Rich Americans Are Increasingly Looking for Second Passports
26 Nov 2020

Eric Schmidt acquired all the typical trappings of a mega-rich U.S. citizen: a superyacht, a Gulfstream jet, a Manhattan penthouse.

One of his newest assets is far less conventional: a second passport.

Alphabet Inc.’s former chief executive officer applied to become a citizen of Cyprus, according to an announcement last month in a Cypriot newspaper that was first reported by the website Recode. Schmidt, 65, joins a growing club of individuals participating in government programs enabling foreigners to acquire passports.

In previous years, U.S. citizens rarely sought to buy so-called golden passports. The business mainly thrived targeting people from countries with fewer travel freedoms than the U.S., such as China, Nigeria or Pakistan.

But that’s changing. People close to the industry say they’ve been inundated with inquiries from citizens of the world’s richest country.

Dam Burst

“We haven’t seen the likes of this before,” said Paddy Blewer, a London-based director at citizenship and residency-advisory firm Henley & Partners, referring to queries from U.S. individuals. “The dam actually burst — and we didn’t realize it — at the end of last year, and it’s just continued getting stronger.”

A spokeswoman for Cyprus’s government declined to comment. Representatives for Schmidt — who is worth $19 billion according to the Bloomberg Billionaires Index — didn’t respond to requests for comment.

The benefits of owning a second passport, which range from potentially lower taxes, to more investing freedoms and less hassle traveling, can be had for as little as $100,000. The so-called citizenship-by-investment programs haven’t historically been as popular with Americans since one of their main draws — the favorable tax regimes of adopted countries — has been of little benefit to citizens of the U.S., one of the few nations to tax its people regardless of where they live.

The current heightened interest among U.S. citizens predates the coronavirus pandemic, but the crisis has helped turbo-charge demand as they plan for how to maintain some freedom of movement with lockdown measures increasing amid a swelling second wave of Covid-19 cases.

“Americans are thinking: ‘I want to have that ability to move as quickly as possible and not be stuck,’” said Nestor Alfred, chief executive officer of St. Lucia’s citizenship-by-investment unit.

By Benjamin Stupples and Devon Pendleton, Bloomberg, 24 November 2020

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