Naturalization: The Best Route to a Second Passport

I’ve spent quite a bit of time working on my presentations for next month's Ultimate Go Overseas Bootcamp in Denver. As Chief of Global Diversification at International Living, my focus will be on opportunities to gain the most secure forms of residency in foreign countries, including second passports.

As I worked through materials on the various routes to second citizenship, it struck me that the most practical route for most people is the way I got mine—naturalization.

As a reminder, there are three basic ways to get a second citizenship:

• You can qualify for one as an ancestor of a citizen of a foreign country.

• You can buy one, via a Citizenship by Investment (CIB) program.

• You can qualify for long-term residency in a country and stay long enough to qualify for citizenship by naturalization.

As I said, the third route is how I became a citizen of South Africa.

In the mid-1980s, as a young man looking for adventure, I went to Cape Town. I quickly fell in love with this glorious city at the southern tip of Africa. To extend my stay, I applied for admission at the University of Cape Town. After five years on a student visa, during my master’s degree, I applied for permanent residency. Two years after that I applied to become a naturalized citizen. In total, it had taken me seven years of legal residency.

Seven years is fairly long as naturalization goes these days. Here's a table showing the number of countries that give you a faster route to a second passport than I had:

Of course, citizenship by descent and investment are usually quicker than naturalization. But those routes aren't for everyone.

Citizenship by descent only applies to certain people. The media likes to throw out sound bites like the fact that up to 40% of the U.S. population is potentially eligible for this, but the vast majority of those are the children or grandchildren of recent immigrants from places like India and Mexico. For everyone else, especially people of European descent, you're limited to three or four generations from your ancestors. And only Ireland and Italy offer route that's relatively easy to navigate.

Citizenship by investment is available to anybody with enough money, but the price is rising. As I reported a couple of weeks ago, under pressure from the UK and the European Union, the Caribbean island nations that offer this are all doubling their minimum investments in order to keep visa free access to those regions. The only CIB program in the EU, Malta, requires millions and many bureaucratic hoops.

In fact, citizenship by naturalization can actually save you money. CIB involves a big upfront expenditure. Citizenship by ancestry usually requires the help of specialized attorneys and consultants. But during the years your waiting for citizenship by naturalization, you'll almost certainly be spending far less on accommodation, healthcare, and general living expenses than you would be in the U.S. And if you're still working and can do it from abroad, you'll qualify for the Foreign Earned Income Exclusion, which exempts you from U.S. income tax on up to $240,000 of income.

If citizenship by descent or investment is the best route for someone, I'll always tell them so and point them to the resources they need to do that. But in many cases, the best way to get a second passport is to find a place that you love, settle there, and do your time.

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