- Uncertain Future
- Alternative Citizenship – a Real “Plan B”?
- Effective Backup Plan
- Rule #1 – Your Case is Unique
- Rule #2 – Probable Costs in Connection with Potential Risks
- Rule #3 – Postponing Choosing the Property till the Very Last Moment
- Rule #4 – Being Extra Careful When Choosing an Intermediary
- Effective “Plan B” – Myth or Reality?
To the great distress of many wealthy families throughout history, preparation for adverse events is too often overlooked or kept low on the list of priorities. For many families who could have avoided various important risks, this fundamental strategic failure became the cause of unmeasurable grief and losses several times during the 20th century alone. As a result, thousands of people were decimated by pogroms, various armed conflicts, including the two World Wars, a dozen coups or revolutions, expulsions and genocides.
Creating a reasonable and reliable Plan B for you and your family means insuring yourself from possible unpredictable and uncontrollable external risks. When planning a serious business deal, you probably have a contingency plan in place just in case something goes wrong. When you buy a car or a new house, getting it insured is almost mandatory. When you’re applying for a new job or discussing your current employer’s offer for a raise, you’re likely to ask about the health insurance coverage. For all developed countries, it’s standard practice to think over a plan of action in case of any force majeure circumstances, even if the probability of their occurrence is rather low.
But for unknown reasons, few people used to think that problems might arise not in their private life or business, but in the jurisdiction where they live, even if those jurisdictions are countries with powerful, developed economies. Recent times have shown us that some unexpected turns of events have the force to seriously tip our lives, business activities, and even the affairs and well-being of whole countries seriously out of balance, making the traditional insurance measures listed above insolvent and ineffective.
Examples of destabilizing events that no one can predict:
- Natural disasters;
- A wave of bankruptcies, as a result of which your financial situation will critically worsen;
- Foreign policy factors – military conflicts, coups, economic expansion of another state, etc.;
- Increased risk of conflicts involving the use of nuclear weapons;
- Terrorist who may use WMD (weapons of mass destruction);
- Significant changes in your own country’s foreign policy;
- A significant increase in energy prices, which will lead to a sharp rise in the cost of utilities.
All these factors can manifest themselves in almost any country, although in developing countries the situation is certainly significantly worse. In many of them, there are various additional threats:
- Growing corruption;
- Change of political regime;
- Migration of existing power towards despotism or totalitarianism;
- Military attack from a neighboring country;
- A sharp deterioration in the economic situation (e.g., denomination);
- Uncontrolled inflationary processes.
A recent example of the powerful disastrous circumstances is the COVID-19 pandemic that swept the world in 2019-2021. At that point, many really wealthy people wanted to leave their countries, but the borders were quickly closed for immigrants and emigrants, allowing only the citizens of the countries to pass through. Given that the health care system of most European countries was unable to cope with the virus attacks, for some time the Europeans’ quality of life dropped dramatically. In some countries the situation isn’t really back to the “pre-COVID normal” yet, and there are signals about the new wave of the virus attack rising rapidly.
How should you act in the situation when your usual life routines are changing (worsening) dramatically? Especially if the situation is urgent, leaving practically no time to contemplate really important decisions? If you have not taken care of working out a contingency plan “B” and applied for an alternative citizenship, then the only remaining option is trying to get a refugee status. You may have time and opportunity to leave the country, but you can forget about prosperity and comfort for a pretty long while. And it is very likely that you will have to sacrifice most of your assets and leave behind the business and home, in which you had invested all your resources.
The crises that would threaten you and your family may be completely unexpected and created by none of the factors mentioned above. However, they are all united by two factors.
The first factor is unpredictability. It is impossible to accurately predict the time they hit and the degree of their impact on your lives. An approximate, superficial calculation will not have any practical value in your efforts to rectify the damage.
The second factor is the uncontrolled increase in the number of future threats. Take for example India and Pakistan, Israel and Iran – these countries are hardly friendly to each other, and each supposedly has nuclear weapons. There are plenty of hotbeds of conflict in prosperous Europe (Serbia/Kosovo, Transnistria). Not to mention the recent tragedy in Ukraine. The world is facing an increasing number of threats, for which it is completely unprepared.
Global threats that cannot be calculated or prevented include the following:
- The increasing greater divide between emerging and developed markets;
- Displacement of the conditional “center of gravity” of civilization: growing realignment in economic balance and trajectory between east and west;
- Erosion of the global middle class;
- General growth of social instability.
How to deal with these threats, no one knows. But the fact that they will have to be answered somehow is already clear. Western civilization is still extremely strong, and it is able to defend itself. But this does not apply to individuals. If the situation in your home country worsens significantly, you will most likely have to look for ways to save yourself. And the sooner you realize this and begin to act, the better.
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Alternative Citizenship – a Real “Plan B”?
A backup plan based on obtaining a second citizenship requires some preparations to be made in advance. If the situation in a given country has started deteriorating (which often happens incredibly quickly), some parts of this process may become very difficult or downright impossible. And no amount of money would be able to help.
There are plenty of examples of this throughout recent history. Only some wealthy Jewish families in Europe before the events that are usually united under the term “Holocaust” managed to quickly leave Germany and the occupied countries. Those who remained after the rise of the Nazis to power were practically doomed – even those who left their homes later became prisoners within their countries, and millions of them sooner or later lost their possessions and their lives. If they had second passports, they would probably have had a chance to escape, albeit not a certain one.
Other Examples of Situations in Which Obtaining Alternative Citizenship in Advance Could Save Lives:
- The conflict in Yugoslavia in the late 1990s;
- The Gulf War of 1990-1991;
- A series of local conflicts that broke out after the collapse of the USSR;
- Events of the Arab Spring (early 2010s);
- The aggravation of the situation in Ukraine (February 2022 – present).
In all these cases, the presence of a well-prepared alternative option would definitely shift the situation from survival to securing well-being, and most likely would provide many families with a comfortable standard of living. All they would have to do is get to the airport and board the plane. But when people start preparing for moving out of the country AFTER the situation worsens, they often simply don’t have enough time for all the administrative procedures and requirements. The backup plan is good only if it is prepared in advance, as a reserve scenario.
Let us give you a typical real-life example of how competent planning can allow you to save not only life and freedom, but also a big part of your assets for maintaining a good living standard. One of our clients, let’s call him Ayman, was a citizen of Kuwait, but used to live in the US and the UK quite often and for long period of time. Luckily, like many wealthy Gulf Nationals, Ayman and his loved ones were outside of the searing hot Arabian Gulf when Saddam Hussain invaded Kuwait. However, unexpected external circumstances created a really serious financial problem for him. In order to prevent wealthy Kuwaitis from being blackmailed over their family members who had been captured during the invasion, the US and the UK governments froze Kuwaiti assets in their countries. As a result, Ayman found himself in dire financial straits because his family and personnel (nannies, maids, security people etc.) were occupying almost an entire floor of a luxury London hotel… while his credit card was not working, and he had no access to his private bank accounts.
Luckily, Ayman, who had a good understanding of the fragility and instability of the political situation in the region, had taken some necessary precautions in advance with our help. A few years prior to the invasion, Ayman invested in alternative Canadian citizenship and purchased several properties in Montreal (in reality, the houses did not exist, because their construction was only being planned). The investments in the amount of about USD 5 million were made through a special trust fund and were tied to the construction schedule.
Since the Kuwaiti assets in Canada were not frozen, Ayman was able to cancel the deals, losing approximately of the 10% deposit. We transferred these funds in parts to the accounts of Ayman and his family members, which allowed them to maintain their regular way of life, despite the fact that the main assets were blocked.
After the dust had settled on the Gulf War, Ayman asked us to expand the contingency plan to minimize material losses. We recommended that Ayman prepare several backup jurisdictions with a package of basic features (decent real estate, residence permits for Ayman and his family members, reserve bank accounts, minimum taxes). Key to the planning was the requirement that maintaining these alternative residences would not subject him to worldwide taxation or excessive physical presence requirements.
The scenario described above presupposes a fairly high level of initial costs, but this does not mean that alternative citizenship is inaccessible to most people with more moderate incomes. If you approach the matter wisely and carefully, make all the proper calculations, and take into account the intricacies of legal requirements, costs can be drastically reduced, while still making almost all the options available. Once again, it is critically important to do all this in advance, when you have enough room to maneuver. And it is most advisable for people who do not have a lot of information about or experience with foreign alternative residence programs to turn to professional experts for advice and help. The seasoned experts of our portal will be happy to help you get the most advantages of your individual circumstances and suggest the best way to create your own Plan B. Contact us today at firstname.lastname@example.org.
Effective Backup Plan
Please note that “effective” (performing all the tasks set) is not the same as “done for effect” (attractive, impressive, but doubtful in terms of feasibility and practical usefulness). If you are interested in creating a truly effective backup plan, you should take the stage of preliminary analysis with all possible seriousness and responsibility.
The most important things to consider:
- The experience and professionalism of your intermediary is critical. It is virtually impossible to implement a project on alternative citizenship on your own;
- In the basic scenario, you will not be required to make significant financial investments, but the total budget cannot be too low. This leads to inevitable compromises, which automatically reduces reliability and security. When in doubt, you should go for a costlier, but wider and more secure option;
- A well-implemented project of alternative citizenship will not only protect you against risks. It can be used for the general benefit of your business, for diversifying assets and investment. It also allows a family to immediately take full advantage of business, education, and lifestyle opportunities in a globalized world;
- Remember that not only your future, but also the future of your children, grandchildren and great-grandchildren will depend on the consequences of your choice;
- Don’t try to cut costs on things that reduce the quality of a project without providing some adequate compensation. Alternative citizenship is an extremely effective tool, but only if a sufficient budget is allocated for its implementation.
If you want to read more about Residence Permit programmed in various countries, here are some articles on International Wealth portal:
- Portugal Residence Permit: Benefits and Features
- Acquire Legal Residence in Portugal by Investment: a Complete Guide
- Acquiring a ‘Golden Visa’ to Italy: a Complete Guide
- Legal Residence in Greece for Financially Independent Individuals
- Georgian Residence Permits
- Residence Permit in Turkey (İkamet) – New Rules in 2022
- Serbian Residence Permits and Tax Residency By Real Estate Investment
- Residence Permits in Serbia in 2022 Leading to Citizenship in the Future
With so much at stake and the “cost of failure” being so high, it is essential to get it right. So, let’s look at the “Four Rules of Success” for an effective backup plan.
Rule #1 ‒ Your Case is Unique
Typical apartment blocks or rooms in chain hotels are not original, but they perform their functions. Standardization does not always have to be a negative factor. However, with alternative citizenship, your projects should be targeted, individually tailored and customized for your specific situation, needs, and expectations. This is the only way to take into account all the requirements of the situation and the customer, while staying within the existing budget.
Typical factors that are unique to each case:
- Type and level of urgency;
- Concern about potential threats;
- Social and marital status;
- Family history for both lineage citizenship claims and family ethos;
- Number, age, and marital status of family members;
- Liquid assets to devote to a Backup Plan;
- Annual after-tax income necessary to maintain life style
- Capital gains (amount and location);
- Real annual income (type and source);
- Business succession and estate planning;
- Having your own business and the level of its “binding” to a particular jurisdiction
- Potential divorce issues for all adult family members.
Rule #2 ‒ Probable Costs in Connection with Potential Risks
If your income is limited to a salary, then the cost of a complex project involving financial trusts or multiple citizenships will be disproportionately high. The opposite is also true. If you can provide a decent standard of living for yourself and your family without using the main capital (but only interest from it, for example), a simple alternative citizenship project (a residence permit in an “inexpensive” jurisdiction and a simple apartment) will have no value for you.
The formal rule is that the “cost of acquisition” (measured in terms of both money, upfront and on-going, and physical presence), must be lower than the “cost of failure@ (the financial and personal cost to your family’s well-being and wealth of a single negative event or a combination of simultaneous negative events). This means that the cost of implementing an alternative citizenship project should be significantly lower than the assets you are risking. But it is important to understand that life and personal safety cannot be calculated in numbers or measured with money, therefore, the assessment of the costs should be approached comprehensively.
The most difficult case is the lack of a real opportunity to estimate the risks and costs, which is not a rare thing to happen. If a potential client has a limited budget allocated for the matters connected with alternative citizenship, he still can and should receive assistance. But with our client we always try to carefully estimate (at least approximately) the balance between our client’s desires and the financial means they have to put them into practice. Some options may have to be sacrificed, but all these things must be clarified before the contract is signed.
Rule #3 – Postponing Choosing the Property till the Very Last Moment
If obtaining alternative citizenship is based on investment in real estate (this option is most often offered and chosen), we strongly recommend you to work through the other issues, and only then move on to choosing the actual real estate to buy. It would seem that buying a house or apartment is the most expensive stage in the plan, therefore, at first glance, you should start with it. But actually, that would be a mistake. Too often our clients buy real estate products for a particular citizenship by investment or residence by investment program, but afterwards, when they try to design their backup plan around this chosen property, they discover that the jurisdiction of the purchased property is either not the best choice or even a useful choice considering the factors that are outlined in Rule1.
This is why the proper sequence of decision-making is as follows:
- Review all the issues noted in Rule#1;
- Have professional advisors work together to design a backup plan which adheres to Rule #2; and
- Select and secure property(ies) and residence/citizenship status in the appropriate jurisdiction(s) as part of the execution of the backup plan.
Imagine the following situation: you have chosen an excellent apartment for your next place of residence, you have completed a transaction through a bank, and you are ready to move. But then it turns out that the jurisdictions where you plan to move do not provide nominal service – and in business this requirement is often the main one! Or maybe in the country, where you bought the property without analyzing all the peculiarities of legislation (since you immediately went to step 3), personal taxes are too high. Or another possibility: all kinds of trust structures are actually prohibited there. Or the area of business in which your company operates requires licensing, and permissions are not given to foreigners.
We hope these examples are sufficient. It is possible to study the real estate market in advance, decide on an approximate price range, and make a mental note on what you can expect to buy when you get to that point. But it is better to make a deal only when all the other issues are carefully worked out. In other words, you will not start a business dinner in a restaurant with dessert – most likely, you will first order an aperitif and salads. With the choice of real estate, the situation is exactly the same.
Rule #4 – Being Extra Careful When Choosing an Intermediary
Strictly speaking, this rule is the most important one. But many people who know very little about the matters of alternative citizenship, golden passports, golden visas and investment programs for the wealthy, believe that they are quite capable of creating their backup plan and implementing all the necessary steps on their own. They are convinced that there is no point in spending money on an intermediary – after all, all the requirements are described and listed on the official websites of jurisdictions that offer alternative citizenship programs.
This line of thinking is a huge mistake. If you read some Internet advice on how to treat a headache, this does not mean that you automatically become a general practitioner. If you are good at playing a video game at home, you are still unlikely to be able to successfully perform in an eSports competition. With the matters of alternative citizenship, the situation is similar: if you are seriously interested in this topic, you should definitely include the costs of obtaining the services of a well-qualified intermediary.
However, an attempt to get a golden passport or a golden visa on your own is not the biggest mistake. Things can actually get much worse if you made a bad choice of an intermediary! This matter is so serious that it deserves a special discussion. A good specialist in alternative citizenship programs is quite hard to find. And although it is considered bad form in serious business to praise ourselves, we still have to say that our experts really earn their fees with their high expertise in legal and financial matters and the impeccable quality of their advice based on many years of experience in this field. When choosing an expert, please remember that the bitterness of poor advice lasts long after the sweetness of a low price is forgotten.
When trying to get assistance, please consider the following signs of a bona fide intermediary:
- Higher priority is placed on maximizing customer satisfaction than on selling a product or service;
- Customer support is provided at all stages of project implementation, including the planning stage and the point after completion of the transaction (the service is rendered in full);
- Searching for a number of alternatives, even if the client does not directly request that;
- Working exclusively in the legal field, without the use of gray and dubious schemes;
- Maximum possible distancing from typical, standard products and services;
- Constant monitoring of all changes in immigration legislation;
- Comprehensive advice on any related issues – opening bank accounts, protection and diversification of assets, tax, financial, family law, etc.;
- Adequate pricing policy.
Some examples of International Wealth Portal Services on Citizenship by Investment Programmes and some recommended jurisdictions:
- European Golden Visas: Choose the Best Option
- St. Kitts and Nevis
- Saint Lucia
- Turkiye – Real Estate Investments wit the Right for Citizenship
Contact us today via e-mail email@example.com for an individual consultation!
Effective “Plan B” – Myth or Reality?
Is it possible to completely insure yourself against most of the threats inherent in the current geopolitical situation? The answer to this question depends on what you personally hold as a measure of absolute protection. If by this you mean a 100% guarantee that any potential threats will be covered, then we have to disappoint you – this is impossible.
But if we look for practical options with reasonable and sufficient protection, the situation will be much better. But you must clearly understand that a backup plan based on alternative citizenship is not a whim of a wealthy person, but an urgent need for anyone interested in protecting their assets and loved ones from unpredictable and uncontrollable risks. And it doesn’t really matter what country you live in.
Following are the must-have components of a good Plan B:
- Alternative citizenship on a turnkey basis. It must be fully prepared, and the legal status of your stay in another jurisdiction should be clearly confirmed;
- Place for permanent residence. Ideally, this should be real estate owned by you, or assigned to you on a long-term lease;
- Financial resources covering the needs of you and your family for the initial stage after your relocation should be readily available. It is best if your money is on a personal bank account opened in a jurisdiction other than the country of your current residence. You should definitely consider alternative sources of financing, such as rent payments, royalties, etc.;
- A package of additional services. Here everything depends on your preferences and requirements. Most often, people require the following features when they move to another country according to their “Plan B”: access to medical services, various insurance policies, and education for children.
Is it possible to secure all these elements on a relatively modest budget? We believe that this can be quite a realistic goal. It is impossible to completely avoid spending money, but you should understand that the backup plan us designed to ensure the security and well-being of your family and assets by creating an effective “safety net” in case the situation in your home jurisdiction deteriorates quickly and significantly.
You can read more on the topic in the following articles on the International Wealth portal:
- The main section of our portal devoted to citizenship for investment.
- Citizenship of St. Kitts and Nevis for Investment.
- Acquire the citizenship of Vanuatu by investment.
- Caribbean Citizenship by Investment and Immigration to the Region.
- Dominican Republic: Residence by Investment.
- Citizenship of Montenegro by Investment.
We are always ready to discuss any issues related to business, investment programs, bank accounts, asset protection and diversification. We offer you help and support in ensuring the most valuable thing – the safety of your family and assets. Contact us for more details at firstname.lastname@example.org.