We always inform clients to seek legal advice (talk to a lawyer) on all dual citizenship matters, before applying for citizenship by investment.
While many tout dual citizenship bringing extensive benefits such as freedom, mobility etc, little is told to investors about the drawbacks of dual nationality, which we will discuss one by one below.
Dual citizenship is complex and the rules and laws regarding citizenship vary between different countries, it may be in your best interest to consult with qualified experts, including accountants and lawyers. This is because national laws, that often conflict with each other, thus allowing for multiple citizenship situations to arise.
Talk to Experts
Make sure you get a proper qualified advice from the experts and you are properly informed with pro’s and con’s associated with new citizenship. Talk to the following people
- Lawyers
- Accountant
- Bankers
- Agents
Dual Citizenship
In many countries particularly asia, dual citizenship is forbidden. For example China, India, Singapore etc.. your home country may not permit dual citizenship or require prior permission (you are not allowed to hold or travel two or more passports). Sometimes you could lose your citizenship automatically without even knowing it. If your citizenship is revoked, passport is also revoked and you lose all the citizen rights in your home country.
In these situations you must discuss your case with immigration lawyer BEFORE applying for citizenship in the foreign country.
Military service
Dual citizens are required to do conscription depending on the compulsory or not. If you are citizen of more than one country you could be called to serve in the military in more than one country. For example, in Cyprus, Greece, Israel, Singapore conscription is mandatory.
Legal systems
Dual citizens are subject to different legal systems and may need to hire lawyers in both countries to navigate legal issues. For example your marriage, divorce, adoption of child, pensions, healthcare access subjected to different rules and regulations can be expensive and costly.
Taxation
If you are dual citizen of high tax country, you might need to file taxes at two places (different tax laws), can be a burden for you. For these reasons double taxation agreements exist to help you.
Renouncing
There are many countries in the world where it is impossible to renounce your birth nationality.
- Africa: Algeria, Angola, Eritrea, Morocco, Nigeria, and Tunisia
- The Americas: Argentina, Brazil, Bolivia, Costa Rica, Cuba, Dominican Republic, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Panama, and Uruguay
- Asia: Afghanistan, Iran, Lebanon, Maldives, Syria, and Thailand
For example in the US, IRS requires you to file taxes on worldwide income for 10 years, post renouncing your US citizenship.
Politics
Dual citizenship can be a barrier if you are entering politics or parliamentary elections for being “unpatriotic”. Eg. Australia, Egypt, Israel etc.
Employment
Dual citizens are restricted to work/employed in Highly sensitive jobs working in the government may require prior clearance. People with dual citizenship may be viewed have the potential to act contrary to a government’s interests, and this may lead to difficulties in acquiring government employment where security clearance may be required.
Travel Passport
A Growing number of countries may require individuals to enter and exit the country ONLY on their passport of citizenship, which may limit their ability to use their foreign passport. For example US citizens must use their US passport to enter and exit US borders.
Banking
As per OECD common reporting standards, Banks may force you to disclose all citizenships and residencies under CRS obligations to maintain your bank accounts. Depending your citizenship you will be subjected to additional scrutiny for AML and prove source of funds.
Consular Access
Dual citizens may have limited consular support in the soil of country where you hold citizenship. For example, the US embassy cannot help someone who lives in Brazil and has both US and Brazilian citizenship.
Family members
Dual citizenship can have complex bureaucracy for matters on adoption of child, child birth to foreign parents, child’s education at international schools, marriages and divorce (alimony payments)
