Ignorance is bliss – until problems occur…

The first reports of shooting came just before midnight. Within minutes, heavy explosions, muffled by the distance, echoed through the steel and glass canyons of the capital. Then the noise died down.

At the second-floor window of a room in the Marriott Hotel, this reporter and two others were listening for more sounds of fighting when they saw a man wearing a black ski mask and camouflage pants and carrying an automatic assault rifle running across a patio area outside.

The reporters crouched to the floor, but the gunman spotted them. ‘Out! Out!’ He Shouted

”Out! Out!” he shouted, aiming his AK-47 assault rifle.

Which Marriott Hotel is the New York Times talking about here? Kabul? Baghdad? No, Panama, just a little over twenty years ago. You can read the full article here.

In the gilded lobby of the luxury hotel, Panama City’s finest, seven other gunmen had herded together about 80 guests and staff members. They were forced to lie face down with their arms outstretched.

”Who’s American?” several of the gunmen shouted at once. ”Americans over there.” The gunmen pushed a group of 11 into an adjacent section of the lobby.

You know we at Q Wealth are pretty positive on Panama. Many times I’ve been in that lobby for meetings with clients. But the point is, you have to be prepared. Recent geopolitical events over relatively insignificant territories have highlighted the risk and instability of the world we live in.

Who would have thought just a month or two ago of territorial disputes involving the Netherlands, the United Kingdom and Argentina having a major effect on the global economy and politics? Surely, these are relatively stable countries, not be compared with Afghanistan or Iraq?

Yet our memories are short. Back in 1982 nearly 1000 lives were lost in the Falklands War. And, seemingly all of a sudden, tensions are heating up again in the region. Unsurprisingly, it has something to do with oil.

Venezuela, meanwhile, has had territorial ambitions over the Netherlands Antilles off its coast for years. And, as money launderer turned bank compliance officer Kenneth Rijock points out in this article, Hugo Chavez has just recently directly threatened the status of the Dutch Caribbean possessions of Aruba, Bonaire and Curacao, as well as the United States Commonwealth of Puerto Rico. The Netherlands is in no position to defend these islands and there is the added potential flashpoint that comes from the fact that US military aircraft are based in these islands.

The Libyan government, meanwhile, has recently banned entry into their country of all nationals of Schengen countries (most of the European Union, excluding UK and Ireland). Just like that. I didn’t even see it on the mainstream news. It’s something Canada does from time to time as well. Most recently with just 48 hours’ notice they suddenly started demanding visas from Mexicans and Czechs. Those who already had flights booked were left to solve the problem themselves.

The fact is that disputes like these, that can only really be described as silly, can pop up almost anywhere at any time. They could turn out to be just what politicians on all sides need to rally popular support and distract the slumbering masses from the real serious problems.

The most important lesson is the need for geographic diversification. This kind of thing happens all the time and it could affect you or your assets. You shouldn’t keep all your assets in one place. You should get a second passport. You also need to keep your finger on the pulse and follow serious news sources that cover geopolitical matters. Stratfor is good, or for quick reading check out Sovereign Man.

Lots of Americans are buying land in Argentina at the moment. Now I’m not saying the following is likely, but neither is it so far-fetched…. What if a new Falklands War breaks out and the US steps in on the British side? How will the US and Britain being at war with Argentina affect investments, freedom to travel, and most importantly security of those expats?

“What if” is something people need to be asking themselves a lot these days. We live in a very unstable world. There is no 100% security. Little, insignificant disputes between politicians can spill over into making life hell for ordinary people. And then there are the relationships between China, the USA, and Russia…

In real estate, people talk about the three factors: location, location, and location. In offshore and asset protection planning, I talk about the same three factors. Diversification, diversification and diversification. Never keep all your assets in the same place, the same currencies or the same asset form.

Things change fast. Back in 1989, Miami was a safe place for Latin Americans to keep money. Now it isn’t. Panama has taken over that role and is stable.

Once again, the lesson is: be prepared. There is no 100% security anywhere. If you and your assets are mobile and ready with flags of convenience like offshore IBCs/corporations, foreign multi currency bank accounts, and second passports, you will be safer if severe crisis hits. And be sure to subscribe to Q Wealth Report where we write about such matters and – even more importantly – solutions, detailed plans and strategies. If you are not yet a subscriber and want to see the package of benefits you are missing out on, click here.

by Peter Macfarlane

In response to some feedback received from readers over the last few weeks, I wanted to clarify what I mean when I talk about taxation on worldwide income.

I’ve often written that the United States is the only country that taxes its citizens on their worldwide income, by virtue of their citizenship. Then people write to me saying “Canada does too” or “New Zealand now taxes citizens on their worldwide income too” to quote a couple of examples.

The fact is that most developed countries tax residents on their worldwide income. That means that for example a Canadian living in Canada, or a New Zealander living in New Zealand, is indeed subject to taxation on worldwide income.

The big difference is that a Canadian living outside Canada (a Canadian expat)  is no longer subject to Canadian taxes on income from other parts of the world. To give you a practical example, a Canadian who escapes the frozen north to live in tropical Belize under the Belize Qualified Retired persons program and invests his money through a Panama Foundation, brokerage and bank accounts in Panama, will not be subject to Canadian taxes any more. The same applies even if he runs an active business somewhere outside Belize – he could be in consulting, e-commerce or a host of other businesses that don’t require his physical presence.

In this example, our Canadian will be in the enviable position of having avoided almost all taxes completely legally at a stroke. As a non-resident of Canada, he is no longer subject to the claws of Revenue Canada. Belize only taxes local income, while Panama does not tax non-resident investments. As such, our Canadian doesn’t have to pay any taxes. He doesn’t even have to go to the hassle of filing tax returns.

The same applies to Brits and other Europeans, to Aussies, to Kiwis… in fact to absolutely anyone who is not a US citizen or green card holder. These people do not have to pay tax on their worldwide income to the countries from which they hold passports, provided they don’t live there. To avoid tax legally, all they have to do is move to one of the many countries in the world that either has no taxes (like Andorra or Monaco) or that does not tax even residents on worldwide income (for example Belize, Panama, Dominican Republic, Singapore, certain cantons of Switzerland…)

This situation is only fair I think. If you don’t live in a country, why should you be expected to pay for it? The US government, however, doesn’t share my opinion. They think that if you hold a US passport, you should pay up no matter what.

So if in our example above, the retiree was American rather than Canadian, he would still be taxable on his worldwide income. Poor American.

There is of course one legal way that Americans can, again at a stroke, avoid this worldwide tax obligation. That is by giving up US citizenship. Although this may seem like a drastic action to some, it’s a course of action that more and more wealthy Americans are taking each year. And in fact it’s a relatively straightforward procedure. It used to be free, but US consultates have recently introduced a $450 charge for handling the paperwork.

US citizens who do decide the renounce citizenship have two other important considerations:

• Before you can give up US citizenship, you must acquire a foreign citizenship, otherwise you would be left stateless, like a refugee who is unable to travel. Acquiring a second foreign passport, however, is relatively simple. For details click here:  How to Acquire a Second Passport Legally
• You must also take into consideration the so-called ‘departure tax’ instituted by Congress in 2008. In our view, this exit tax is more bark than bite. However it’s definitely an indication of things to come.

In my view, therefore, any US citizens who have a reasonable amount of disposable assets – or those who believe they can acquire wealth faster by working in an offshore, tax-free environment – should seriously consider expatriation. The grass often is greener on the other side. And even this loophole is likely to be tightened sooner, rather than later. Acquiring a second passport in a hurry via en economic citizenship program is many, many times more expensive than acquiring one over a few years via a residence program.

If you would like to know more about this topic, sign up now for our free five-part ‘Secrets of the Super Rich’ course now. Say no to unjust taxation on worldwide income!

by Peter Macfarlane for The Q Wealth Report

A number of readers have recently been asking me recently about the ‘Perpetual Traveler’ or ‘Permanent Tourist’ theories. The idea behind these theories is that smart, freedom-seeking individuals should not be bound in their allegiances to just one government. But do these theories have a practical application in real life?  In other words, do they work?

There also seems to be some confusion about the number of flags: The ‘Three Flags Theory’ of Harry Schultz, the ‘Five Flags Theory’ of the W.G. Hill series, publicized last year by Neil Strauss in his bestselling book Emergency… or the ‘Six Flags Theory’ of Bye Bye Big Brother?

What useful purpose does a government serve? Most people accept the institution of government because it has always been there; they have always assumed it was essential. People do not question its existence, much less its right to exist.

The various flags theories are all about achieving freedom by not having one single government controlling you. Most countries treat foreigners far better than their own citizens. So the idea is to be a foreigner wherever you go – hence the ‘Permanent Tourist’ tag. You also achieve privacy, because no government will have access to the full picture of you.

In general ‘PTs’ can, by moving between countries on a regular basis, legally reduce or eliminate their tax burden. Many, however, adopt this lifestyle primarily for self-ownership or freedom reasons – checking out of “The System”.

Either goal is achieved by simply using different governments, or flags, for different parts of your life. At its simplest, the theory works well with three flags:

• Have your citizenship somewhere that does not tax income earned outside the country.

• Have your businesses and speculations in stable, low or no tax countries – your business havens.

• Live as a tourist in countries where what you esteem is valued, not outlawed. These countries are known as Playgrounds.

Back in the 1980s, author Dr W.G. Hill and the Scope International publishing house produced a series of books such as The Passport Report, PT1, PT2 and Banking in Silence in which the original three flags were increased to five flags, by adding an additional ‘asset haven’ – a money management or offshore banking center, independent of the business flag – and a ‘residence’ flag in a tax haven where you have official residence.

Note that this is a paper or ‘official’ residence and is not necessarily where you physically spend your time. I wrote recently about residence and citizenship in the Dominican Republic for example – it’s ideal for this purpose, since you are allowed to be gone for up to a year at a time and still qualify as a resident.

Finally, in 2005, an anonymous author under the name of Grandpa wrote a new three volume update named Bye Bye Big Brother. In this, he added the sixth flag of cyberspace – a kind of virtual country which binds the other five flags together.

If your interested, check out our Critique of the PT Five Flags Theory which explains this in more depth. There’s also more information on the Survival Podcast forum.

Anyhow, having cleared up the confusion about the number of flags, the big question is, does it actually work?

It certainly does. Not only do I live this lifestyle myself, but I know plenty of other people who do too. However, I don’t know anyone who follows the rules absolutely. I think this was a set of rules made up for people who don’t like rules! Most people tend to interpret it in their own ways, picking and choosing the bits they like best.

When people first hear of the PT theory, they think it sounds difficult, complicated or expensive. It’s not.

Most people don’t decide to become PTs overnight. Think of it as a gradual process – little by little, you might open a bank account offshore (asset haven), buy real estate or spend time overseas (the playground) and expand your business by diversifying internationally (business haven.) Apply for a residence in a tax haven that can lead to a second passport, use the internet (sixth flag – cyberspace) and before you know it you are a fully fledged PT.

So this is certainly an interesting theory to bear in mind. If you would like to learn more about it, browse the Q Wealth website, and why not sign up for our free five part course ‘Secrets of the Super Rich’ which covers these ideas in more depth? There is no obligation, no spam, and you a free to unsubscribe at any time…

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.

The ‘underwear bomber’ incident on Christmas Day on the NWA flight landing in Detroit should serve as a wake-up call for us all.  All the security measures put in place by governments supposedly to protect us against terrorists are not working. The government’s knee-jerk response is to increase security checks. Both these facts are of serious concern to our security, privacy and freedom. Allow us to explain…

Here at Q Wealth our intention is to bring you the common sense analysis behind the headlines. We base this analysis on our extensive experience and our good friends in both the ‘civil liberties’ and ‘intelligence’ communities. Bearing in mind that few facts of the case are known as yet and we are relying on TV reports for our information, here is our initial analysis – first of the actual event, then of the consequences. Warning: It is scary stuff.

First the good news: no-one was badly hurt. The underwear bomber burned his butt. Initial reports suggest he did not have a bomb, but rather some powder sewn into his underwear that he tried to inject with a liquid to cause a fire. Fortunately aircraft interiors are designed to be flame resistant, cabin crew are suitably trained and equipped with fire extinguishers, and one brave passenger physically restrained the terrorist. These three basic, sensible precautions saved the passengers and crew on that flight and the people on the ground below.

Whatever one may think of multi-billion dollar global spying operations and intrusive airport security measures, if they worked it would at least be a strong argument in favor of them. But this incident shows they do not work. The suspect’s father, a prominent banker, had taken the extraordinary step of reporting his suspicions about his son to the US embassy. The UK had refused to renew the suspect’s student visa because of his apparent terrorist connections. Yet here he was in possession of a valid US visa, travelling in his own name, allowed on board a flight to the US.

Airport security in Amsterdam, where the suspect boarded, is as ‘good’ as anywhere else. This writer passed through one of the new full body scanners there nearly a year ago. These are the super-duper new machines that are due to be rolled out over the USA next year. On my particular flight, the business class passengers were being checked by the new machine, while economy class passengers were being checked using the older method.

Nobody informed us what the machine was so I guess the majority of business class passengers had no idea they were having these photos taken. But a properly trained terrorist, especially one with a mechanic engineering degree like this one, who had something sewn into his underwear would surely have recognized the machine and snuck into the other line.

We are civil libertarians but we certainly recognize the need for airport security. The normal airport security that was in place in Europe (but not the US) in 2001 did not particularly bother passengers. It involved a quick scan of the hand-luggage and passing through a metal detector, as well as routine scanning of all checked baggage – measures which would very likely have prevented the 9/11 hijackers. I can also see the logic behind separating laptops at the scanner.

But none of the rules introduced since (restrictions on liquid, taking shoes off etc) make any sense. Does anyone think for a moment that a terrorist is incapable of forging a prescription from a Nigerian doctor that would allow him to take a syringe and more liquid that normal on board a plane? Depriving us of blankets and pillows or restricting hand luggage is just about inconveniencing passengers for absolutely zero security benefit.

Frankly, there is nothing more we can do in terms of physical airport security. It is impossible to introduce a fool-proof system. If a person is smart and determined enough they will be able to carry dangerous items past poorly-paid security guards – people who are taught to function like robots by reacting to whatever the latest threat is and, especially in the USA, to using scare tactics to bully passengers. And while the west wages war in other parts of the world, there will always be those smart and determined people.

Then another personal gripe of mine. More pressure on the use of cash payments for airline tickets. Last night US media were making a big deal of the fact that this guy paid cash for his ticket in Nigeria. All the ‘experts’ claim this is a warning sign of potential terrorist activity. I hope the people who are really in charge, rather than the so-called experts on TV, aren’t so stupid. I took the liberty of checking out the State Department’s website and here is what they say about use of credit cards in Nigeria:

The Nigerian currency, the naira, is non-convertible.  U.S. dollars are widely accepted.  Nigeria is a cash economy, and it is usually necessary to carry sufficient currency to cover the expenses of a planned visit, which makes travelers an attractive target for criminals.  Credit cards are rarely accepted beyond a few upscale hotels.  Due to credit card fraud in Nigeria and by cohorts in the United States, credit card use should be considered carefully.  While Citibank cashes some traveler’s checks, most other banks do not.  American Express does not have offices in Nigeria; however, Thomas Cook does.  Inter-bank transfers are often difficult to accomplish, though money transfer services such as Western Union are available.

So any airline flying from Nigeria had better accept cash payments……

But this is not an article about airport security. Travelling is a hassle these days but lack of pillows is a minor annoyance in the greater scheme of things.

Think for a moment about what would have happened if this attack had succeeded. The indirect consequences could be much worse than the direct ones. Think back to September 11th, 2001. Only this time imagine it worse. A lockdown of the USA. Borders could be sealed. Banks could be closed (Google the ‘bank holiday’ conspiracy theories…) and ATMs switched off. Assets could be appropriated by the government, as is common in times of war. Telecommunications and the internet could stop working. Martial law could be imposed. Events could easily get out of hand – causing blood in the streets, figuratively if not literally.

Similar things could easily happen elsewhere too. In the UK, for example, it is well known that the military have an emergency plan to seal off the whole of Greater London.

As smart individuals we need to make sure we are properly prepared for such catastrophes. Unfortunately, I think the probability of a successful major terrorist attack within the next few years is high, and it is more than likely to target the financial system. This would in many ways be awfully convenient for the powers that be, too – since then they would have somebody else to blame for a total collapse of the financial system that is happening already (see the related post links below to read about the decline in the value of the US dollar or ‘dollar devaluation‘)

I certainly hope I am wrong, and I am by no means saying that all the above things are going to happen. But I consider it would be smart to be prepared. It’s clearly better to have contingency plans in place and never have to use them, than the other way around.

So let’s treat this incident as a wake up call. We all get lazy. We all get stuck in our routines as soon as we feel a little bit comfortable and secure. But it should be a serious New Year’s resolution to put into place strong strategies to protect not just your assets but yourself. Don’t put it off. Do it now before it’s too late!

What do I mean? Different people have different necessities. But here are some of the basics:

• Physical gold and silver: The majority should be stored outside your home country, but you need some at home. Silver coins are better to barter for things like food. Both silver and gold are great investments. But if trading on the markets is suspended then all your ETFs, mining stocks, Perth Mint Certificates and the like will be worthless, at least in the short term. You need a proportion of your portfolio in physical metals. More on Buying Physical Gold Bullion Offshore here.

• Second residencies and passports: Again, it’s all about diversifying risk. Identifying yourself and your family as citizens of a neutral country may just come in very handy one day. Mobility is essential for your security. In the meantime, having legal residence (the papers) and/or a bolt hole (physical property) in a secure jurisdiction like a tax haven, well away from potential problems, is also reassuring. Rather than being forced to flee to an unknown place, you can just step comfortably in to a new life you have waiting for you. And the legal residence can lead to a second passport by naturalization after a few short years. More on Second Passports and Residencies here.

• Offshore Banking: Something as simple as opening a multi currency bank account outside your home jurisdiction can reduce and spread risk. Hold funds in various currencies and financial instruments. Any prudent investor should have international and foreign currency holdings and a multi currency account is a good starting point. For greater security and personal privacy consider the use of a Panama Foundation or Corporation. More on Offshore Banking matters here.

• Alternative Incomes: What would you do if you had to abandon your business tomorrow and leave the country? You should have not just assets in place overseas, but also a secure income stream from some sort of business you can run internationally. More on Offshore Wealth Creation here.

• Understand and Use Privacy Technology: Secure your internet communications. And, though this is certainly more difficult, think about what you would do if you didn’t have access to the internet. I don’t believe the whole internet will collapse, but parts of it certainly could. More on Privacy Technology in our new Secure Computing report, available in the members area.

There are lots more contingency plans you might need to put in place, depending on your family, your business, and your personal situation. For this reason we offer a free e-mail consultation to all paid-up Q Wealth members (obviously in our own time, it can take a few weeks for your reply) and we encourage you to attend our events where such contingency plans are discussed.

The first and most important step, if you like this article and haven’t already done so, is to sign up for our free Q Bytes newsletter to benefit from free weekly tips on major themes like offshore banking, asset protection, personal security, precious metals, and offshore wealth creation.

“Many of our clients at BFI are very wealthy,” writes our Swiss Mountain Guide friend and Swiss Gold Storage expert Frank Suess in his latest newsletter. “They spend much time on wealth planning; in other words, on how to protect and grow their wealth. However, they generally do not consider how to protect themselves in the current environment. While protecting your wealth, you should not forget how to protect YOU. Things might not seem so bad in everyday life. Your daily routine is not affected by the bigger changes occurring around you. Therefore, it all does not seem that threatening. They never do.”

Have you defined a contingency plan, an escape route for you and your loved ones, in case leaving your country becomes an unwelcome necessity? If not, we recommend you at least start considering this line of thought. I myself (Peter) was just talking about this very topic yesterday with one of my personal consulting clients. It is obviously a sensitive topic, something not everybody has the guts to face up to. But an important one, nonetheless.

Do you have in place an escape route like a second passport (for example an economic citizenship) or at least a legal residence in a far-off, neutral country where you and your family could ride out the storm?

Certainly having contingency plans in place could make you sleep better at night. The best laid contingency plans are the ones you hope you never have to use!

This is a theme we will be developing more early in 2010 here at the Q Wealth Report, as well as at our forthcoming Q Wealth ‘Strategies for Success’ event in Cancun, Mexico in March. If you are interested in joining us, please contact Frederick in our office for details.

More offshore protection news soon…

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!