How to value a second passport?

2017. November 11.

It is important to talk about how to value second passport and why – when it comes to examining which citizenship could be the best for you – we truly believe that there is a lack of information and also a lack of depth in the information (no detailed and comprehensive description what we have found) that is out there. To make it clear what we want so let’s try to evaluate what a citizenship or a passport is actually worth.

What is the difference between citizenship vs. second passport?

Evidently, there is a difference between these two things, and many times this is blurred by the media. So, just to make it clear:

  • Citizenship is something that you have by being a citizen of a country
  • A passport is a travel document that you can have by being a citizenship of that country

What is crucial to understand is that to have a passport you must be a citizen of the country.

And here is the thing, there is a huge difference between having a passport and being a citizenship of a country.

Each year, dozen of people in the passport sales industry publish their own index with thew following title: “The best password in the world”. And everything is just based on the number of country where you can travel with that specific passport. Let me explain this a bit more. United Kingdom’s passport allows you to travel visa-free to 173 countries, but does not matter which country it is, media makes a big hype around it and everybody thinks that this is a Holy Grail. And suddenly UK’s citizenship is the best ever to have.

This is quite misleading and let me tell you why.

Visa-free travel

These rankings are based on the highest number of visa-free travel options. This is the most basic indicator and easiest way to put countries in a kind of order. But if you look at the list precisely the first 20 countries give you almost the same opportunities to travel visa-free. Does it matter whether you are allowed to travel to 173 different countries versus 168 countries? Not really. There is only minor differences on this list where you can travel. Just to mention some countries from top 20: Finland, Germany, Norway, US, Canada, Australia, Spain and so on. As you can see there is not much difference of being a citizen of Canada or Spain. Does the US passport offer so much more than a Finnish one?

Upon looking at getting a second passport, you need to consider more than just where it allows you to go with the passport for visa-free travel.

How can you value a second passport?

We at Europreneurs think that the most important to figure out  is which citizenship can be the best for you, especially when it comes to gain the most from your second passport.

We have got a lot of people who asked “How can I get the most from a second passport? Which one would be the best for me if I need a back up, a plan B that can give me independence from my government?” Let’s explain this a bit more detailed: If you are a U.S. citizen then you don’t need to worry about the number of visa-free travel countries. Most probably you cannot have better passport to be able to travel as many countries as possible. So you don’t need a EU member’s country’s passport but you would consider to have for instance an UAE’s passport (United Arab Emirates).

But you can immediately ask: Why? Well, being a U.S. citizenship you have to pay tax on your worldwide income, you also have to file FBARs, and subject to other regulations on U.S. citizens abroad such as FCPA.

What if you have the above mentioned UAE residency and free zone company? There is no need to worry about those papers and paying tax anymore. All these benefits come with an Ajman Free Zone company (or any other UAE Free Zones company) that can be established in a week.

Just to mention some of them:

  • No personal income tax
  • 100% foreign ownership
  • No exchange control restrictions.
  • 100% repatriation of capital and profits
  • No corporate tax

More detailed explanation can be found here.

But let’s get back to how to value a second passport. Now, you most probably can see the mindset behind the concept. Many times the additional benefits of a second passport  are much more important than the number of visa-free travel countries. I would say that almost anytime: having a B or B+ passport allows you to enjoy financial benefits rather than just add to some other countries where to travel visa-free to.

It is a different story if you are not citizen of US, Canada, Australia or EU member country and you would like to get into some of these countries. This case is explained in this article: How to get a EU members second passport?

And we have arrived to another important factor:

Does second passport allow you to have dual citizenship?

It matters a lot and many of us do not think about it at first time. Just a quick example what we mean by this.

My sister had the opportunity to have either an Austrian or a UK passport as a second one. But when she got to know that important information: Austrian citizen can only have 1 passport, she was disappointed. Whether it is worth to lose her current passport and also not to have the British one, just to be able to have the Austrian one?

The answer was definitely: nope, having 2 passports is usually better than having one. For example Lithuania, Austria or Singapore offer very high-ranking citizenship, however the fact that they limit dual citizenship devaluate them. So we would much rather have a little bit “lower-quality” passport than one from countries that just have excellent visa-free travel, because always keep in mind: we want the ability to have dual citizenship.

This is the way how everyone should think when it comes to second passport.

Summary: The best second passport that fits to you, should offer much more than just visa-free travel.