It was a wake-up call for the people of the world when the government of Cyprus seized the savings in its banks in order to avert a financial collapse caused by mismanagement of its economy by politicians. Some people appear to have lost more than 28% of their savings and others lost everything. Who are the ones made to pay for the mistakes of the politicians and bankers? They are mostly ordinary people saving for retirement and the future of their families.
Not long afterwards, the IMF virtually declared Spain to be bankrupt. With an unemployment rate over 25% at the time, the fastest growing debt of any developed country and committed to using the Euro, it could not independently devalue its currency, but may have to take measures not acceptable to its citizens. Virtually all EU countries are in the same boat. The US is similarly bankrupt and when the emerging trend of bypassing the US dollar as the medium of exchange for international business becomes more widespread, the US will not be able to repay its debt of over $18 trillion.
China has already completed such arrangements with Australia, India and Iran and in association with a number of countries has formed two banks that will compete with the International Monetary Fund (IMF) and the World Bank.. The status of having a world reserve currency has allowed Americans to live beyond their means for decades, for the government to borrow unscrupulously to finance its wars and handouts, to dictate terms for international trade and to cut off from international finance anyone it does not wish to include in dollar denominated business. When the US dollar ceases to be the world reserve currency, it may be forced to take the same emergency measures confronting other developed countries, namely
- call a bank holiday (to prevent flight of capital)
- confiscate the savings of citizens
- institute capital controls
The time to internationalize your assets and secure a new country of residence is before any of these things happens.
Perhaps the safest way to begin to internationalize your assets is to invest in real estate in one or more countries other than your country of residence. It has the advantage of appreciating in value without a taxable event until the property is sold, if it ever is sold. It can serve as a vehicle for passing on wealth to succeeding generations. Another way is to have some of your wealth in private, but liquid vehicles that can be used for doing business anonymously. Your international wealth can be held in the names of international business companies, trusts, limited liability companies, foundations, hybrids and various other structures. It is the ideal way to diversify internationally.
We cannot over emphasize the necessity of paying all taxes that are legitimately due, unless you wish to enjoy your wealth in the seclusion of a small cell with metal bars and no windows.
With multiple citizenships and passports, it is easier to do global tax planning. It can increase your mobility. You can travel to a country with one passport and travel on to another with another passport. Your passport is like an ID. In today’s world, it is extremely difficult to do any serious business without one. You certainly cannot travel from one country to another without one. You may not appreciate the importance of this unless and until you have been required by the immigration authorities of a country to bring in your passport and it is held until you cough up money that goes to line the pockets of corrupt officials. Such an action is tantamount to placing you under house arrest until you yield to the extortion.
The easiest way to get a second citizenship and passport is to investigate the possibility of getting this if your parent was born in a different country whose laws permit you to secure citizenship. It is also possible to obtain such a privilege through marriage. However, if securing a second citizenship and passport is the only reason for getting married, you may be in violation of the law of the country. You must have a job or be financially stable and contribute to the society of the new domicile.
You should take a good look at the new alternative residence and ensure that the quality of life is up to your standards, that the laws will give you adequate protection and that you will be happy there. You should ensure that you are not abandoning your current citizenship for Permanent Residency in another country where the document does not permit you to travel.
You should never pay any money as bribes to any facilitator or permit any expeditor to do so in order to obtain a second passport as you would then be chargeable for fraud and your citizenship and/or passport can be revoked. You could then be classified as an international crook and can go to jail and lose money and reputation.