Having a second passport is an important way to protect your finances, your freedom, and your family. With tax rates in many legacy brand countries going up and politicians looking for more, a second passport can be a way to protect you from high taxes in the future. Today, I'm going to share with you eight second passports that you can get fast and that offer tax friendliness. Let's start with the fastest growing country in Latin America.
We haven't talked about it a lot. It's the Dominican Republic. Now, this is not a citizenship by investment program, and it's not to be confused with Dominica in the Eastern Caribbean, which does have a citizenship by investment program.
But the DR is a more affordable alternative for some folks to places like the Cayman Islands or the Turks and Caicos, the Bahamas. You can get a residence permit relatively affordably. You can get in on a fast track path with those little $200,000 to invest. And so rather than Dominica, which requires a $200,000 donation.
In the DR, you can get on the faster track with a $200,000 investment in something like property or starting your own company, just putting the cash in. There are cheaper routes available, but that's how you get a residence permit. And then you get on track to get a passport in as little as two years. While you are living in the DR, which you don't necessarily have to do if you're making the investment, but if you choose to live there and if you choose to become a tax resident, you first get a three-year...
Total territorial tax policy. Now, as you may know, territorial taxes mean that income sourced in the country is taxed at whatever their rates are. Could be somewhere in the mid-20s, generally, in the DR. And so if you have rental income, if you have a local salary, if you start a local business and you actually do trading in that business, then that will be taxed.
But the money you make in your home country or anywhere else in the world will not be taxed at all for the first three years. Thereafter, you would revert to the DR's policy of... territorial taxation on active income.
So let's say you run a business, for example, much more flexible in terms of what foreign corporations are taxed. So you set up your company somewhere else because the company you're setting up in the DR would only be used for the investment you need for the residence permit. Most people don't want to start a business in the DR. You may choose to buy real estate instead of starting that business.
But if you have an active business, you're not moving into the DR to get citizenship or to get residence. You're going to put the business somewhere else. And basically, the DR will allow you to have that business incorporated somewhere else, either nearby in the BVI or the Cayman Islands or somewhere further afield that's tax-friendly, and then not have to pay tax on that in the DR. What after those three years you will pay tax on in the DR is if you have things like dividends.
So if you have stock investments in Singapore that pay tax-free dividends, those are going to be taxed after the third year at the DR's 25% rate for individuals. And so that you will pay tax on. So if your income is mostly active, you may be able to live in the DR and basically not pay very much, if anything, in tax at all. And in those first three years, it may be possible for you to get the citizenship by then. Now, the DR will tell you a certain citizenship timeline.
I will tell you it is a more bureaucratic process. I have known people who have waited there for years to get their citizenship. I do think the fast-track method is actually fast-tracked. So you have to calculate the time to actually get the residence permit and then... be able to apply for citizenship and then wait for them to issue it.
One thing we tell you about second passports is just because a country says you can apply for a passport after X number of years does not mean that you will automatically be granted that citizenship and does not mean that they don't want to take some time processing it. So for example, Malta, which you can get by making a donation of about a million dollars with all the fees, you can get that passport that way in 18 months. If you want to get it through naturalization by just living there, it'll take you 18 years.
They say five years. I know numerous people there on the ground to say we don't really see any examples of that happening. So just because it says it on the tin doesn't mean that the government actually operates. And in the case of a country like Spain, it could take them years to approve your naturalization request. The DR is kind of in that bucket.
So as much as you think it might be able to be done in 18, 24 months, you're probably going to be there a little bit longer. But theoretically, you could have total tax-free earnings on all your forward income in the time it takes you to get a passport. Now, the DR's passport has gotten a little bit better, particularly if you're interested in Latin America or in parts of Africa or Eastern Europe.
And so you cannot go without a visa to Mexico or Argentina or Chile or Panama. But you can go to a lot of South America. You can go to northern Central America.
You have actually pretty good coverage across Africa. If you're an adventurer, if you think there's investment opportunities there, you have visa-free travel to Russia and Ukraine and Georgia and Turkey and that part of the world, as well as South Asia. So. and most of Southeast Asia, like Malaysia, where we host Nomad Cowboys Live every year. You also have visa-free travel to Japan, which for years we've talked about as one reason to get a DR passport as part of a portfolio.
Visa-free travel to Japan for non-Western, non-developed country passports is relatively rare. And so it is not maybe the best passport in the world. You need a visa to go to Europe, Schengen area, or the UK. But if you want to be in Latin America and Southeast Asia, if you want to be nomadic, that's not a... bad passport to have.
And if you can get that in a tax-friendly country, that's not a bad deal. Another tax-friendly country, and I said this with some caveats, in which you can get citizenship is Mexico. I've told you for years, Mexican residence is a cheap back pocket option. Call it a plan B. You don't have to live in Mexico if you get Mexican residence.
And so what people will do is they'll say there's a five-year timeline to citizenship. I don't even have to live there to keep that residence permit active. Maybe I'll go and just poke my head in, you know, once a year.
But eventually, I do need to live in Mexico for a decent amount of time to become a naturalized citizen. I'm going to have to learn some Spanish and probably to a higher standard from what I understand they ask for in the DR. In Mexico, they're a bit more serious, I believe, on the language test. You'll want to speak some Spanish. But here's the deal.
If you're not living in Mexico, a residence permit does not make you a tax resident. We always tell you there's a difference. Being a resident for immigration purposes does not necessarily make you a resident for tax purposes.
A U.S. green card is one of the few exceptions to that policy. A green card does make you a tax resident. Not the case in Mexico or most other countries.
So, you hold a Mexican residence permit in your back pocket for a couple of years. Live there if you want, don't if you don't. Go there whenever you want. At some point, you'll need to put a couple years on the ground. Mexico's tax test is somewhat similar to a center of life test.
What they look at is where is your home? And so bottom line, if you do not own a home in Mexico, perhaps I would say if you don't rent a home, let's say you're spending your time in Airbnbs, hotels, that kind of thing, that could be easier. If your income is not from Mexican sources, if you don't have a Mexican company, if you don't have other Mexican ties, it's possible, particularly for a shorter period of time, you could not be deemed a Mexican tax resident to spending a substantial amount of time in Mexico. I say this with nuance. I say this is not tax advice.
But the Nomad Capitalist R&D team has spent a lot of time over the years working with various Mexican tax experts. And so, you know, there's different situations for different people. This is one of those things that's not a blanket statement.
You want to evaluate what your situation is. But it's possible that you could spend a couple of years living in Mexico to claim citizenship after a couple of years of not living there on your residence permit, and that those couple years you spend there could be tax friendly. Again, more nuance involved there. The one thing I would not want to do is get into the Mexican tax net if I plan to leave, because there is a three-year period in which they really look at where you're going. We've had Mexican clients, and there are only certain places you can go to get out of that tax net.
They do restrict you. Mexico, on the positive side, though, offers one of the best passports in the world. In fact, I've told you, if I were to have a child, I would rather than be born in Mexico, because they have the same birthright citizenship policy that the U.S. and Canada and many countries in the Americas do.
I'd rather have a Mexican child. I think that 20 years from now, the opportunities will be better. There'll be a better image for Mexico.
I think that's already changing. People are going to Mexico. They're investing there.
It's more of a global force now than it was, I think, 10 years ago. I think the future is bright for Mexico. I don't care what happens in the next three, four, five years. I'm saying in a 20-year time horizon that a child would come to adulthood.
I'd rather them be Mexican. And quite frankly, there's not a huge difference between a U.S. and a Mexican passport. Mexicans can get a Russia visa free. Maybe that means nothing to you, but it shows they have good relations. outside of the West.
They need a visa to go to the U.S., of course. Many Mexicans get them, but okay. They did have visa-free travel to Canada. That was canceled.
It's probably for the better, quite frankly. Have you been to Canada recently? I haven't, but I hear people who go there. Very, very strong passport all around the world.
Very strong in Latin America. And if you want to shorten the timeline for citizenship, have a child there. You can apply for citizenship after two years of living there. You don't have to spend the years debating whether you want to live there first. Actually giving birth to a Mexican child not only gives them that opportunity by birth, but it gives you the chance to naturalize faster.
Another opportunity further down in South America is Uruguay. We've been talking more about Uruguay. They have an 11-year tax exemption as one of your options when you move there. They want people to come and bring their money.
And basically, for your first year plus another decade thereafter, you can pay no tax on all your foreign income. Now, again, if you have income from... any of these countries where you have rental property or you're running a local business or you have a local salary job, you're going to pay tax on that because that's a local source income.
But if your business is overseas, if your investments are overseas, I mean, how many people have Uruguayan investments, right? Buy a house. That could help you qualify for citizenship. That could help as part of the case that you're going to make. That would be an investment, but you're not going to rent that out.
That's just for your own use. Mexico, again, I mean, Buying a house, probably a bad idea. The DR could work.
So you can see there's different ways these programs work. But in Uruguay, you can pay essentially zero taxes for 11 years. They want you to come and do that.
Or they'll offer you 7% tax for the rest of your life. So you choose how long you want to spend in Uruguay. What's interesting about Uruguay, number one, people worried about craziness in the world, wars, geopolitical stuff.
You're pretty far down there. Who hates the Uruguayans? I get Mexico.
There's been a historical stigma. I think that's really changing. And I think those who don't get on that path are going to lose out.
Uruguay, great reputation to the extent people know what it's about. Progressive reputation. Good visa-free travel.
Again, you need a visa to go to the U.S. I think at one point they didn't need a visa or they were on the U.S. roadmap, but rejection rate's still a little bit too high. But otherwise, very good passport.
You can travel to pretty much everywhere in the world. Very welcome in every single country in Europe. Of course, all over South and Central America, you have access to extra privileges in South America under Mercosur, where you can live as a Uruguayan. So very good reputation.
I mean, obviously, the smaller country, it's a tax-friendly country. It's known for that, kind of the Switzerland of South America. There's a different person who might like that reputation, where the country's a little bit more secluded, a little bit more boring, a lot more boring than, let's say, Mexico, which is more vibrant, bigger, more geopolitical heft. More embassies around the world and yet... you know, more likely to crack down on tax the longer you live there.
So two different kinds of profiles. But Uruguay, excellent quality passport. You can get that in three years if you're there with your family.
Five years if you're single. Honestly, not sure who's moving to Uruguay single. I'm not so sure that's going to work out too well for you in terms of enjoying your life.
Now, this is a place where you need to spend some time. I've been in arguments with folks over the last eight or nine years about the difficulty in getting Uruguayan citizenship. Understand, in some of these Latin American countries, there's a civil law.
You know, you have more of a, you know, what do we think about this guy's application? If you're not spending the vast majority of your time there, I don't see a high likelihood of you being naturalized. So three years for a family, that's a pretty good timeline. But you're going to be living in Uruguay for that time. The good news is, it will be tax-friendly and pretty much tax-free while you are there.
But don't think... that you're going to go in and this is what we call a paper residence where you pop in here and there. Uruguay is not going to naturalize you doing that. I do think it's the kind of country where if you make a case, I have this property, I joined a golf club, I do this, I do that.
That's the kind of thing they like to see. And so those things could save you. But consider Uruguay a passport, you're going to live there for those three to five years. It may be one where they say, you know, three years, you're not quite ready, come back. I think I've heard something like that from Uruguay.
So, you know, Mexico, you're... putting a couple of years on the ground. Uruguay is at least three years on the ground. DR is a more flexible two to three years on the ground.
And depending on if you invest, you may need to be there that much at all. So you've got three pretty tax friendly countries where you can actually live there if you want, and you'll have a very good tax situation. Now, the other five are all in the Eastern Caribbean, where they have the Caribbean citizenship by investment programs.
Of course, we've talked about these for years, but let's go through it again. You can get citizenship in St. Kitts and Nevis. And that country has no personal or corporate income tax.
As a citizen, you can live there. So keep in mind, a residence permit allows you to live somewhere. But a residence permit at some point could be canceled.
They could say, you know, we're not going to renew this. I don't see a lot of that. But they could increase the requirements, could be the more likely thing. In Latin America, the good news is most countries just want to see you have an income.
The DR is kind of their rare one where they offer this fast track where, hey, if you invest some money, we'll move a little faster for you. But most Latin American countries, I don't see the requirements going up that much. But a citizenship basically means you're in for life.
You, your spouse, your kids. In the Caribbean, you could add extended family as well in many cases. They've opened that up.
So St. Kitts and Nevis, basically totally tax-free. Antigua and Barbuda, tax-free on the personal side. A bit of structuring done can help you on the corporate side. You can be tax-free. You're pretty close there.
The other St. Lucia, Grenada. Dominica, if you were to live there full time, you'll have some tax obligations. They are not tax havens.
This is one thing I think the industry frustrates me with, the citizenship industry. Number one, you go there and they have the same three passports they sell to everybody. You wouldn't believe how many clients have told us.
They didn't know what they were getting. They didn't know if this solved their problem. They just called someone, they saw an ad, and hey, we got these three passports.
Which one do you want? In one case, the person's been waiting three years. They came to us, we're already getting them other passports in the time they've been waiting.
for that first passport. So don't just go to the Caribbean and just get a passport because some company that you saw somewhere tells you. My approach is maybe you don't need a Caribbean citizenship, but if all you sell is Caribbean citizenship, everyone needs one.
But what they also do is they'll tell you, oh, this country has no taxes. Well, that's true because most people who get Caribbean citizenship don't live there. To me, what could be valuable as part of a passport portfolio is a tax-friendly country.
that you'd like to live in as part of the mix. Now, I'm very much in favor of Caribbean citizenship by investment. I became St. Lucia myself many years ago.
Now, as a St. Lucian, I can go to St. Kitts and Nevis through the Eastern Caribbean States community, and I can live in St. Kitts and Nevis. So don't think that having a tax-free place to live is your top priority. As long as you think this OECS is going to remain in force, I see no reason why it wouldn't, you don't have to get St. Kitts and Nevis, which has generally been a more expensive passport, to take advantage of their tax-free... free policies.
But don't think that if you live in St. Lucia, Grenada, or Dominica, you've got an entirely tax-free existence. I think Grenada may have some a little bit different. But St. Lucia, they have taxes.
Dominica, they have taxes. They don't have taxes if you don't live there. But really, no country taxes you if you don't live there except for the United States.
Yes, other countries nitpick on little things like when you leave, i.e. Mexico, they look at you for three years. Certain countries do that. But I think there's a lot of misrepresentation in the citizenship industry of what, you know, tax-free means. But the bottom line is, if you get any of those five Caribbean passports, you could potentially live in St. Kitts and Nevis tax-free.
Now, the question is... Would you rather have a passport in a country that you want to live in? You know, the Dominican Republic is also an island. It's a bigger island, more services. There's places like Sosua people like to move to.
Obviously, there's kind of the resort areas like Punta Cana, where some people choose to move to, kind of the Cancun of the DR. So there are some safe places. There are some gated communities. You get a lot of bang for your buck in terms of real estate, or you can just put money into a company. I mean, is that better than a Caribbean citizenship by investment? Quite frankly, I could see the case for maybe doing both.
Because one's going to be faster than the other, and one's going to be lighter weight than the other. And so for me, part of a passport portfolio is each different passport plays a different role. Are those diversified enough? It depends on your particular situation. But, you know, five countries in the Caribbean allow you to have access to tax-friendly living or tax-free living.
And as the Caribbean community, CARICOM, opens up, you know, you could go and live, for example, in Belize, which is a territorial tax system. And so if you're a CARICOM citizen, that's going to be easier for you to go to Belize. So more flexibility. One thing like Americans, Canadians, you know, should look at to a little bit lesser extent, UK, Australia, New Zealand citizens is right now you've access to one or two countries you can live in. You know, an EU citizenship, obviously not in Latin America, offers you access to about 30 countries you can live in.
Eastern Caribbean, you know, five countries you can live in. Nothing wrong with having it as part of your portfolio, whether it's for low taxes to make sure you always have that in case countries change their policies, whether it's, you know, Antigua and Barbuda was less open during COVID. People who were really against, you know, the COVID restrictions were not interested in Antigua. They were more going to the other islands. So, you know, opening up more options is never a bad thing.
But those are eight tax-friendly passports you can get quickly. Those quick passports are generally in Latin America. Other than by investment, there's nothing really you're going to get in Europe in less than five years. Most Middle Eastern and Asian countries don't grant citizenship to foreigners.
Again, with a few exceptions, by investment. Africa, the timelines are longer as well. So you're looking at Latin America and the Caribbean for fast.
And there you have it, eight tax-friendly countries. This is how to live like a king in Medellin.