The wealthy are building “passport portfolios” — collections of second, and even third or fourth, citizenships — in case they need to flee their home country
The wealthy are building “passport portfolios” — collections of second, and even third or fourth, citizenships — in case they need to flee their home country, per CNBC.
Wealthy families in the U.S. are increasingly seeking second citizenships and national residences as a financial safety net, according to a prominent law firm.
These affluent individuals are creating "passport portfolios" — collections of second, and sometimes third or fourth, citizenships — in case they need to leave their home country. Henley & Partners, a law firm specializing in high-net-worth citizenships, noted that Americans now outnumber all other nationalities in acquiring alternative residences or additional citizenships.
"The U.S. remains a great country, with an amazing passport," stated Dominic Volek, group head of private clients at Henley & Partners. "However, as a wealthy individual, I would seek to hedge against volatility and uncertainty. Diversification is well understood in wealth management. It makes sense to diversify one's citizenship and residence when possible."
Recent examples of prominent individuals acquiring second citizenships include billionaire tech investor Peter Thiel, who obtained citizenship in New Zealand, and former Google CEO Eric Schmidt, who applied for citizenship in Cyprus.
While the wealthy are not abandoning their American citizenship en masse, a small number of Americans do renounce their citizenship each year primarily due to tax-filing obligations. However, the "exit tax" required to renounce citizenship is financially prohibitive for most, making it feasible only for the ultra-wealthy.
Instead, many affluent Americans are exploring visa or citizenship programs to complement their U.S. passport.
According to Henley, top destinations for supplementary passports among Americans include Portugal, Malta, Greece, and Italy. Portugal's "Golden Visa" program is particularly popular as it offers residency and citizenship — with visa-free travel in Europe — for an investment of 500,000 euros (approximately $541,000) in a fund or private equity. Malta provides a Golden Visa for a 300,000 euro investment in real estate, which Volek noted has become "especially popular with Americans."
"With Malta, you gain European citizenship, allowing complete settlement rights across Europe," he explained. "You can live in Germany, your children can study in France, and you have the right to live, work, and study throughout Europe."
Several factors contribute to the increase in American passport portfolios, or "domicile diversification." An alternative passport facilitates travel for Americans visiting regions less welcoming to the U.S.
"Supplementary passports offer essential flexibility for Americans, Britons, and Israelis uncertain about their reception abroad," as per a Henley report. "Amid rising global instability, holding citizenship in another country, particularly one considered more neutral or politically benign, provides a valuable backup or alternative option."
Another reason is business travel, which can be safer and less conspicuous with a non-U.S. passport in many countries. U.S. business leaders could be targets for "resentment, hostage-taking, or random terrorism in the chaos of collapsed states or high-risk countries they need to travel to for business purposes," according to the report.
Additionally, a secondary passport can facilitate cross-border financial transactions or business deals within the new country.
Lastly, some affluent Americans seek a backup residency for potential retirement, to be closer to family living abroad, or for lifestyle reasons in the era of remote work. For others, U.S. politics is a motivating factor.
"In uncertain times, not just in the U.S. but globally, it's important to have not only a Plan B but also Plans C and D," Volek emphasized.