Although the Dominican Republic is not typically regarded as a tax haven, that is actually one of its attractions. Unlike traditional offshore centres, it has not been under pressure from the likes of the OECD, the G20 and the Obama administration. The Dominican Republic has a territorial tax system much like Panama’s, meaning that you can live there and enjoy the beaches tax free, provided your income comes from outside the country. It’s also known as one of the more liberal places for those seeking a second passport or citizenship.

The following is an edited version of an article by Rob Montes appeared in last week’s Q Bytes, our free newsletter. If you are not yet on the distribution list, sign up here: Free Q Bytes Membership to receive more exclusive content like this on a weekly basis.

Three Good Reasons to Consider the Dominican Republic for Second Passports and Offshore Investing

The more I learn about the Dominican Republic, the more I like it and see potential. Learning more was my original purpose in studying its national history. Right now the country has three things about it that would be particularly appealing to our members:

• Tax Haven – Dominican Republic has a territorial tax system, meaning that if you live there, you would only be subject to pay taxes if you had local income. You can earn what you like outside the country and you don’t even have to declare it, yet alone pay any taxes. This applies to both individuals and companies.

• Second Passports – Dominican Republic is one of the most liberal countries when it comes to granting citizenship through naturalization. After two years of residence, you can ask for a passport. As long as you haven’t done anything to upset the President, he will sign a decree making you a citizen. Absences of up to one year at a time don’t affect your residency status. This liberal naturalization law dates back to 1948, and there is much talk of it changing soon. Dual citizenship is allowed.

Note: Please do not confuse the Dominican Republic with the Commonwealth of Dominica. The Commonwealth of Dominica is a small, English-speaking island state with an established economic citizenship (second passport) program catering mainly to the super wealthy. The Dominican citizenship program requires an investment of hundreds of thousands of dollars. With Dominican Republic, however, you could likely obtain your second passport for as little as $10,000 – $15,000 plus the two year wait.

• Liveability – Dominican Republic is a good place to live. First of all, it’s affordable. The tax exemption you get in the Bahamas by buying a half-million-dollar property you get almost for free here. The capital, Santo Domingo, is a modern cosmopolitan city with a beautiful colonial heart. The Spanish colonised it, then the Americans were mainly responsible for the development of the city. The country’s second city Santiago, and the beautiful north coast, were only joined by decent roads built by the Americans in the 1920s. Before that, the north was almost a separate country – trading more with the British and Germans. Today there is a substantial Jewish population up there, and parts where French and Italian are frequently spoken. So there’s really something for everybody.

Dominican Republic has not been high on the traditional lists of places to retire to, that are hyped on the internet. This might be a good thing. Real estate is good value, it’s relatively easy to immigrate and obtain citizenship, and the business environment is nearly as favorable as the climate!

We will be in Dominican Republic next month and if any subscribers would like to get together, feel free to e-mail me. We can also recommend a special VIP immigration processing service, so you can get your initial residence by spending as little as one day in the country.

Traveling with a second or even a third passport is becoming far more commonplace and accepted – that’s the conclusion of a recent article in the New York Times called Carrying a Second Passport? It’s not just for spies covering the advantages of travel with multiple passports, second citizenships and naturalization. Many Americans, says the article, don’t even realize that they already hold dual nationality and have the right to carry a second passport. Others, of course, don’t realize that they can completely legally buy a second passport through a so-called “Economic Citizenship” program.

For example, Alessandro Pappalardo, an artist in New York, holds passports from Italy and Argentina. Last year, he added an American one. Previously an airline employee in Argentina, he said, “I used to go a lot to Brazil, and I would always decide what passport to show depending on what line was shorter.”

Another example quoted in the article is Stefan Stefanov, who holds both United States and Bulgarian passports and works in Poland. He decides which passport to use depending on where he is headed for. “Of course, I don’t hide that I am a U.S. citizen,” Mr. Stefanov said. “But I don’t parade it either.”

Although statistics are hard to track down, as the world becomes more international and American citizens frequently feel discrimated against or targeted when traveling overseas, more Americans seem want second passports. “Savvy travelers and business travelers want to make sure they have two passports based on nationality because there are certain advantages,” says Jan Dvorak, president of Travisa, a passport services company in Washington, D.C., quoted in the Times article.

Perhaps the greatest advantage to holding a second passport for the global citizen is the ability to work without restriction in various countries – a particular benefit of passports from countries in the European Union. Also, says Dvorak , carrying a second passport is “a way of hiding where one has been,” when traveling among countries with soured relations – for example between Israel and Arab countries.

So how does one actually go about obtaining a second passport? As a general rule, to obtain a passport you must first become a citizen of the country whose passport you wish to carry. Once that is completed, the process of applying for a second passport is straightforward. Of course, it’s qualifying for the second citizenship that is the difficult part. But there are ways, even if you don’t have Irish, British, Italian or German ancestors. Israel, for example, allows anyone of Jewish heritage to use what is called aliyah, or the ‘Law of Return’.  This grants instant Israeli citizenship to anyone of Jewish ancestry or anyone who converts to Judaism.

Ruth Yoffe is another example quoted in the Times article who also carries a second passport. Ruth is the founder of Reloop Designs, a company that hires handicapped people in Cambodia to weave trendy baskets from recycled plastic. As a citizen of the United States and New Zealand, she travels frequently throughout Southeast Asia. “For obvious safety reasons, I always try and travel and put my visas on my New Zealand passport,” she said. “On a plane, I don’t want to be identified as an American if I have that choice, depending on where I am heading.”

Another advantage is cost savings. Visas are cheaper for New Zealanders. “They assume anyone else from any other country can’t be as rich” as Americans, Ms. Yoffe said. Many countries such as Brazil charge extra fees to Americans to reflect the cost of obtaining a US visa for citizens of that country.

Alex Thomas, the corporate manager of Travel Document Systems, a visa and passport services company in Washington, is quoted as saying that some of his clients are “uneasy traveling with a U.S. passport, and if they have an additional passport, they prefer to use it…. four or five people a month who ask specifically what they need to do to get a passport” for another country… Because of the way things are going in the world,” he said, he expects that number to rise.

What the Times article omits to mention, however, perhaps on grounds of political correctness, is the possibility of buying a second passport. So called “Economic Citizenship” programs allow wealthy individuals and families to purchase a second citizenship from a country such as St Kitts and Nevis or Dominica. The only requirement to obtain one of these passports is to make an economic investment in the country.

Although expensive, these high end economic citizenship programs are often worthwhile for wealthy individuals who do not have the time or inclination to wait the two to five years necessary to establish residence in another country and apply for citizenship via naturalization in one of the more liberal countries for obtaining second passports such as Dominican Republic or Paraguay. Additionally, they have the advantage of being completely tax free and not being mired in bureaucracy or military service obligations.

Second passports and citizenships, as an important asset for sovereign individuals, are a frequent topic in The Q Wealth Report. We keep readers up to date on the frequent changes to the rules. If you are interested in obtaining a second citizenship or passport, for privacy, freedom and protection, you need The Q Wealth Report. Sign up today on this site!

Investing in dying industries is not normally a smart thing to do… unless you can get some benefit from a government by doing so. Here’s one of those cases.

In 2005 the WTO and European Union withdrew preferences given to the Eastern Caribbean Sugar Industry, thereby effectively closing it down, since Caribbean sugar could not compete with bigger producers in the Caribbean and further afield.

As a consequence of this, the government of St Kitts and Nevis, a group of islands in the Eastern Caribbean, would like to “diversify the agricultural sector and to stimulate the development of other sectors of the economy.” They set up a Foundation with this aim, The Sugar Industry Diversification Foundation (SIDF), in 2006. And they are offering a very big bonus to you if you are prepared to help them financially with this task – you can obtain a second citizenship and passport for yourself and your family almost immediately.

As regular Q Wealth Report readers know, there are only two countries in the world offering so-called Economic Citizenship programs – that is, the chance to buy a legal second citizenship and passport within a matter of weeks. One is The Commonwealth of Dominica (an English-speaking Caribbean nation, not to be confused with the Dominican Republic) and the other is Saint Kitts and Nevis. The difference between the two citizenship programs is that in the past Dominica required a “non-refundable investment” paid direct to the government, whereas St Kitts required the purchase of real estate, worth at least $350,000, in specific designated projects.

Many people were put off the St Kitts program due to the real estate investment. Let’s face it, some of us a real estate investors and some are not. Whilst it could be a good deal long term, and there was some chance of seeing your money back again one day, coming up with $400,000 for the privilege of owning real estate on a hurricane-prone island can be a hassle, especially if you never plan to live there. For a lot of people, it was more attractive just to pay once up front, get the second passport and forget the hassles.

So the authorities in the St Kitts capital, Basseterre, came up with an alternative. Although the real estate investment option is still valid, instead of buying real estate, you can now choose to make a one time donation to the Sugar Industry Diversification Foundation. This requires substantially less up-front capital, as the contribution required is $200,000.

A little history: the Citizenship Program was established in 1984, which makes this the longest established citizenship-by-investment program. Regulations regarding citizenship-by-investment are contained in Part II, Section 3 (5) of the Citizenship Act, 1984. The actual government policies with regard to the Citizenship-by-Investment program (such as investment requirements etc.) are set by Government through Cabinet Decision.

The principal advantages according to press releases put out by the St Kitts government are:

· Citizenship is valid for life, for the applicant and all eligible family members.

· Dual Citizenship is permitted, without the requirement to notify the applicants home country, and without any need for the applicant to reside in St Kitts and Nevis.

· Passports can be issued to the applicant an all eligible family members, and may be easily renewed via a worldwide network of consulates.

· St Kitts citizens enjoy a wide range of visa-free travel:- Austria, Belgium, Britain, Canada, Denmark, Finland, France, Germany, Iceland, Italy, Greece, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and most British commonwealth countries. When a visa is required, they are also relatively easy to obtain.

· New citizens qualify for full residency status including the right to work in St. Kitts and Nevis

· Perhaps best of all: Tax Free Status on foreign income, capital gains, gift, wealth and inheritance tax

To qualify for Citizenship-by-Investment via the Sugar Industry Diversification Foundation, there are four different categories:

A. Single applicant: US$ 200,000 contribution required

B. Applicant with up to three dependants (i.e. one spouse and two children below the age of 18): US$ 250,000 contribution required

C. Applicant with up to five dependants (i.e. one spouse and four children): US$ 300,000 contribution required

D. Applicant with six and more dependants: US$ 400,000 contribution required.

In each of these categories, the total amount includes all government and due diligence fees. The documentation required for an application is strict but reasonable, and the application procedure is well organized.

Note: The above article is adapted from one that originally appeared on the Global Nomads Campfire Blog. If you would like further information, read the Global Nomads Caribbean Offshore Contacts Report “Offshore and Sunny” for recommended citizenship consultants and other Caribbean contacts. Members may also contact the Q Wealth offices in London for referrals and advice.

Along with Australia, France and Spain, New Zealand is in the top four destinations or Brits deciding to expatriate. It’s also attracted many immigrants from Asia over recent years. New Zealand offers stability and neutrality, a beautiful country, a booming economy, and a healthy, stress-free lifestyle that is not found these days in other first world English speaking countries. Or, as W.G. Hill once said, it’s great if you like fishing and no nukes.

The good news is that a major new immigration bill is working its way through parliament designed to make it even easier for you to emigrate to New Zealand. The birth rate in New Zealand is too low to fill the many job vacancies that are arising. Besides, New Zealand loses many citizens every year as they move to the likes of Australia and the United Kingdom seeking their fortunes. The population is aging and the kiwis know that they need new immigrants to fill the gap if growth is to be sustained.

The new immigration bill is designed to make the move to NZ much more smooth and straightforward, by razing a number of bureaucratic hassles from the procedure. Immigrants will not only be given visas, but also the support they need to make a transition to a new life in NZ a success.  This is all exceptionally good news for those hoping to move to New Zealand for a new and better life.  Watch out for the new immigration bill, and visit the New Zealand Immigration Department’s website for continuous updates on how to apply for visas to go and live, work or retire offshore in New Zealand.

Anyone seeking a tax-free residence, possibly leading to a legal second citizenship, should seriously consider The Republic of Paraguay, which has one of the most liberal constitutions in the world. Here are a few reasons:

• Paraguay has no personal income or capital gains tax, and one of the lowest costs of living in the world.
• Official Residence in Paraguay is relatively easy to obtain. Once granted, is valid for life. No renewals necessary.
• Once you have official residence, there is no legal obligation to stay in the country.
• After three years of Official Residence, you may apply for Paraguayan nationality through Naturalization. (Article 148 of the Constitution)
• Dual or multiple nationality is permitted subject to certain limitations. (Article 149 of the Constitution)
• Honorary Citizenship may be granted by Act of Congress (Article 151 of the Constitution)
• Paraguayans enjoy excellent visa free travel opportunities, including most of Europe.

If you are interested in finding out more about residence and citizenship in Paraguay, we can refer you to one of The Q Wealth Experts who can help you. Please contact the London office in the first instance.

Second citizenships from the Caribbean have been in the news recently. This time, however, it’s nothing to do with the economic citizenship programs of Dominica and St Kitts!

Many politicians in Caribbean nations hold multiple citizenships. It’s quite normal for people from small countries, many of whom have gone abroad to work, acquired citizenship there, then come home to play a more active role in island politics.

Recently, however, a minority of extreme nationalist politicians have been making it into an issue, leading to resignations and to other politicians renouncing citizenships publicly. It’s been in the news most recently in Jamaica, but also in St Kitts and Nevis, Grenada, St Lucia, Trinidad and Tobago, and Guyana.

Most voters seem to take a reasonable approach. BBC, for example, quotes a Jamaican businesswoman Thalia Lyn as follows:

“A lot of them go abroad because they want to make money and then come back here and pick up from where they’ve left off.

“And to say to them that if you want to make a contribution to your country it’s not allowed and you would then have to disclaim the country where you might have made your fortune, I don’t think that’s quite right.”

If you’re reading this, you probably don’t need much convincing of the fact that dual or multiple citizenships are beneficial – not just for the individuals involved, but also for the countries in this case who get to benefit from people with more international experience… as they say “travel broadens the mind”. In government, surely an open mind is essential!

You can read more about this issue in the following BBC articles:

Dealing with the diaspora

Dual citizenship: loyalty or convenience

We also recommend this Q Wealth webpage if you haven’t yet seen it:

The Q Wealth Report article on Second Passports