Steve Kroft has a problem with second passports.
Specifically, the reporter and his team of producers slammed “citizenship by investment” programs in an editorial piece that aired on 60 Minutes this past Sunday night.
As we’ve discussed before, many countries around the world, including Malta, Dominica, St. Kitts, and Antigua, have Citizenship-by-Investment (CIP) programs.
Below is our 13F roundup for some high profile hedge funds for the three months to the end of March 2021 (Q1). Q1 2021 hedge fund letters, conferences and more The statements only include equity positions as 13Fs do not include cash and debt holdings. They also only include US equity holdings. Funds may hold Read More
The programs differ between countries, but they all provide an opportunity for foreigners to receive citizenship in exchange for making a donation or investment in the country.
In Dominica, for example, a foreign investor can qualify to apply for citizenship by making a $100,000 contribution to a fund run by the local government (it’s literally called “The Government Fund”).
Presuming the investor meets the other due diligence requirements, he or she can become a citizen and receive a passport from Dominica within a few months.
These programs are all completely legal and run by the governments’ official agencies.
In fact, in most countries it’s legal for the government to award citizenship to foreigners, typically to people who are high achievers in science, arts, or sports.
If Usain Bolt decided that he wants to move to Poland to run for their Olympic Team, the Polish government would award him citizenship in about two seconds.
Governments want to attract talented people who can make valuable contributions or bring recognition to their countries.
So what’s the difference if a Polish investor moves to Jamaica and builds a brand-new school in an impoverished area?
Or if a Canadian invests hundreds of thousands of dollars in a local charity in Antigua?
These seem like equally valuable contributions to reward foreigners with citizenship, especially in poverty-stricken countries.
In Dominica, for example, the funding provided by the CIP program was a major factor aiding the country’s recovery from the devastation of 2015’s Tropical Storm Erika.
The CIP program also helped the economy stay afloat during the worst of the Global Financial Crisis nearly a decade ago.
But Kroft doesn’t like the idea at all and apparently thinks that he should be able to decide what a foreign country is able to do with its own sovereignty.
Naturally, Kroft’s aversion against these programs is fear-based, revolving around concerns over terrorism and security.
His report goes on to showcase an Iranian attorney who obtained a passport from St. Kitts, another Caribbean island with a CIP program.
It was a no-brainer investment for the gentleman; as a global professional, he has to travel frequently to meet clients.
This is extremely difficult to do with an Iranian passport as visa requirements are quite stiff.
With a St. Kitts passport, he can travel visa-free (or obtain visa on arrival) to over 130 countries, including almost all of Latin America, Europe, and much of Asia.
Kroft thinks that Iranians should stay in Iran… and he appeared completely flummoxed upon meeting the man in Dubai, stating tersely “So you’re an Iranian living in Dubai with St. Kitts citizenship.”
This Iranian is a man who was born in an oppressive country devoid of economic freedom; yet he worked hard and took active steps to improve his situation by moving to a better place and obtaining a less-restrictive passport.
But Kroft, who by mere accident of birth happens to have a US passport entitling him to travel around the world without a visa, finds this “complicated”.
What small-minded, 19th century thinking.
In Kroft’s worldview, you live in the country where you were born, and you travel with its passport, and that’s that.
If you happen to be, by accident of birth, from another country with less opportunity or more restrictions, then tough shit.
But perhaps the most ridiculous part of the broadcast was that Kroft completely missed the point of a second passport altogether.
Kroft believes that second passports are only for criminals and terrorists.
In fact he lists the names of 10 suspected criminals who obtained CIP passports, conveniently skipping over the thousands upon thousands of law-abiding investors who have gone through the same programs.
In reality a second passport is an ideal part of any rational individual’s Plan B.
A second passport means that if your home country ever deteriorates to the point that you need to leave, you’ll always have a place to go… a safe place where you and your family are welcome to live, work, invest, and do business.
That, of course, is a worst-case scenario.
Yet even if nothing like that ever happens, you’ll still be able to enjoy benefits, like additional visa-free travel options which, in many cases, your children and grandchildren may be able to inherit.
Candidly, citizenship-by-investment isn’t right for most people simply because of the price tag.
I’m sure most of us can find better uses for $100,000 to $1 million, especially when there are MUCH easier ways to obtain a second passport.
For example, you can obtain citizenship in a number of places like Ireland or Italy if you have documented ancestry.
You can also obtain second passports in countries like Panama, Chile, or Argentina after a few years of legal residency (which you don’t necessarily have to spend in-country).
But the bottom line is that a second passport is a fantastic insurance policy. And this is something that makes sense for anyone.
What’s funny is that the 60 Minutes broadcast on Sunday showcased two other reports.
The first was about the extraordinary murder crisis in Chicago, where casualties have “surged to a level more in line with a war zone than one of America’s great cities.”
The second story was about a company in Cuba that was taken over by the communist government in 1959, and its owners were left with absolutely nothing but the clothes on their backs.
Ironically, both of these stories highlight the importance of having a second passport… of having a Plan B.