Wealthy U.S. families are increasingly seeking second citizenship and national residences as a way to hedge their financial risk, according to a leading law firm. Americans now outnumber every other nationality in securing alternative residences or additional citizenships. The idea of building “passport portfolios,” which consist of multiple citizenships, is becoming more common among the wealthy as a way to diversify and protect against uncertainty and volatility.
While some high-profile individuals like Peter Thiel and Eric Schmidt have obtained second citizenships, most wealthy Americans are simply looking to add a visa or citizenship program to their existing U.S. passport. Popular destinations for supplemental passports among Americans include Portugal, Malta, Greece, and Italy. These programs offer various benefits such as residency and citizenship in exchange for investments in real estate or funds. Domicile diversification is seen as a way to make travel easier, enhance business safety, facilitate financial transactions, and provide back-up residency options.
There are three main reasons for the rise in American passport portfolios. Firstly, an alternative passport can make travel easier for Americans to regions less friendly to the U.S. In an increasingly unstable world, having citizenship in a politically neutral or benign country offers a valuable back-up option. Secondly, non-U.S. passports can enhance business travel safety and reduce visibility in high-risk countries. Lastly, some wealthy Americans want a back-up residency for retirement, to be closer to family living abroad, or for lifestyle reasons in the age of remote work.
Globally, millionaire migration is expected to reach a new high in 2024 due to factors such as wars, government crackdowns on wealth, and political uncertainty. The U.S. remains a top destination for global millionaires leaving other countries, with significant net inflows of millionaires in recent years. China remains the biggest source of millionaire out-migration, losing a substantial number of millionaires each year. The wealth-creation opportunities in the U.S. are seen as unparalleled globally, attracting wealthy individuals looking for better economic prospects and lifestyle options.
In conclusion, the trend of wealthy Americans seeking second citizenship or national residences as a hedge against financial risk and uncertainty is on the rise. The concept of “passport portfolios” is becoming more common, with individuals looking to diversify their citizenships as a way to enhance travel, business safety, and lifestyle options. Global millionaire migration is expected to continue increasing, with the U.S. remaining a top destination for wealthy individuals seeking better economic opportunities and stability. As the world becomes more uncertain, having multiple citizenships is seen as a strategic move for those looking to protect their wealth and future.
