A U.S. passport is indeed one of the strongest passports in the world, and the majority of people enjoy the privileges available to American passport holders. As per statistics for 2020, there were more than 50 million foreign-born residents in the USA. America is known as the land of opportunity where people move to make their fortune and improve their lifestyle. However, the current trends of migration are pointing to something different. The 2nd decade of the 21st century shows a record high of 37000 US citizens giving up their US passports, and this rate is increasing every year.
What are the Reasons Americans are Seeking a Second Passport?
Rich American citizens are trying to obtain a second passport. The statistics show a 300% rise since 2020. When asked these people about their decision for a plan b passport, they marked their own and their family’s safety as the leading cause.
1) Favorable Tax Regimes Attracts American Millionaires
The US tax system is the top reason forcing American millionaires to get a second passport. Being a US citizen, whether you are a resident or non-resident, you are required by the law to pay taxes. The progressive taxation drains the income of wealthy Americans by more than 1/3rd. Further taxes on your physical assets within the USA, i.e., capital gains, dividends, gifts, property, etc., mean half of your wealth stays with the government.
The favorable tax regimes attract a large number of wealthy Americans to go for a Plan B or a second-tier passport where they can build their empire. Countries make favorable tax policies for wealthy investors, which is why American millionaires consider the citizenship of these countries. These countries exempt their income, and thus, they can contribute more to the growth of their empire.
2) Political Uncertainty
During the last decade, American society has become polarized, and the political swings are driving people out of America. Wealthy Americans foresee a downfall in their society, and they prefer to live abroad rather than deal with state affairs. Millionaires consider the changing tax regime as a threat to their status, while some consider hate crimes as a threat to their freedom.
3) Impact of the Pandemic on Wealthy American Citizens
The pandemic caused by COVID-19 caused outrage as people were restricted to their homes and had no freedom to move at all. This era of uncertainty exposed wealthy US citizens to how vulnerable they can be during crisis situations. People were denied entry to other countries, especially to Europe; no matter how much money they offered to catch a flight to the country, they felt safer.
4) Dissatisfaction With Healthcare System
Despite the fact that the US is a top name when it comes to spending on public health. With $4.3 trillion for healthcare alone in 2021, which is 17.8% of GDP. Despite the fact that the US spends 4X more on health than countries like Japan, South Korea, and New Zealand, the country doesn’t guarantee health coverage. Further, the US had 2.8 hospitals for each 1000 population, which is quite lower than the OECD average of 4.3 beds for every 1000 persons. Further, the reduced average life expectancy is also a cause of dissatisfaction for people in the US healthcare system. Despite being the leading government with a substantial budget for healthcare, the system isn’t that efficient. In countries with better health facilities and active responses to their problems, people consider it safe and secure, with easy access to cost-effective and emphatic healthcare facilities.
5) Gun Violence
The laws regarding weapons are moderate in the US and vary state by state. However, this freedom seriously threatens people’s lives, and the statistics show many people love their lives every year. You can’t afford to encounter a person holding a gun just because of his dissatisfaction or difference of opinion with you. The cause of death due to physical assaults is 7.4 persons for every hundred thousand population which is far beyond the average of 2.7 for OECD countries. Mass shootings claimed the lives of over 44000 people in 2022 alone. These statistics are disturbing and highlight the safety issues in the US. This situation causes hysteria among people as fun violence also causes US citizens to consider a second citizenship where they can live peacefully with their family members.
Passport by Investment for American Millionaires – What you need to know?
American millionaires can make investments in various sectors to get a second passport. Investment is a good option for people to get margins, and meanwhile, you get dual nationality. The investment amount varies from country to country. Caribbean countries are offering citizenship through investments starting from USD 1000,000. A Caribbean second passport under 1 Lac USD is available until the last date of June 2024 as the upcoming price surge will require a minimum of $200K investment. So, if you are considering a Caribbean second passport, now is your best chance. The Caribbean second passport processing time is 3 to 6 months. US citizens can get the golden chance of obtaining a second Caribbean passport under 1 lac USD.
With a Caribbean passport, you can travel without a visa to countries where a US passport holder may need to meet visa requirements. For example, Antigua & Barbuda passport holders get visa-free entry to China.
Best Second Passport for Americans
Due to its strong position and visa-free travel access, the Portugal passport is the favorite among US Millionaires. The Portugal Golden Visa Program leading to citizenship starts from 500,000 euros investment in a venture capital fund. You need to hold your investment for five years. You can also fund research activities of approved public or private entities. You can also donate €250K to approved arts and culture projects. As of 2023, the country has suspended investment in real estate.
Benefits of a Second Passport
- Travel visa-free to countries where a US Passport could require a visa, i.e. China and Russia, etc.
- Second Passport can reduce tax liability significantly in the USA
- During political unrest or a global pandemic, a second passport may ease traveling
- A second passport by citizenship opens new horizons for business persons
- Second passport holders make it easy to own assets outside of the USA
- A second passport also makes you eligible to get benefits from quality healthcare and education at an even more affordable rate than the US
- You can use the second passport to spend your retirement life in a more leisurely
Why is Portugal a Top Destination for Americans?
Portugal offers the Golden Visa Program to attract foreign investors, and in turn, they get residency permits for 5 years and can move freely. With an average stay of 7 days a year and 35 days in 5 years, you get the status of permanent citizenship after that period. Immigration experts are of the view that Portugal may become the next California for US citizens as many people are moving with their wealth and talent.
Conclusion
American wealthy people feel the impact of the pandemic, changing political dynamics, healthcare, and tax policies as contributing factors to getting a second passport. With a second passport, millionaires feel empowered to travel, save tax on their taxable income abroad, and have visa-free access to countries that previously required visas for US passport holders. The influx of wealthy US citizens to Europe and Caribbean countries is evident that things are changing as these people seek opportunities to safeguard their interests.
