Some cheaper Choices.

The purpose of this Special Report is to show how you can obtain a second nationality at relatively low cost, whether measured in money or human terms.

The countries we have briefly surveyed so far offer citizenship only if you immigrate. But there are ways to acquire a second citizenship or travel document that do not require you to disrupt your lifestyle in any significant way.

Illegal means

This is not a recommendation, but there are basically two approaches to obtaining a passport illegally. The first is to pass yourself off as a national of the country concerned: apply for a passport using the birth certificate or baptismal record of a person born at about the same time as you, but known to you to have died. This will only work in a country where birth records and death records are not matched up. Or you could choose as the place of your purported birth somewhere that has lost its records through a fire in the courthouse or other registry. This involves a certain amount of falsification.

Another method also involves falsification, this time of your record of residence. It is easiest to do this in Canada and the US, whose common frontier is the world’s longest unguarded boundary.

To cross that boundary all you need is a driving licence issued by either country. If you drive from, say, Vancouver to Seattle on a busy Sunday afternoon, the chances are you will be waved through the border posts without even a cursory inspection.

BF1

So if you have the right to reside in, say, Canada, you can cross to the US without leaving a record on either side. Those using this technique must of course maintain a Canadian address, in order to be able to be warned if they need to appear before the Canadian immigration authorities, in order to maintain theft Canadian resident status.

Towards the end of the 3-year residence period that Canada requires, they return to Canada by the reverse route, and pretend they have been living in Canada the whole time. If the claim is challenged however, they will be hard put to produce such things as Canadian tax returns, and if they are found out they will have their residency revoked.

Taiwanese non-resident passport.

The cheapest passport available is the Taiwanese non-resident passport. It costs $HK180 ($US23), and can be arranged through Chung Hwa Travel Service, 4th floor, Bond Centre, East Wing, Queensway, Hong Kong.

But you get what you pay for. This passport is of very limited use. First it is only available to persons of Chinese origin claiming Chinese nationality, and no-one else should apply. This effectively restricts its availability to people from mainland China and Hong Kong. Secondly it does not give the holder the right to reside in Taiwan, or even enter Taiwan without a visa. But it can be used for travel elsewhere, with the limited advantages possessed by a Taiwanese passport.

I can only discover two helpful uses for a Taiwanese passport. The first is that a holder can qualify for the US E class (treaty trader) visa and L class (treaty investor) visa for which a Hong Kong passport holder is ineligible.

The second instance is also of limited application, and concerns Malaysian citizens of Chinese descent. Malaysian citizens are not permitted to visit China. If they do so — and China does not stop them — they are liable to be penalised by their own government. One way for the government to find out whether one of its subjects has visited China is to look at his passport and see the visa stamps, or chops, impressed on entry and exit. Chinese Malaysians, if they can produce a Hong Kong identity card, may be able to get a Taiwanese non-resident passport and use it to travel to China. This can be important to businessmen wishing to do business in China, which even the Malaysian government does not seek to prevent. Malaysian citizens of non-Chinese origin are of course precluded from the Taiwanese passport, and should consider the alternatives mentioned elsewhere.

Citizenship without residence

Numerous countries offer different versions of the investment/business type of program for residence and/or citizenship. Some have created programs to attract investment from outside, citizenship being the bait.

As we have seen, most countries are in this market in one way or another, even the supposedly respectable ones like Australia, Canada and the UK. Others, often run as the personal property of dictators, simply offer passports for sale with most of the money destined for the presidential bank account in Switzerland. These do seem to be diminishing, however.

I’ll now outline some other countries’ programs that are either designed to provide citizenship without residence or capable of being applied with much the same effect.

Saint Christopher (St Kilts) and Nevis.

This is an independent country, decolonised by the British in 1983, situated among the Leeward Islands, part of the Lesser Antilles, in the eastern Caribbean. At the outset of independence it established a special class of nonvoting citizenship, for people interested in the country. Of course one way for total strangers to acquire an interest in the country is to invest some money in it, or in a local company, in such a way that the country benefits. Precise details of schemes to put citizenship applications into effect under this heading seem to vary, and likewise the costs. Generally, those schemes which have been mentioned to me have involved total costs, including investment, ranging between $US52,000 and $US200,000. Clearly they should be considered in great detail before one commits oneself, but a definite advantage common to these schemes is that one need not even visit St. Kitts to get the passport, which I am told carries full citizenship rights bar the right to vote. The process is remarkably quick, involving a period of 45 days after you have signed the papers.

Dominican Republic

Not far west of St. Kitts, in the Greater Antilles, sharing an island with the Republic of Haiti, is the Dominican Republic. This is not to be confused with the much smaller island of Dominica, farther on to the south-east in the Lesser Antilles. The Republic has been reported as offering passports for a family head, spouse, and all children under 18, for a total of $US100,000, made up of $US40,000 for the purchase of an apartment, $US10,000 for a government bond, and $US5O,000 in taxes and legal and conveyancing fees.

I am advised that a job-creating business investment may work out much less expensive than the passive kind of investment mentioned above. There are certain business investments that the government has approved in principle in advance, and it would be possible, by adopting one of these, to reduce the amount of time involved in a citizenship application.

Four Valuable Passports Anyone Can Obtain

I should mention however that notwithstanding good growth in tourism, the Dominican Republic’s economy is not in very good shape, and the Dominicans themselves are leaving the place in droves in desperate attempts to find employment elsewhere.

Mention of Haiti reminds me that Haiti itself ran a short-lived scheme just before president Duvalier was thrown out. I do not know whether any passports were issued as a result — but I doubt if they’re of much use now.

Belize

On, but not in, the Caribbean, on the mainland of Central America, next to Guatemala and Mexico, is Belize. Its constitution provides that any purchaser (approved by the Minister of Home Affairs) of a $US25,000 Belize government bond shall have the same rights and responsibilities of citizenship as a person born in Belize. The bond in question is a 10-year bond, paying no interest but backed by a US Treasury bond of the same maturity to provide security for repayment of the principal amount. On approval by the Minister of Home Affairs and after payment of the purchase price of the bond, plus an additional fee, the investor and his immediate family included in the application get their new passports, in a matter of weeks, without having to go to Belize. The additional fee seems to vary, depending on the organisation through whom you are dealing, but could be in the range of $US12,000 to $U515,000.

Bolivia

Three weeks was an estimate given by one of my US correspondents as the time it takes to get Bolivian passports, at a cost of $US20,000 for the applicant, an extra $US10,000 for his wife (if she wants her own separate passport — on a joint passport she pays nothing extra), with similar arrangements for children under 18. Thrown in, the applicant gets two shares in the Andean Development (par value $US4,000) and an official letter from the Bolivian Ministry of Interior and Justice, welcoming him as a new citizen of Bolivia.

Brazil

Brazil does not strictly belong in this list, because ostensibly it requires residence to qualify, along with a fairly substantial investment. I will deal with the ostensible position in another chapter, but I include it in this list because it could be one of those areas where considerable flexibility is exercisable, and readers may wish to make inquiries of specialist consultants. If so, please write to me.

Argentina

From Buenos Aires not long ago came the news, given to me by a correspondent there, that a deal was being fixed up whereby an applicant for an Argentine passport would transfer to the Argentine National Migration Department the sum of $US50,000 to be held on deposit for 60 days, in exchange for permanent residency in Argentina, a national identity document, a police identity card, an Argentine Special Passport for Foreigners, and the promise of a refund of the $US50,000 (plus interest at 7.5% per annum) by the National Bank in Buenos Aires after the expiry of the 60 days. The passport was to be valid for one year, renewable once for one year if the holder remained out of Argentina, but otherwise (by implication) renewable further. Whether that scheme was ever implemented I cannot say, but it could be worth trying to find out whether it or some similar scheme now exists.

St Maarten

Well known as an international tax haven that until recently, through
advantageous tax treaties with the US, enjoyed great growth in its financial services sector, is the group of islands known as the Netherlands Antilles.

St Maarten is actually half an island. The other half is French, and called St Martin.

The Dutch half offers incentives to foreigners setting up export-oriented businesses and both the US, under its Caribbean Basin Recovery Act, and the European Economic Community, of which the Netherlands Antilles are associate members, give preferential entry to the islands’ goods.

St Maarten is also a popular vacation resort, with beaches, water sports, casinos, restaurants, hotels, banks and tax-free shopping.

How Dual Citizenship Can Save Your Life

To qualify for residence in this tax paradise, an investment in the region of $US100,000 is required. Part of this money goes to buy a bond that will repay the full $US100,000 at the end of ten years. The rest of the money goes into a fund established for the economic betterment of the island. If the fund does better than the bond, the investor may choose to hold his investment in the fund instead of receiving repayment of the bond, and end up actually making a profit.

St Maarten’s European connection through the Netherlands (Holland), of which it is a politically autonomous part, offers the potential of ultimately qualifying for a Dutch passport via residence in St Maarten.

Mauritius

Although it did not officially advertise the fact, Mauritius, an island in the Indian Ocean, twelve hundred miles or so off the east coast of Africa, included the possibility of a passport among the privileges offered to investors, in a scheme to boost manufacturing investment in an economy traditionally dependent largely on sugar.

The official line now (since end-November 1987) is that the passport offer is withdrawn. However, Mauritius has not abandoned its search for investors, but switched the emphasis, and is now hoping to develop its electronics sector. In fact, only ten days after the end-November official announcement of the withdrawal of the not officially advertised passport offer, a trade delegation from Mauritius was in Hong Kong to encourage Hong Kong industrialists to invest in the country. The incentives mentioned included Mauritius’ associate membership of the European Economic Community, which entitles it to duty-free and quota-free trade with Community countries; a trade agreement with the US which entitles it to similar treatment for non-textile products; and low labor costs.

So it could still be worth a trip to investigate. It is an extremely pleasant place to visit in any case, and a favorite staging post among well-heeled Australians on their annual migration to and from Europe.

Chapter 5