Tax-planning is by nature an international business with players
from all over the world offering all kinds of ways to reduce ones
tax burden. As such, it is a highly accessible market and as with
all legal business start up costs are low. Not surprisingly there
is also a large number of tax planning firms of dubious character.
The legal service that is most susceptible for fraud is the second
If you google for 'second passport' you are led to
believe obtaining a second passport is a simple procedure and a
quick fix for your tax liability. The majority of websites are
either not showing the whole picture or are straight forward scams.
The truth is that there is no cheap or easy way to obtain a second
passport and it will not absolve you from your tax liabilities. But
there are certainly advantages in having a second passport.
The most common way of obtaining a second passport is by
becoming a citizen of another county and be eligible for a passport
program. Whether it is by marriage with a citizen, an ancestral
link, or being a long term resident, the bottom line is: it takes
time. Few countries in the world have passport programs for people
who are not permanent residents. Citizenship also includes a new
tax liability to replace your old obligations. So while your new
home country might offer a better fiscal climate, it will not set
you tax free.
As we mentioned, there are some countries that do have more
lenient passport programs. It often depends on how much money is
involved. Montenegro for example issues a passport to anybody who
is willing to spend half a million Euros in the country, part of
which would go to the treasury. Then there are countries where
government officials enjoy a high degree of autonomy in passport
application procedures and can overrule certain legal requirements.
Lastly there are some very hospitable countries that have a broad
interpretation of what constitutes political asylum and
Only countries that are flexible in the interpretation of their
laws and have existing passport programs are interesting for those
that wish to obtain a second passport without having to commit to a
new country entirely. Flexible in this context can mean for
instance a lowered minimum investment that is normally required to
qualify for a program, or applying for a retirement visa without
being old enough, or get political asylum for people from
potentially dangerous countries like Russia and China.
To acquire a second passport using these more effective
strategies requires the work of a qualified legal specialist with
the ability to read between the lines of the law without actually
breaking it. The Freemont Group does not offer any second passport
services but we work with many law firms that do.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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As we had reported in early December the Minister of Finance, Harris Georgiades, and the US Ambassador in Cyprus John M. Koenig, signed the Intergovernmental Agreement (IGA) for the purposes of the application of the Foreign Account Tax Compliance Act (FATCA).
The US Foreign Account Tax Compliance Act (FATCA) is in the vanguard of a global movement towards the automatic exchange of information on tax matters.
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