There is Much More to Second Passports than Visa-Free Travel

The reasons why citizens of developing countries wish to get a second passport of the Caribbean offshore and access to visa-free travel are clear. These include protection from potential force majeure risks, protection and/or diversification of assets, a back-up jurisdiction for residence, and many other factors. A second passport and visa-free travel will not ensure physical security, but they can help if the situation in one’s home country becomes unbearable and life-threatening.

It is much more interesting to understand why visa-free travel mode and a second passport of five Caribbean offshore jurisdictions (St. Kitts and Nevis, St. Lucia, Dominica, Antigua and Barbuda, Grenada) may interest the U.S. nationals and citizens of the European Union where the level of safety and security is rather high, and the risks of force majeure circumstances are very low. Moreover, Europeans and Americans are good at counting money, they are not inclined to spend it on something unnecessary, from their point of view.

Visa free with second citizenship

Visa-Free Travel. A Constant or a Variable?

People who are far from investment business or big politics believe that visa-free travel and a second passport are in no way related. Moreover, they are sure that alternative citizenship of the offshore Caribbean region or any other region in the world will not be needed. And not everyone will agree to pay quite a lot for citizenship by investment programs. But does this mean that you do not need a second passport at all if you are a citizen of the United States or the European Union? After all, visa-free travel is already guaranteed to you officially. Your national passports provide you with this opportunity from the very beginning. But do not yet jump to conclusions.

To begin with, we would like to note that the European Union and the United States can say all they want that offshore is an evil creation of the modern economy. And they can actively fight the offshore business by all means, considering it a breeding ground for tax evasion and financial violations (and for a reason). But neither the U.S. nor the European Union will ever abolish visa-free travel for passport holders of any Caribbean offshore.

There are many reasons for this. These include the Caribbean’s close ties with the UK, the extremely low risk marker, and the relatively small number of Caribbean passport holders and their high ability to pay. In addition, if visa-free travel for such citizens is restricted or abolished, they will re-orientate and choose to travel to another region or country that will get significant financial preferences.

But there have already been cases when holders of EU or U.S. passports were deprived of the right to visa-free travel. Thus, in the era of the Cod Wars (the conflict between Iceland and the United States), Canada voluntarily abolished visa-free travel for citizens of Spain. For one night, but yet it was abolished. A little later, citizens of Hungary and Mexico found themselves in the wrong place at the wrong time

Similar issues are possible in the opposite direction. Canada canceled visa-free travel for citizens of St. Kitts, and Antigua. It is clear that sooner or later it will be resumed, but the second passport of these offshore jurisdictions has become a little less efficient than before. Pessimists say that visa-free travel for those with a second passport of Vanuatu, Dominica or Grenada may be canceled rather soon, but we believe this will not happen in the foreseeable future.

Anyway, this leads to a conclusion which is not obvious at first glance. The second passport and visa-free travel is not a constant, not something stable and unchangeable. Due to political or economic reasons the option that used to be so convenient before, may become unavailable, and most likely you will not have enough time to do anything to change the situation. That is why the second passport (it might as well be the third or even the fourth) can no longer be considered just an optional condition for a comfortable and safe life. And this statement is equally true for developing countries, as well as for the U.S.A. and EU.


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Second Passport and Globalization

One may accuse you of being disrespectful to the country where you were born due to a collection of passports of several countries (among which there will certainly be a document confirming your citizenship of one of the offshore jurisdictions). Is it really so? We do not take the liberty of saying that our answer to this question is exactly the right one, but we still believe that love for the homeland and concern for one’s safety are not as connected as to make an issue out of it. That is why a second passport and visa-free travel should not be brought as proof that one does not love the country where they were born and where they spent their childhood.

Here is an example. When you go on a trip to visit several countries, you probably take not just cash in convertible currency (USD, EUR, GBP, CHF), but also your credit cards. They may be issued by banks from different countries, but that does not bother you. You understand that diversification of financial assets will allow you to cope with any force majeure circumstances. This does not mean that you do not love your country.

And if so, why would you deprive yourself of the right to enjoy visa-free travel if one of your passports does not give such a right, but the second passport, on the contrary, provides the usual level of comfort when crossing the border? Would you say that several sources of money are acceptable, but several passports are not?

Please note that the second passport often affects its holder indirectly, when the latter tries to get to know the culture and traditions of the country that issued it. You are also likely to make investments, invest in the economy, buy goods and products in local stores, run a  business in the country. The second passport facilitates all of these opportunities. Visa-free travel has nothing to do with it. The second passport is a set of opportunities, and if the countries of the Caribbean region make it easier to get one, why should you feel sorry for it?

Another point that has become particularly important in recent years. It has to do with personal security and the ways and methods that make it possible. When it comes to international travel, your EU or U.S. citizenship should be seen as a negative factor, especially if you are visiting troublesome countries. Attitudes towards citizens of the U.S. and EU can be unfriendly or even outright hostile. Their safety is de jure guaranteed by the country that issued the identity card (U.S., EU). But in a situation where you have to act here and now and the embassy/consulate is far away, help through official channels can be a long wait.

In the context of this conversation, a second passport of any Caribbean jurisdiction will not just ensure your visa-free travel. It will allow you to travel through troublesome countries with a sufficient level of security, because Saint Kitts and Nevis, Saint Lucia, Dominica, Antigua and Barbuda, Grenada are not in conflict with other states and try to be as invisible in the international political arena as possible. Therefore, visa-free travel that your second passport of any Caribbean offshore provides, contributes to the extra level of security.

Second Passport, Caribbean Offshore and Taxes

There is no direct connection between these concepts. But it is no secret that the second passport (visa-free travel to a much lesser extent) is one of the effective instruments of tax optimization. This is especially true for the U.S., where the tax burden is heavy, and every opportunity to save money is in demand.

Due to the U.S. tax system whose archaic character was criticized by many, the income of any American citizen is taxable no matter where it was gained, in the U.S. or abroad. So at first glance the second passport and visa-free travel will not give the U.S. citizens any more options for tax optimization. Unless you think of sophisticated business arrangements (e.g., a company registered in Belize and a management facility in the U.S.), this statement remains true… just as long as you remain a U.S. citizen / tax resident.

Renunciation of American citizenship is a very important and, in many respects, a radical step. But should you decide to do it, having a second passport (or rather, a second citizenship) will come in handy. That is why the second passport of any of the Caribbean offshore countries is especially in demand with the U.S. nationals. 

As for the Europeans, it is not that simple. They have almost no actual ways to save on taxes using their second passport. At least due to the fact that having a second passport of a Caribbean offshore does not relieve them of tax obligations in their home country. It is clear that it is possible to register a business offshore, but this step requires an accurate assessment of the tax consequences.

On the other hand, if the European Union countries follow the way of the United States and include the global income of their citizens in the taxable base, a second passport will be very much of use. Nicolas Sarkozy spoke about such changes during his presidency. It did not come to practical implementation then, but the Europeans received a clear and specific signal. As a result, there has been an explosive growth of interest on their part to citizenships of the Caribbean region.

Summary and Key Takeaways

Visa-free travel and the second passport are not the most necessary options for an average person. Especially if they live in a stable jurisdiction, do not use proactive tax cutting methods, and have never thought of moving abroad. Europe has not known major wars or social upheaval since 1945, and security structures (especially NATO) radically reduce the risk of a serious, global conflict.

But you might look at it another way. There are many frozen conflicts smoldering on the continent (Serbia-Kosovo, Cyprus, Britain-Ireland, the Spanish Basques, Transnistria, etc.). Under unfavorable circumstances, they can flare up, turning into hot spots of open confrontation.

And in this situation, having a second passport and the right to visa-free travel will come in very handy. You will be able to ensure safety and security for yourself and your family, keep most of your assets and leave the hotspot in time for a safe and comfortable jurisdiction in the Caribbean. So the question of whether you need a second passport and visa-free travel at all is incorrect. You have to figure out for yourself whether or not you need these opportunities. You can find more information on citizenship by investment in our specialized article.

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