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Residency & Dual Citizenship

This information has been prepared and presented by John Schroder of Ascot Advisory Services.  The firm provides assistance and information regarding residency and naturalization in the Dominican Republic, incorporated companies, legal title transfer services in regards to real estate, plus other related services.  John has lived in the Dominican Republic for over seven years and has helped numerous clients in the Dominican Republic accordingly.

Possibly you have made up your mind to live in another country - to expatriate as it were.  Maybe you are just thinking about it.  Regardless, there certainly are some myths and falsehoods floating around - especially among Americans principally when it comes to matters related to Expatriation, Residency in your new country and Dual Citizenship as well.
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First off, the topic of expatriation - The Merriam-Webster dictionary defines it as follows:  Medieval Latin expatriates, past participle of expatriate to leave one's own country - 1: to withdraw (oneself) from residence in or allegiance to one's native country, 2: to leave one's native country to live elsewhere; also to renounce allegiance to one's native country. 
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In other words, the term expatriate could refer to someone that simply has decided to live in another country or it could refer to someone that has decided to renounce previous citizenship as well.  Both definitions apply.  So, for example, you are an expatriate if you are an American that decided to retire to say Ecuador, or where ever else for that matter, but of course maintain your existing citizenship as well.  Simply moving to another country does not mean you loose your existing citizenship, just as obtaining legal residency status in your new country does not jeopardize your existing nationality or citizenship either (more on this in a moment).  So, becoming an expatriate does not mean you are a criminal or some kind of anti-patriotic malcontent - nor does it mean that you have necessarily renounced or relinquished your previous citizenship either (although this is something you could do as well).  It simply could be that you decided to live in Thailand or the Dominican Republic, for example, because in such places you can live very well on your US$1,500 per month pension (whereas this is near impossible in many parts of the US or Europe).  Some people do of course take it a step further, and seek to become a citizen of their new country as well.  But again, dual citizenship is recognized and perfectly LEGAL in most countries, including the US.  However, choosing a country because of residency and or citizenship requirements can be just as important of a factor as climate, real estate prices, and so on.  Important because perhaps the requirements are too restrictive for you, too costly in terms of real estate purchase or other kinds of investment - or perhaps not - as the case may be.
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So, let us discuss residency first and then move on to dual citizenship as the next progression thereafter.  It is important to note that in your new country, one should obey the local laws and adhere to whatever legal requirements might exist.  In terms of immigration or residency matters, each country of course has their own set of rules and requirements.  In fact, this alone may be an important point to decide where you wish to live as well.  For example, in places such as the Turks and Ciacos Islands, in order to qualify for residency status, one must demonstrate a fairly expensive home purchase and or investment.  This is true also for the Bahamas, and a number of other destinations as well.  So, as an illustration, if you are not prepared to spend say US$250,000 for a second home - then that may eliminate such jurisdictions from the list of consideration.  Also, keep in mind that in can be almost impossible to obtain naturalization (ability to become a citizen) in the Turks and Caicos, so you must remain with residency status alone (and are subject to the whims of local government if they want to renew your residency status or not, and if not - you have a problem, especially after spending a considerable amount of money on a home purchase).  This was the very recent case in the Turks and Caicos, whereby many foreigners were forced to leave simply because the local political tide turned against them (and renewal of residency status refused).
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In contrast, countries such as the Dominican Republic have a fairly simple and straight-forward process for obtaining residency, and the requirement is that an applicant demonstrate assets or investments equal to RD$500,000 Pesos, which is about US$16,000 under current exchange rates.  So, doing something as simple as establishing a US Dollar Bank Certificate of Deposit (with a local bank) for a very affordable monetary amount will allow you to qualify.  In addition, one can become a naturalized citizen within a fairly short period of time (in comparison to other countries) after having achieved Permanent Resident status.  Panama allows for a fairly simple process if one establishes a bank deposit for US$200,000 and so it goes it many other jurisdictions as well (although the naturalization process is much quicker in the Dominican Republic than it is Panama, if this is an end goal).
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Naturalization in your new country, whether you decide to maintain dual citizenship (have two citizenships and thus two passports) or relinquish your previous one is often a natural progression for some people, but certainly not all.  However, in today's climate both in Europe and in the US, many people decide to obtain another citizenship out of investment necessity.  To explain further, any American that has attempted to open a banking or investment account in Switzerland and a host of other jurisdictions, will find the door closed to them simply because they are American.  Is it somehow illegal for an American to open a bank or investment account abroad?  Not at all, and neither is there any law or regulation prohibiting a bank in say Ireland, Switzerland, Liechtenstein, etc. to accept an American client either.  They simply will not do so, because they feel it is more hassle than worthwhile (hassle and aggravation from the American IRS to name just one).  It is interesting to note that for Americans, as just stated, a foreign account is perfectly legal - IF you can find a bank or broker to take you on as a customer.
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Europeans also have a problem in countries such as Switzerland now that the European Union has gone into full force, and has recently started pressuring tax reporting (and tax collection) when a citizen from one EU nation has an account in another.  Switzerland is not a member of the EU, but they have certainly been feeling the heat.  So, many Europeans as well are interested to become a citizen of Brazil, Costa Rica, where ever - simply for banking purposes also.  But banking or investing is not the only reason one might consider a dual nationality.  Travel is another concern, all depending upon what former country you come from.  To be sure, I know of many people that would prefer to travel as a Dominican, or a Costa Rican, etc. rather than their previous nation of citizenship (always better to be from some peaceful country not involved in politics or war elsewhere).  Of course the reasons for seeking dual nationality or dual citizenship do not stop there.  Some countries for example have more favorable tax legislation when it comes to inheritance matters.  Many others do NOT tax its citizens on interest or earnings from outside the country as well, so there are indeed many reasons on a personal level for someone to have an interest in this topic.
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One of the most troublesome things about the topic of dual citizenship (and residency also) is the lack of knowledge most people have.  Which is to say, they often rely upon rumor, innuendo or simply bad information to formulate an opinion.  Many Americans especially are ill informed.  For example, if you visit the following US State Department Web Site, you will find the information reprinted below:

A person who: (1) is naturalized in a foreign country; (2) takes a routine oath of allegiance or (3) accepts non-policy level employment with a foreign government and in so doing wishes to retain U.S. citizenship need not submit prior to the commission of a potentially expatriating act a statement or evidence of his or her intent to retain U.S. citizenship since such an intent will be presumed.  When, as the result of an individual's inquiry or an individual's application for registration or a passport it comes to the attention of a U.S. consular officer that a U.S. citizen has performed an act made potentially expatriating by Sections 349(a)(1), 349(a)(2), 349(a)(3) or 349(a)(4), the consular officer will simply ask the applicant if there was intent to relinquish U.S. citizenship when performing the act. If the answer is no, the consular officer will certify that it was not the person's intent to relinquish U.S. citizenship and, consequently, find that the person has retained U.S. citizenship.

DUAL NATIONALITY (From US State Department Web Site):

Dual nationality can occur as the result of a variety of circumstances. The automatic acquisition or retention of a foreign nationality, acquired, for example, by birth in a foreign country or through an alien parent, does not affect U.S. citizenship. It is prudent, however, to check with authorities of the other country to see if dual nationality is permissible under local law. Dual nationality can also occur when a person is naturalized in a foreign state without intending to relinquish U.S. nationality and is thereafter found not to have lost U.S. citizenship the individual consequently may possess dual nationality. While recognizing the existence of dual nationality and permitting Americans to have other nationalities, the U.S. Government does not endorse dual nationality as a matter of policy because of the problems, which it may cause. Claims of other countries upon dual-national U.S. citizens often place them in situations whereby their obligation to one country are in conflict with the laws of the other. In addition, their dual nationality may hamper efforts to provide U.S. diplomatic and consular protection to them when they are abroad.
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In summary, dual citizenship is perfectly legal if you are a US Citizen - Now You Know.  In addition, it is perfectly legal and accepted if you are a citizen of a large list of other countries as well.
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Do you become a legal resident of your new country or do you eventually become a citizen?  That is entirely up to you, and certainly a very personal decision for each individual.  But, the important point is, investigate the TRUTH and know the facts regardless of what you decide.

 

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