Warren: Offshore Sovereignty series. And continued on. Once again, I have with me Stephen. And, Stephen, welcome to our call again.
Stephen: Welcome, Warren. Welcome, listeners. It’s good to be here. And it’s a glorious day here in the office in Hong Kong.
Warren: Oh, wow! What’s the weather like? Good?
Stephen: Yeah. It’s coming out of winter. It’s a lovely 20-21 degrees. Probably peaking at 24 today. So, we’re looking forward – I’m forward to the summer. I’ll put it that way. I’m not a winter person.
Warren: Yeah. No, I can imagine. I have actually got a girlfriend who’s from Philippines. And if it gets anything below about 21 degrees, she’s walking around wearing a rug.
Stephen: Oh, exactly. Everything about 20 it’s a bit cold. And I’m looking for air tickets into lovely warm places.
Warren: Yeah. It’s very funny. We’re in the Gold Coast on the weekend just been and it was very humid and hot. And I’m like, “Oh, God, this is hot.” She’s walking around with a huge smile on her face, “Oh, it feels like home,” and I’m like, “Yeah, okay.” Yeah.
So, talking about this and sovereign citizenships and continuing on today, I know we’re going to be talking about second citizenships and second passports and what’s involved in that. So, certainly a topic I know you’re very passionate about, Steve.
Stephen: Love it. Love it. It’s one of the things that everyone should have and it’s definitely something that everyone should look to obtaining is second citizenship. It’s the best [0:01:34], best options card that you could ever have.
Warren: So, why do you say that? Because I mean, you know, I’m a normal Australian, say, someone’s a normal American, I mean, why would they need a second citizenship unless they’re planning to move overseas, is there any reason?
Stephen: Well, just take the, sorry, where a client of mine on the weekend. He went to fly to Singapore from Hong Kong here on his Australian passport. And it was under six months until its expiry. And the airline wouldn’t let him fly. They’ve got a rule that sorry if your passport doesn’t have at least six months validity in it. He couldn’t fly. But because he luckily had a second passport, he was able to redo his bookings under his second passport, under his UK passport. And then the airline said, “Yeah. Fine. You can fly under that passport.” And, so, it’s just little things like that. It gives you the ability to move.
Now, the other thing is if, for some reasons, your country of origin might not be one of the best countries in the world. Say, you come from a place that is a bit more restrictive on certain aspects of trade or you’re interfering or is one of the countries that interferes a lot through the UN or the World Trade Organization, having a second passport that is outside that will allow you then to interface with certain countries.
I’ve got clients that do a lot of trade with countries like Iran, Kurdistan, Azerbaijan, Turkmenistan – all these countries that are 100% legal countries to do trade with, but because places like America or the UK and all that – those sort of countries restrict dealing with these nations or dealing with certain places in the world, Ukraine at the moment. There’s a lot of people that used to deal a lot of business in Ukraine, especially in the commodities world.
Then, all of a sudden as soon as the U.S. slapped sanctions on, their entire businesses fell apart. But because they had second citizenships or citizenships and links with countries that weren’t part of the sanctions, their businesses could continue.
Warren: Okay. That’s excellent. That’s really good. That makes sense.
Stephen: Yeah, if you’re put on a no-fly list on one passport, you got a second passport, you can still travel around the world.
Warren: That’s actually a good point. So, go on, go on.
Stephen: There’s also strategies around you travel on one passport, you bank on one passport, then, you have one passport up your sleeve for Plan B emergencies. There’s all – depending on how far you want to take it, there’s all different ways of structuring why you have second citizenships.
My thing for me is why would you restrict yourself to one? We live in a world where governments are trying to stop the movement of people. They’re trying to restrict the movement of people, especially people with money or people with means to generate money. People connections, they are really trying to tie them down and stop these people moving.
So, if you’ve got second passport or you have got two or three passports up your sleeve, which is basically a passport is a citizenship. We must sort of clarify that with the listeners is that to get a passport, you have to be able to be a citizen. You can’t just get a passport of a country and not take up their citizenship. There are certain things that you also need to look around. Things about does the country you’re looking at having a citizenship with allow dual citizenship. Does your parents’ country allow dual citizenship? And rules like that.
Warren: Right. Now, you got me really thinking there. So, really, basically with having a citizenships, it’s and a passport, it’s about having options because, yeah, I’m fully aware like the Western governments have gone federal in many legitimate countries like or wherever, I’ve just been [0:05:48] in and they decide that they must be a terrorist country just because you’ve got a few bad people there who’ve done a few bad things.
So, really, it’s getting back to the fact like, hey, I’m wanting my freedom, I’m wanting my sovereignty. And even not just that. About privacy as well. Because like you were saying, you can have one passport for one from another. And to me, governments had to assume that being private means doing something illegal where to me, it’s just like, you know, I’ve got like I don’t go around showing even my underpants in withdrawal. Like, you know, my girlfriend might see them, but I’m not just going to go and, you know, put them on Facebook on the Internet and get pictures and let people see what I wear like, you know, in an area.
So, that’s just the privacy. But if somebody happens to find out, well, so what? I don’t really care if someone happens to break into my house never look. I care about they broke into my house but I don’t really care about the other thing. But that’s probably like what it is, isn’t it, really?
Stephen: It is exactly. And it’s a legal way of separating your assets. You can put assets under different citizenships and that sort of stuff as well. There is a lot of – one of the things you have to be wary off is that I tell all my clients if you’ve got multiple – that have multiple passports, only newly ever travel on one, only bank on one, so, sort of split up why you have passports and split up their uses. And use passports the same way as you would use asset protection strategies or wealth creation strategies around companies.
Warren: Yeah. Got you. So just share a little bit more about that one. So how does that strategy work? So, like, give me an example of a case study scenario like how could that work for someone like, say, you or businessman or someone like me who happens to now go and live and base myself in Panama or Singapore or Hong Kong or somewhere. Like how could I use that strategy but equal terms?
Stephen: Yeah, okay. So, if you do get in, say, you’ve got an Australian who does a lot of his travel and everything and has started venturing out into [work on 0:07:50] his Australian passport. So, countries around the world are used to seeing this guy’s biometric face and his fingerprints and all that sort of stuff attached to the Australian passport. A lot of Australians are multicultural but so they will have the second passport.
So, what you could do is you could start your banking under your second passport. So, you could set up your Hong Kong entity under, say, your UK passport and then you open your bank accounts under that UK passport. So, you’re traveling as a traveling businessman as an Australian but your entities and that are associated with your UK passport. And that as for your proof of identity. So, it’s still you. It’s still 100% legal in you. You were just using your second citizenship to an advantage to create a non-aligning sort of free-for-all open view.
And that goes – this is more not for governments because you’ve got a whole heap of databases out there that people can access and that I’ll just check up on you. You know, check up, you know, is this guy banned direct or is this guy whatever and this and the other.
And if they look under your passport number, you know, they might have found that from your travel documents or whatever and they have a look, bang, bang, bang, oh, there’s nothing under that, okay. There’s no travel bans, there’s no nothing associated with that. But you know that’s because they don’t know of the second citizenship.
Warren: I know what you mean. It’s very similar to like I can remember a few years ago. I’d run out of demerit points on my license or whatever else. Actually, not quite. I think I was like 10 points I was 2 away. And then I got pulled over in – that was in West Australia where I live and I happen to be in Queensland and got a 2-point fine over there. Because that doesn’t show over here and it’s a completely different system, it just never showed up. So, I never end up running out of demerit points, I mean, to lose my license to be on the 12-month double or nothing.
Stephen: Yeah, so there’s the whole thing. But what the basics of getting passports, there’s really – there’s a lot of myth out there around second passports and how to get them and that they’re illegal and that, you know, you can’t do this and you can’t do that.
I talk to people all the time. I’ve got friends of mine that have got six, seven passports. There’s one friend of mine says he collects passports and citizenships rather than Ferraris or Porsches. It can be around the same cost.
But, you’re basically, the three ways you’re getting passports are buy them. There’s economic citizenship programs out there. Descendants, so looking at your history where your parents were born, where you might have even been born. You might have been born in a place and come out on your mother’s passport to, say, Australia. And then you’ve never had the passport or have never registered citizenship in where you were born. So, there’s all those options.
And the other option is naturalization is moving somewhere going through the whole process of getting your passport over time. So becoming a permanent resident. Having strong connections with the country, and then qualifying for the thing.
There is a fourth avenue which is one [Peter Field 0:11:12] used in New Zealand. You might have heard about it in the news. And that’s what’s called Special Economic Citizenship. So that’s their citizenship’s given to normally billionaires and very high net worth individuals or sporting stars. Australia does it with sporting stars. America does it with sporting stars. Most of the countries do.
So, if you’re a great sporting star and you can win gold medals for the country, the country obviously will offer you citizenship to come and try and be an Australian for the purposes of that sport. Peter Field got his for investment and who he could bring to New Zealand.
There’s other people in the world that have been granted citizenships because of the great work to the nation or support for that nation. So, they’re basically the –
Warren: So what are the four ways?
Stephen: So the four, if you take the four ways, the first is by – through an economic citizenship program. The second one is descendancy. Look through your history. The third one is the special economic one that I mentioned. So, it’s you’re granted the passport purely and simply because of who you can bring in and why the country would want you, so it’s granted by government. And the fourth one is naturalization is the long process of immigrating to a country becoming a permanent resident, meeting all the criteria to get your citizenships.
Some places are seven, ten years. Other places, three/four years, depending on how much you’ve only gone.
Warren: Perfect. So four things. Let’s go through each. The first two especially on a quick recover. So, buy it, so give me maybe run through some examples of how you can actually buy it like simple ways you can buy – give us some examples of good countries that you can go to to buy second citizenship.
Stephen: Okay. There’s quite a few buy-it nations out there now. You’ve got St. Kitts and Nevis. And [Antigua and Barbuda 0:13:07], Dominica, Malta has a program which is basically a Rolls Royce-style program. There’s a few other nations out there that are all coming out.
There’s a lot of these smaller Caribbean Island nations and not-so-small nations like Malta, that are starting these programs now where for a set figure. So if it’s in Dominica, it’s about USD$100,000. It’s literally you give $100,000 to, say, a development fund. And for that, from a three-to-six-month process, they’ll issue a passport. St. Lucia has one as well. St. Kitts and Nevis is about $250,000 that goes into a development fund or you purchase property of about $400,000. And they could got a hold over a period.
I find personally that the development programs are better than the property ones because what you normally find is, okay, it’s $200,000 into the development fund, say. But then the average property price is only $180,000 to $200,000 anyway. So, for the same amount of money, you can still buy property but you don’t have the full restrictions by going through the property fund. And the property route.
If you’re looking at Malta, Malta’s right at the other end. So we’re looking at about €1.7 million to get a Maltese passport. Some of that goes into long-term bonds and other bits and pieces, but basically $1 million of it is what you’re spending to get your passport. It’s a European passport so it’s one of the top passports in the world. So, that’s the buy route.
If you’re looking at the ancestry route, the main thing to do is have a look at who your parents are, have a look at their history, who your grandparents’ history is. You’ve got countries like Italy, Ireland, the UK, Poland, Israel, the list is endless. Hungary, that all – and a lot of these are European nations, by the way, that offer these ancestry passport programs. The UK is probably really one of the best known ones for Australians and followed by Ireland. So, basically if your parents are a UK or Ireland you’re basically guaranteed straight away.
Italy, you can go back several generations but the process can be long. It can take up the 2, 2.5 years and the proof is is pretty hard. You need someone on the ground to do it for you.
Warren: What about Germany, for example?
Stephen: Germany does but it’s very complicated. And I just tend to not look at Germany in their programs. I’d rather look at Hungary or somewhere like that. But then, it looks whatever your ancestry is.
Warren: I’ve got German. I’ve got UK ancestry levels, so a German ancestry. I’ve got quite a lot of German aunts.
Stephen: Okay. And it depends on how far back. So I think, German, if it’s any more than two steps back, you’re probably not going to have a decent claim.
Yeah, with the UK, if it’s one, two or three steps back, you can still, with the right documentation and that the right people representing the you can get it. Rules are changing all the time. And, so, you need to if you are looking at that route, it’s time to act and act now.
Warren: Okay. Great.
Stephen: Yeah. So, there – the other two ones I mentioned costs a lot of money. And I wouldn’t worry about either of those at this stage. The special economic one if you’re a billionaire, you do it all day every day. If you’re married to someone overseas, say, an Australian married someone from Portugal, for instance, yeah, go down the naturalization route, that’s fine and that sort of stuff.
But just to do a naturalization unless you are actually really committed to move in that country, it’s a big time commitment. You are looking at basically five years.
Warren: Yeah. Okay. Same in Philippines because like, you know, my partner’s Filipina.
Stephen: Yeah, the Philippines, Thailand, Vietnam, any of those sort of places are the same. Hong Kong and Singapore have great residency programs, but not necessarily places for passports.
The other thing you’ve got to look out is why if you’re getting a second passport, what use is it to you if it’s from, say, if you got a second passport, you can get it from Nigeria, do you really want that passport? For me, I would probably take it because it opens up the 14/15 nations of West Africa where there’s going to be a hell of a lot of trade done over the next 10 to 15 years. So having this passport in that part of the world would come in handy.
But if that was your only option and you were never ever going to do anything in that part of the world, it may not be worthwhile grabbing. But, yeah, so you need to really look at it, study it and talk to someone who does this on a basis like myself or the other guys out there that can put together a plan and have a look at okay, you’re going from the U.S. to a Nigerian, no, not so good.
But a U.S. to Dominica or U.S. to St. Kitts or you may even have a British ancestry in there or let’s go and have a look at that.
Warren: That’s really good. And for the last couple of questions. One question is on tax-wise, do these help you of tax or not really?
Stephen: Not really because every nation’s going to [0:19:10] tax rules like the UK I would say a lot of Australians had UK second passports and can get second passports. You’re still going to abide by the UK rules.
The one good thing with the UK is if you’re not resident in UK, you’re not going to get tax in your worldwide income. So you still got to play by the rules. So that’s why having a passport and a second passport is good, but you also need to look at your domicile for tax purposes.
And that’s why when I’m doing a lot of stuff for my clients, especially the digital nomad clients is their tax residency is totally separate from where their countries of citizenship are.
Warren: Got you. And what about actually, yeah, so, asset protection as well, I mean, from what you’re telling me, it sounds quite useful to give you some very good protection or privacy for people going after you and things like that.
Stephen: Yeah, it can do because you’re going to separate, as I say, your travel, your general movements. And especially in the kidnapping world. There’s – if you’re a high-end executive that travels a lot, and okay, so you travel – you’re an American and you travel to places that could be high-kidnap risk – Central America a few years back was definitely one. American engineers in the oil and gas industry were high on the risk of kidnapping there. North Africa for oil and gas executives as well.
But if they could enter these countries, and that, say, on a Central American passport, they would be less likely to be seen as a kidnap risk because they’d go through the manifest of an aircraft and go American, American, American, American, okay, they’ve got money, let’s have a look at that.
But they see you’re Costa Rican or they see a St. Kitts and Nevis and I guess automatically dismiss them. So then they won’t go any further. So, yeah, there’s definitely benefits traveling on one passport and doing something else on another one.
Warren: That’s good and last question, Stephen. Look, this has been – this is really good. I’m getting some ideas for myself. In terms of people wanting to get in contact with you, how did you actually do consultations or advice to people or put them in contact with people, how does it work? Are you able to help people with getting second citizenships and passports?
Stephen: Yes. The – yeah. Basically, yes. You can contact me directly I work on an engagement fee basis, I have a set fee for engagements. And then, whatever’s gone on the back of that, I disperse out. So I work as a consultancy. You engage me. We have an initial consult. We go through all the steps. We work out what you want. I’ll give you some recommendations. And then, if you want to pursue those, I then we just charge and then there’s this certain rates and figures.
Warren: Right. Excellent. Well, thank you, Stephen. I appreciate your time and anyone wanting to get in contact or further, just put a request in or send us message and I’ll make sure that we – you can meet Stephen and you can talk to him and get going. Thanks, Stephen.
Stephen: No problem. Happy to talk to anyone. Thanks, Warren.
-End of Podcast-