Dual citizenship: benefits and disadvantages of having two and more passports
Holding multiple citizenships provides a person with a number of benefits, such as freedom of travel, the ability to choose the more advanced healthcare system, and wider educational opportunities. However, there are some cons to holding two passports, too.
What is dual citizenship, and how is it different from second citizenship
Dual citizenship and second citizenship are not interchangeable terms. Both of them imply having passports of two different states, but the conditions are not the same.
Dual citizenship means being a citizen of two countries that have entered a bilateral agreement. Both states in that agreement recognise the rights and obligations of dual citizens in the other country.
People with dual citizenship pay taxes and perform military duty in their country of residence. They are protected from double taxation.
Second citizenship implies holding passports of two countries that do not have any agreements on that matter. In this case, each country allows its citizens to hold passports of other states but does not recognise their rights and obligations in relation to those states.
A person with a second passport might have to pay taxes in both countries.
Benefits of holding dual or second citizenship
While dual citizenship gives its holder more freedom in terms of taxes and other obligations, the majority of the benefits of the two statuses overlap.
Travel opportunities. A dual citizen can use either of their passports to travel to their desired destination with simplified or no visa requirements.
For example, a citizen of Algeria who also holds a passport of Portugal can enter the Schengen states with their Portuguese passport to skip all the visa hassle. Likewise, when planning to travel to the USA, they can get an eTA in 30 minutes as a citizen of Portugal instead of going through a complex visa application process.
Business opportunities. Both dual and second citizenship statuses allow choosing the country with a more favourable environment for starting a business.
Business-friendly conditions can include a stable economy, a beneficial taxation system, government support for startups, the percentage of employees with higher education, etc. According to Ceoworld Magazine, the best countries for business are Denmark, Germany, Australia, Canada, Switzerland, and the UAE.
Political rights. Citizens of a country have full political rights regardless of passports of other countries they might hold. Multiple passport holders can vote and participate in the civil and political life of both states of their citizenship. They can enter their country of citizenship at any given time with no conditions.
People with dual or multiple citizenships can work in their countries, own property, and take advantage of social benefits.
Ability to choose the better healthcare system. A person with two citizenships can choose the country with a more advanced healthcare system to get medical help.
For instance, a citizen of the USA who also has a passport of Malta can take advantage of their free medical insurance in Malta instead of paying for one in the USA.
More options for education. A second passport allows its holder and their children to choose the country for education and study at local universities without paying increased tuition fees.
In some cases, second citizenship opens up opportunities not in one but in several countries. For instance, a citizen of any EU state can study at universities all over the Union without having to pay foreign student tuition fees.
Possibility to lighten the tax burden. In many cases, multiple citizenships provide its holder with an option to cut their tax payments. The person can pick the country with a more beneficial taxation regime to become a tax resident.
Some countries don’t oblige their citizens to pay income taxes, others don’t charge income earned abroad or income on wealth, inheritance or gift. Some countries that allow their citizens to minimise the tax burden are Antigua and Barbuda, the UAE and Vanuatu.
After comparing the options and choosing the more beneficial state in terms of taxes, a person with multiple citizenships needs to become a tax resident of a chosen country. Usually, this requires residing in that country for at least six months per year.
Disadvantages of second and dual citizenship
There are some drawbacks to holding multiple citizenships, too. Most of them are potential risks and not inevitable.
Potential of double taxation. The flip side of the opportunity to reduce taxes for dual citizens is the risk of double taxation. Depending on the country and its laws, this risk appears for foreign income tax or property tax.
Exempt from some career paths. Another reason why dual citizenship might be bad is that in some countries, dual-nationals cannot work in government bodies, and won’t have the opportunity to become judges, ministers or deputies.
Military obligation. If a person with multiple citizenships serves in the military in one of their states, they might lose their other passports. This, however, is a very rare situation and depends on the laws of each particular state.
Individual cost calculation of the Maltese citizenship
How to get dual or second citizenship
Each country defines its rules for granting citizenship to foreign nationals. Usually, all the ways can be divided into three categories: by descent, naturalisation and investment.
Investment. Many countries offer foreign nationals citizenship-by-investment programs. Applicants are required to invest in the country’s economy — for example, make a contribution to a governmental fund, purchase real estate or fund a business. After that, investors are granted citizenship.
Usually, the process takes around 6—8 months. The investor can add to the application their family members and provide them with passports, too.
The investor does not have to prove their ties with the country or learn the national language to be granted citizenship. The main requirements for investors usually include being over 18 years old and providing proof that their income is legal.
Countries to obtain citizenship by investment
Spouse and children under 18
From 6 months
Spouse, children under 25, parents
Spouse, children under 30, parents, and siblings
Spouse, children under 30, parents, and siblings
Spouse, children under 30, parents, and siblings
Spouse, children under 30, parents
Spouse, children under 25, parents over 50
Descent. Citizenship by descent is available to foreign nationals who have direct ascendants among another state’s citizens. Usually, this applies to children, grandchildren and great-grandchildren of a country’s nationals.
Some countries, like Greece and Malta, grant citizenship by descent to younger generations too.
The process of obtaining citizenship by descent is usually relatively quick and takes up to several months.
Naturalisation. Naturalisation is a process of a person making strong connections in a country during many years. People can reside in foreign countries for work, studies, business purposes, or after marrying a citizen of that state.
Usually, this path takes many years and requires candidates for naturalisation to pass language and culture exams. Basically, being a naturalized citizen means having spent over five years in a country and built strong economical and cultural ties with it.
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Can you be a citizen in two countries?
How many citizenships can you have?
If a country allows its citizens to hold passports of other countries, then they can obtain as many as they want. You can have dual citizenship, triple citizenship or more. There are no international limitations for that.
How to get a second citizenship?
Generally, there are three ways to obtain citizenship of a country: by descent, naturalisation or investment. The latter option does not require the candidates to have strong financial or cultural ties with the country or have relatives among its nationals.
Does the US allow dual citizenship?
What countries allow dual citizenship?
How does dual citizenship work?
Dual citizenship implies being a citizen of two countries that have entered a bilateral agreement. Both states in that agreement recognise the rights and obligations of dual citizens in the other country.
Citizens of countries who have such an agreement can choose the country to pay taxes in and serve in the military, if necessary.
Do you pay taxes if you have dual citizenship?
Dual citizenship implies being a citizen of two states that are in a special agreement with each other. The countries recognise the rights and obligations of dual citizens in the other state. This means that a person with dual citizenship will pay taxes only in one of these states — the one they reside in.
When it comes to second citizenship, there is a potential risk of double taxation. To avoid that, one needs to unregister as a tax resident in one of the countries.
There are no special taxes for dual citizenship.
Can a US citizen hold dual citizenship?
Can you travel out on one passport and back on another?
It’s necessary to show the same travel document when entering and exiting a country. However, at the new destination, a dual citizen can present whatever document is more convenient.
For example, a person with Armenia and Malta passports will need to show their Maltese document when arriving in any Schengen state and leaving it. But at the country of destination, they can show their Armenian passport, if it’s more suitable. This can be the case if they are travelling, for instance, from Europe to China, which has a visa-free regime with Armenia.
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