Dual Citizenship and Second Passport by Investment: Difference and Benefits

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It is important to understand the difference between dual and a second citizenship. Despite appearing to be similar concepts, they offer different legal rights and status to the holder.

Dual citizenship assumes that a treaty on dual citizenship has been concluded between the two countries. Dual citizenship holders can choose the country in which they want to perform compulsory military service (if applicable) and their children inherit their dual citizenship at birth.

Dual (multiple) citizenship implies that a single person is legally recognized by the relevant authorities as a citizen of two (or more) countries at the same time and shares the rights and responsibilities of the citizens in each country.

Some countries do not allow dual citizenship and the rules vary among those that do.

Second citizenship. This is when a person holds passports of two (or more) countries without the mutual recognition by the relevant authorities of the rights or obligations of the person in relation to the other state (or states). Each of the countries recognizes only the citizenship issued by it and not the one issued by the other country (or countries). Often the authorities of the original country of citizenship are not even aware that their citizen also has another citizenship as long as their laws do not require such disclosure.

A second citizenship can be obtained, for example, through investment programs, whereas stricter conditions are imposed on dual citizenship. We have listed below some of the requirements that may need to be met for dual citizenship.

the child’s parents have different citizenships
the borders of the state have changed
the person migrated
a child is adopted by a foreigner
naturalization
repatriation

Dual citizenship is based on bilateral treaties between specific states.

Benefits of dual citizenship

A person with dual citizenship has all the rights of both states, but he cannot use these rights at the same time: they apply only in the country of residence. For example, dual citizenship does not entitle the holder to receive a pension or other benefits in both countries, only in the country of their current residence.

However, there are other rights that can be exercised in both countries simultaneously, for example, participating in elections. At the same time, dual citizens usually cannot hold elective offices or serve as a judge, in the police, in the security services or the prosecutor’s office.

The advantages of a dual citizen include the right to move freely between the two countries without visas, to conduct business in both countries, and seek diplomatic assistance from representatives of both countries while they are present in a third country.

As for their obligations, they apply in relation to both states and come into force in the country of residence. For example, a dual citizen of Russia and Tajikistan who is resident in Russia must pay taxes and serve in the army. If the dual citizen then moves to Tajikistan, they will then no longer pay taxes in Russia, but will start paying taxes in Tajikistan. However, they will be excused from compulsory military service if they completed compulsory military service in Russia.

Differences between dual and a second citizenship

Millions of people have obtained a second citizenship for a wide range of benefits, including those listed below.

travel freely around the world
work and study in countries that have signed the relevant treaties with the person’s country of origin
have a fallback in case of instability in their country of origin
be able to choose citizenship for their children
enjoy social security benefits in both countries
open accounts and conduct business abroad
make investments and plan their tax strategy according to the laws of the country of second citizenship

The disadvantages of a second citizenship include the possibility of having to enroll in compulsory military service in both countries (depending on the countries involved) and restrictions on career opportunities, as most countries do not allow second citizenship holders to hold high government offices.

Which countries recognize second citizenships

Most countries in the world allow second citizenships. Countries throughout the world can be divided into 3 groups regarding a second citizenship:

Countries where a second citizenship is allowed
Countries that allow a second citizenship in exceptional cases
Countries that do not recognize and prohibit a second citizenship

Countries where a second citizenship is allowed

Australia
Albania
Algeria
Angola Antigua and Barbuda Argentina
Armenia Bangladesh Barbados
Belize Belgium Bolivia
Brazil Hungary Vanuatu
UK Sudan USA
East Timor Ghana Honduras
Hong Kong Grenada Greece
Denmark Dominica Dominican Republic
Egypt Zambia Israel
Turkey Jordan Iraq
Ireland Iceland Italy
Cape Verde Canada Kenya
Cyprus Colombia Costa Rica
Ivory Coast Latvia Lebanon
Libya Luxembourg Mauritius
Macedonia Maldives Malta
Morocco Mexico Nauru
New Zealand Pakistan Palau
Palestine Panama Paraguay
Peru Portugal Russia
Romania Samoa Saint Kitts and Nevis
Saint Lucia Serbia Syria
Trinidad Tuvalu Tunisia
Uruguay Fiji Philippines
Finland France Czech Republic
Chile Switzerland Sweden
Sri Lanka Ecuador South Africa
Jamaica

Countries that allow a second citizenship in exceptional cases

Austria
Afghanistan
Bulgaria
Bosnia Guyana Guatemala
Germany Georgia Spain
Lithuania Liechtenstein, Moldova
Namibia Nigeria Netherlands
Nicaragua Norway Poland
El Salvador Seychelles Saint Vincent and the Grenadines
Slovenia Taiwan Tanzania
Croatia Montenegro Eritrea
Estonia South Korea

Countries that do not recognize and prohibit a second citizenship

Azerbaijan
Andorra
Bahamas
Bahrain Belarus Botswana
Bhutan Venezuela Vietnam
Djibouti Haiti Zimbabwe
India Indonesia Iran
Yemen Kazakhstan Qatar
China Congo Cuba
Kuwait Kyrgyzstan Laos
Macau Malaysia Marshall Islands
Micronesia Mozambique Monaco
Mongolia Myanmar Nepal
United Arab Emirates Oman Papua New Guinea
San Marino Saudi Arabia Swaziland
North Korea Singapore Slovakia
Solomon Islands Tajikistan Thailand
Tonga Turkmenistan Uzbekistan
Ukraine Ethiopia Japan

Consequences of obtaining a second citizenship: rights and obligations

Countries that grant a second citizenship usually do not inform the authorities of the person’s country of origin. If a person decides not to disclose the fact that they have a second citizenship the authorities of their country of origin are unlikely to become aware of it. However, if they were to find out, they could impose a fine or launch a criminal prosecution against the second passport holder.

Holders of a second passport are obliged to comply with the laws of the country of second citizenship and pay taxes there. Compared to the taxes payable in their country of origin, the charges applicable in many EU countries may be lower or may even not exist. Under such conditions, it makes sense to register or open a business in the country of second citizenship.

In order for a second passport holder to avoid double taxation, they need to choose the country where they prefer to pay their taxes, register their residence there, contact the contact authorities in their country of origin, provide proof of their new country of residence for tax purposes, and ask to update their status as a taxpayer.

Holders of second citizenships have almost all the rights of citizens of the chosen country. They can work, send their children to local schools, use the country’s healthcare services and travel visa-free (depending on the country of second citizenship) throughout the EU and many other countries. Second citizenship of certain countries enables the holder to spend 90 days in Europe without registering with the migration service or the police.

Countries that allow second citizenship and how it can be obtained

There are several options for obtaining a second citizenship. A foreign citizen can live in their selected country for several years on a residence permit, followed by another 5–7 years as a permanent resident, and then apply for citizenship.

The best way to expedite the process of obtaining a second passport is by participating in a citizenship by investment program. In this case, citizenship is granted in return for a contribution to the economy of the selected country. In some countries the contribution is non-refundable, while in others most of the contribution can be recouped over a period of about five years.

There are numerous countries that offer such programs.

Generally, the Caribbean countries offer the most attractive terms: the shortest processing times for obtaining citizenship with the minimum investment starting at $100,000.

Citizenship of a country in the Caribbean

The following 5 Caribbean countries offer the use of government programs to obtain a second passport:

Vanuatu, in the south-western Pacific Ocean, also has a citizenship by investment program.

Benefits of Caribbean passports:

visa-free travel to more than 120 countries, including the Schengen countries, UK, Hong Kong, Singapore, and China;
US visa (valid up to 10 years)
foreign currency accounts can be opened easily
low or zero tax rates, depending on the income category
easy asset registration
simple and quick procedure when applying for citizenship by investment
opportunity to recoup investment in real estate approved for the citizenship by investment program and annual income from the real estate investment
holidays in a beautiful country with a wonderful climate.

Maltese citizenship

Malta is also a very attractive choice for a second citizenship, although the due diligence procedure to obtain a Maltese passport is more thorough and takes longer to complete than in many other countries. The country’s authorities ensure that the investor has no criminal record, they are not a member of criminal groups, and all their capital originates from legitimate sources.

The Maltese citizenship by investment program is based on the following three compulsory investments: government bonds of Malta, a non-refundable contribution to the state, and the purchase or lease of real estate. The minimum investment starts at €690,000 and it can be partially recovered after 5 years without affecting the status of their citizenship .

The benefits of the program include those listed below

EU citizenship in a short time period: a Maltese passport can be obtained in just 12–16 months without the applicant having to live in the country
passports for all family members: spouse, minor children (including children from previous marriages), financially dependent adult children under the age of 26 years, and financially dependent parents of the investor or spouse who are at least 55 years old can participate in the program together with the investor
choice of place of residence: a Maltese passport holder can live in any EU country and travel to more than 160 countries without a visa.

We hope our article helped you understand all the intricacies of the concepts of second and dual citizenship. It is important to understand the different legal rights and status they offer and avoid confusing these similar-sounding terms.

The most important difference is that only a second citizenship can be obtained through the investment programs of some European countries.

If you decide to purchase a passport of an EU member state, please contact us and we will find and prepare a solution that suits you, including selecting the country and citizenship program, and we will assist you through the entire application process.

Frequently Asked Questions

What is “dual citizenship” and which countries allow it?

Dual citizenship only appears when two countries have a special agreement about it. Meaning that a person has two passports and both countries get information about the fact via official sources and acknowledge both citizenships as equal.

A person with dual citizenship has rights and duties towards both countries but those rights and duties can be allocated. For example, if a person has completed compulsory military service in one country, he is not subject to the draft in the other country. The person is to pay taxes and receive social benefits in the country where he permanently resides.

Some countries do not agreements on dual citizenship but allow the second one.

What is “second citizenship” and how to get it?

The second citizenship appears when a person gets a passport of another country and that country doesn’t have a special agreement on dual citizenship with the person’s motherland. In this case each country considers the person to be its exclusive citizen and might not know about the second or any other citizenships.

A person doesn’t lose his first citizenship if he gets a passport of another country. But both countries must allow their citizens to have two or more passports.

There are different ways of how to get the second citizenship. The most common variant is by naturalization. It means that a person moves to another country and first gets a residence permit. Then after several years he can get permanent residency and only after that to apply for citizenship. An applicant is to pass a language and history exam. The naturalization process can take up to 10 years.

The fastest and the most reliable way to get the second passport is to participate in governmental investment immigration programs. There are programs in several countries of the world, e.g. in the Caribbean and European countries.

What is the difference between dual and second citizenship?

The main difference between dual and second citizenship is in the fact whether the countries have or don’t have a special agreement on the matter. The fact also define rights and duties for a person with two passports.

If two countries have an agreement on dual citizenship then these countries acknowledge a person with dual citizenship as an equal citizen of both countries. In this case the countries exchange information and regulate the distribution of the citizen’s rights and duties.

A dual national can move freely between the countries of citizenship, run a business in both countries, seek diplomatic assistance from the embassies of these countries while staying in a third country.

But a dual national cannot exercise rights of the both countries at the same time, e.g. receive social benefits from both governments. The rights will apply according to legislation of the country of permanent residence.

Citizen’s duties also remain valid in relation to both countries but they can be separated. For example, a dual national is to pay taxes only in the country of residence and according to his tax residency. He needs to complete military service only in one country.

If a person obtains second citizenship, the countries don’t exchange information about citizens and don’t regulate execution of rights and duties towards any other country. For example, if a Russian citizen obtains Portugal passport, each country considers him to be its exclusive national.

Which countries grant citizenship for investments?

To obtain second citizenship by investment is the fastest and the most reliable way for wealthy people. Several countries of the world run investment immigration programs.

The Caribbean citizenship by investment is granted in Antigua and Barbuda, Grenada, Dominica, St Kitts and Nevis, Saint Lucia.

The Caribbean countries provide reasonably priced programs. To get a Caribbean passport, an applicant should invest in the country economy $100,000 or more. The procedure usually takes from 3 to 6 months.

Vanuatu citizenship by investment program is the fastest in the world. An investor can get a passport of this Pacific country in just 1 or 2 months. The minimum investment sum is $130,000.

Malta allows to obtain citizenship only by naturalization for exceptional service by direct investment. An investor first gets a residence permit. After a year or 3 years of residency he can apply for citizenship. If his application is approved, the applicant invests €690,000 or more to become a Maltese citizen.

Montenegro grants citizenship for investments in the the country's economy from €350,000. Participation in the program takes about 6 months.

What does the second citizenship by investment serve for?

The second passport obtained by investment is a long-term travel document. It also gives access to rights and privileges of another country’s citizens.

Benefits of a second passport:

visa-free travel around the globe;
opportunity to live, work and run business, study in the country of the second citizenship or in countries with relevant agreements;
access to international banks which allows to keep savings and fasten exchange transactions;
opportunity to optimize taxation for yourself and your business;
access to international medical services and education;
opportunity to quickly live the country in case of political or economic instability.