Plan B: Why Americans Seek Second Foreign Passports in the Caribbean

Second citizenship is not the most popular service in developed countries, and there are certain reasons that explain this trend:

• First of all, it is in human nature to be inert and reluctant to change until the situation around you gets definitely worse. 
• Second, there is a popular myth that the majority of people residing in safe jurisdictions don’t really need a second passport. 

Serious businessmen do get investor passports more often, but they have a very practical reason to do so: tax optimization. However, most ordinary citizens consider this opportunity optional as life seems to be quite comfortable with just one passport. But is that really so?

Well, let’s roughly divide people into two categories:

1. Individuals that tend to concentrate on their immediate comfort and avoid looking at opportunities or modeling their future in any way.

And it is this category that usually considers second citizenship to be an optional thing. For instance, a US passport allows visa-free travel to 186 countries and is considered extremely prestigious. And this seems to be enough – why crave for more?

2. People who like to have a choice.

You cannot reasonably choose where to live if you have only one passport, right? 

This category usually wants to freely live and work in other countries (not just visit them for tourist purposes) or give their children a possibility to do so. What is more, they understand that the possibility of moving to another country when the situation in your homeland gets worse for some reason is a precious thing that adds a lot to personal freedom. We often talk about freedom, but do you often experience it? Sometimes just a mere thought that you actually have a choice can work wonders.

Anyway, we are going to discuss in detail what a second passport can give to an ordinary resident of a perfectly safe country in practical terms.

What’s the Use of Second Citizenship?

This is an important question as you will hardly make any steps if you are not internally motivated to do so. Read the list of reasons below to find something that resonates with you and can help you arrange the life you want to live:

• Investment programs do not duplicate the possibilities offered by a national passport but complement them. For instance, a US citizen has the right of visa-free entry to numerous countries, but it does not mean that you can permanently live and work in a new jurisdiction. In other words, even if you have a US passport, you will generally be obliged to return home after some time. Alternative citizenship is not subject to such restrictions: you can extend your workation for as long as you want.
• Your national passport is your “Plan A”, while a second passport is your “Plan B.” It practically means that you can quickly take care of your safety (and the safety of your loved ones) in case of force majeure in your country. It is one thing to leave in haste and chaos and abandon all of your property and assets, and it feels absolutely different when you relocate using a well-thought-out plan, retain most of your assets, and have a carefully arranged safe airfield in an alternative jurisdiction.
• The degree of your personal freedom, of course. This factor may seem abstract to those living in totalitarian countries, but not to Americans! Personal freedom is the cornerstone of the USA as a state, and it takes a special place in the heart of every US resident. So then, take as much freedom as you can handle!
• Plan B passport is not an unreasonably expensive toy for a limited group of enthusiasts – in fact, it is quite affordable. If you need detailed information and prices, you will find it here. In general, we can say that financial requirements are not very tough: if we take Saint Kitts and Nevis, for instance, you will need to invest USD 200,000 (as a donation to the state fund or investment in state-approved real estate that you can sell in 5 years) + USD 20,000 (the fee payable to International Wealth portal experts who will handle your case) to get your second passport within no more than 2 months. It’s really quick and not unreasonably expensive, let’s admit it.
• An additional layer of protection against global shocks and cataclysms. The COVID-19 pandemic has made it clear that even US citizens may not always feel safe: this was particularly evident in the early weeks of the pandemic when the social protection system and health services were virtually paralyzed.
• A second foreign passport is your ticket to the world of digital nomads. The start of the new century resulted in the collapse of all the time-proven ideas about work: you no longer have to be tightly glued to one place where your company put you. Digital nomads can live far away from their employers: all they need is a laptop and a stable Internet connection. If they get an alternative passport, they can actually enjoy the freedom of movement that allows them to freely drop their anchor in a place they liked or quickly relocate if their new home does not seem to be good enough.
• Higher level of independence. If all the shops around are suddenly closed, you will be alright if you have food supplies back in your storage room, right? The same logic applies to Plan B passports: a US or EU passport does give you the right to visit many countries without a visa, but you still cannot live and work in another jurisdiction for as long as you want to. When the country is hit by any force majeure event, it tends to impose restrictions, and people with just a national passport may be trapped. However, if you have a second passport, you can leave very quickly before the country tightens the noose.

Caribbean Offshore Jurisdictions

If you are a US citizen interested in obtaining second citizenship (or at least considering this opportunity), take a close look at the Caribbean. This is an optimal choice by the overall balance of characteristics, including geographical proximity to the United States, and a relatively low financial threshold of entry. You will not avoid all the costs, of course, but Caribbean citizenship by investment is quite an affordable path towards more freedom and safety. At the end of the article, you will find links to each Caribbean state that offers second passport programs. Anyway, nearly everyone would be happy to have a Caribbean workation!

Anguilla

• This is an overseas territory of Great Britain.
• Many basic taxes are nonexistent, such as corporate taxes on offshore companies (provided that income is received outside Anguilla borders), personal taxes, etc.
• There is no currency control.
• The threshold of investments in real estate starts from USD 750,000, and it should be held for 5 years at least.
• You can make a non-refundable contribution of USD 150,000 as an alternative.
• You can participate in the High Value Resident Program if you have paid an annual income tax of USD 75,000 and own real estate in Anguilla whose value amounts to at least USD 400,000.

Bahamas

• You can take advantage of a wide range of financial services.
• There are no tax liabilities on income received abroad.
• Bank secrecy is enshrined at the legislative level, thanks to which the clients of Bahama banks enjoy the same level of privacy as the customers of the best Swiss banks.
• Numerous Tax Information Exchange Agreements (TIEA) are in place.

Barbados

• Benefit from the minimum level of taxation (corporate tax is set at 1-2%).
• Preferences for business that has a physical presence in Barbados.
• Numerous DTT agreements have been concluded.
• TIEA agreements were also concluded in the wake of strong pressure from the OECD/G20
• There are no withholding or capital gains taxes.

Belize

• Take advantage of a very simple procedure for the registration of offshore companies and banks, as well as formation of trusts and funds.
• Multiple tax exemptions (some are available subject to certain conditions, such as the location of the source of income).
• Strict observance of bank secrecy.
• Disclosure of data on beneficiaries only by court decision.
• Agreements on tax information exchange are in place.
• There is no agreement with the United States on the tax information exchange.
• Obtaining a residence permit/permanent residence is simplified as much as possible (and is completed within no more than 1 year), and family members can be included in the application.
• You will receive your citizenship within about 5 years, after which you will be able to live anywhere in the world without the risk of losing Belize’s passport.

British Virgin Islands (BVI)

• Offshore accounts are not taxable.
• TIEA Agreements with 19 countries (including the USA but not Canada).
• Offshore companies are not taxed.
• International companies do not pay income tax if the income was received outside the BVI.

Cayman Islands

• The country has the reputation of an International Financial Center.
• Offshore companies are not liable for any income tax if the income was derived from sources outside the Cayman Islands.
• Companies with domestic registrations do not pay local tax.
• There is no currency control.
• The laws of the Cayman Islands guarantee the confidentiality of offshore business.
• TIEA Agreements with 26 countries (including the USA and Canada).

Costa Rica

• Numerous tax exemptions (Costa Rica is not a classic offshore).
• Companies incorporated in Costa Rica are allowed to conduct business both within and outside the jurisdiction.
• There is no currency control.
• Exchange of tax information with the United States and Canada.
• Simplified procedure for obtaining a residence permit, permanent residence and Costa Rican citizenship.

Dominica

• You can obtain economic citizenship of the Commonwealth of Dominica.
• A classic tax haven.
• The procedure for offshore structures (banks, funds, trusts) is as simplified as reasonably possible.
• An excellent level of privacy protection.
• TIEA Agreements with the USA and Canada.
• A simple procedure for obtaining a residence permit.
• There is a program for obtaining citizenship by investment (family members can be included in the application).

Panama

• Panama’s second non-citizen passport for travel.
• One of the best options for tax optimization.
• Offshore companies registered in Panama can conduct business operations without paying taxes.
• There is no income tax on offshore company owners.
• Foreigners are in no way restricted in their rights.
• There are programs which allow obtaining a residence permit/permanent residence by investment (including investment in real estate).
• Panamanian citizenship provides visa-free access to 121 countries.
• Privacy laws apply.

Saint Kitts and Nevis

• Citizenship and second passport of the Federation of Saint Kitts and Nevis.
• A clean tax haven.
• There is no currency control.
• You can benefit from the fastest possible procedure for acquiring citizenship at a reasonable fee.
• Exchange of tax information with the United States and Canada.

Grenada

• Economic Citizenship of Grenada.
• Official use of USD.
• There are no restrictions on the types of offshore business (you may need a special permit), but you will not be able to do business with Grenadians and own real estate on the island.
• Acquiring a ready-made company is an absolutely legal and convenient way to start your business.
• There are no requirements for the minimum authorized capital.
• Guaranteed confidentiality for beneficiaries of offshore companies.
• Minimum threshold for acquiring citizenship by investment.
• The Grenadian passport allows visa-free access to 141 countries.
• There is an E2 visa agreement with the USA.
• There are no mandatory residency requirements in Grenada.
• World income is not taxable.
• Dual citizenship is officially allowed.

Comparison of Popular Jurisdictions and Conclusions

An in-depth analysis of the most promising options (from our point of view, of course) without consideration of a particular client’s needs and requirements does not make much sense. The choice of an economic citizenship program is a customized service, and we cannot offer a one-size-fits-all solution. Therefore, if you are interested in this issue from a practical point of view, we strongly recommend that you book an individual consultation to discuss all issues with our experts and ask them any questions. However, we will still make a blitz-comparison that could be of use to some of you..

Comparison of popular offshore destinations (age restriction is indicated in square brackets):

* – State fees and duties, overheads, or payment for the services of the International Wealth portal experts are not taken into account.

It is easy to see that the programs offered by Grenada, Saint Kitts and Nevis, and Dominica are very close in terms of conditions. They will be of interest to many potential investors, and especially to US citizens. The final choice should be made only after consideration of all the main factors since the similarity of the programs does not mean that they are identical. Critical details that are specific to you may be immediately invisible, so the preliminary stage of analysis is mandatory.

Sections on our website dedicated to specific jurisdictions:

• The Bahamas
• Belize
• British Virgin Islands (BVI)
• Cayman Islands
• Dominica
• Panama
• Saint Kitts and Nevis
• Grenada

All the information you need to make an informed decision will be provided to you at an individual consultation. If you are ready to discuss the terms and conditions, please send us an email (info@offshore-pro.info).

We wish you good luck in all your personal projects and business undertakings!