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Warning, investors! Avoid these 5 mistakes on your way to your second passport

19 November 2018

Obtaining a second passport by means of investing in another country’s economy is a decision of great moment and should be implemented with considerable care. We are all only human and no one is above erring, especially in such a narrow sphere of knowledge as immigration. To ensure the application process is finished in one go, let’s go over typical mistakes, the consequences of such mistakes, and solutions.

№1: Wrong country choice

Most people choose a country based on their own limited knowledge of pros and cons. It’s common practice among entrepreneurs to waste years while trying to become French citizens, or to obtain a passport of Netherlands, thinking it’s a must if these countries are crucial for their businesses. They lose precious time waiting for approval; it usually takes 2-3 years, and, if the application is rejected, the reason is not disclosed. Further attempts might lead to same results, since, without knowing the exact reason for the rejection, one might repeat the same mistake over and over.

How to avoid this?

Naturalization process is long and complex in almost all EU countries. The candidate’s application is queued for review, and there are no guarantees for success.
We suggest avoiding the “Which passport do I want?” train of thought. Instead, ask yourself, “What country offers the simplest way to receive citizenship?” In Europe, only Malta and Cyprus offer their passports in exchange for investment. The Maltese citizenship can be received within 12-16 months, and the passport of Cyprus — in just 3-6 months.
To receive a Cypriot citizenship you have to invest at least €2 million in real estate or business (it’s possible to combine these options). A passport of Malta can be obtained by investing at least €800k in a government fund, paper assets, and real estate. Passports of Malta and Cyprus are virtually permissions to reside in any EU country. For example, with a Maltese passport, you can freely move around the European Union and reside, say, in Germany.
Those who wish to have, say, an Austrian passport in order to attend business meetings in Europe several times a year, and live in the UK for several months a year, face a similar situation. It’s not necessary to go through all the procedures set by the Austrian authorities and wait in the general line. There is another way! Caribbean passports and passport of Vanuatu provide a visa-free access to the EU (90 days in 180 days) and possibility to live in the UK for 6 months.

№2. Attempts to save money lead to more extreme expenses

The desire to save is quite natural, why should wealthy and successful people be an exception? But seeking ways to save the hard-earned money, there is a risk of falling into the hands of thieves and incompetent “specialists”. In our years of practice, we have seen people who, prior to working with us, had lost time and tens of thousands of dollars because of scammers.

What can you do to avoid this?

The passport program of Honduras allows investors to buy a passport for $30–50k investment. We have nothing against Honduras. But if the program does not give any advantages like visa-free travel to multiple countries and being your safe harbour, is it worth it? This mistake is also tied to the mistake number one on this list — the wrong country choice.
It is crucial to only review official programs, approved and initiated by the government. Yes, there are clear, sometimes harsh, requirements and certain limitations. But at the same time, everything is transparent and unambiguous. Five Caribbean countries — Antigua and Barbuda, Saint Kitts and Nevis, Grenada, Dominica and Saint Lucia — offer excellent options in exchange for a relatively low amount of investment. Moreover, after recent cyclones, the cost of the citizenship of Antigua and Barbuda has been reduced by 50% and is now 100k US dollars. Saint Kitts and Nevis also suffered from the devastating hurricanes and had to reduce the cost of its passport by 40% for one applicant, or by 50% for a family of 4 people as well. These Caribbean passports offer quite impressive advantages.

№3. Concealing important information

Close to 80 percent of cases that get rejected fall in the category of “Incorrect personal information”. This means that during the due diligence (security check), the authorities found out some information is lacking or is not completely true (previous convictions, tax avoidance, etc.)
Despite hoping to receive impressive amount of foreign cash flow into the economy, the authorities of any state strictly and objectively control audit results. Incomprehensible sources of income, legal problems or bans on entry to certain countries can become a serious obstacle.

What is the nature of this mistake?

Incorrect information submitted for checks, any connection to companies whose policies are violating the laws, even miniscule, may lead to failure. Sometimes, investors do not even suspect that the activities of their company are considered illegal in another country. That’s why we recommend being as open and honest as possible. Transparency guarantees preventing all the risks and finding a solution before the verification begins.
Be sure, the authorities are interested in getting your investment. But they must also observe own laws and agreements with other countries. Internal investigations, requests to the international agencies and even hiring private detectives are quite typical for such audits.

№4. “Blind” property buying

Real estate investment is one of several options available to an investor who plans to regain a certain part of the funds in the future. The luxury house, villa or apartment can be put back on the market in 3-5 years, depending on the terms and conditions of an individual program.
Despite the importance and impressive payment amounts, some investors intend to buy real estate even without visiting the host country. They delegate the task to assistants, involve realtors, and only look at the price tag and pictures. In the best-case scenario, the agent performs an online tour of the house.

What is the nature of this mistake?

The investor might later regret buying property without prior visitation. Only when it’s too late do people come to conclusion they should have chosen a different location, a different type of villa or even a different city.
Do visit the country beforehand to personally assess the place, people, and the real estate. Of course, this is relevant primarily to those who think about relocating to their “second passport country”. Real estate agents will take your wishes into account and select the objects that suit your taste and wishes.

№5. Self-management

Successful people tend to accept new challenges, proving to themselves and to others they are able to cope with difficulties of any kind. It’s a wonderful trait. But applying for a second citizenship might be tricky without professional support. It really is not a good idea to manage everything by yourself when it comes to legal matters.

What are the roots of most frequent mistakes?

Without proper knowledge of all nuances of different programs, it’s hard to predict what might go wrong. It is better to hire a professional who would handle all the documents, estimate the risks and take into consideration the requirements of a particular country. By the way, many passport programs only accept the applications through government-approved certified agents.
Don’t put at risk your own investment. Don’t waste your precious time. Contact a team of professionals! Their experience will definitely increase the chances of a successful and quick procedure.

Interested in more detailed information about citizenship by investment programs? Contact us!

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