Second passports are being obtained by the wealthy due to perceived instability.

• Wealthy individuals are amassing "passport portfolios" consisting of multiple citizenships as a precautionary measure in case they need to escape their home country.
• Examples of high-profile second citizenships include billionaire tech investor Peter Thiel, who obtained citizenship in New Zealand, and former Google CEO Eric Schmidt, who applied for citizenship in Cyprus.
• According to Henley & Partners, the top destinations for Americans seeking supplemental passports are Portugal, Malta, Greece, and Italy.

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A leading law firm reports that wealthy U.S. families are increasingly seeking second citizenships and national residences as a means of mitigating financial risks.

These "passport portfolios" are being amassed by the wealthy as a backup plan in case they need to escape their home country. According to Henley & Partners, a law firm that specializes in high-net-worth citizenships, Americans are currently the most numerous nationality to acquire alternative residences or additional citizenships.

"Dominic Volek, group head of private clients at Henley & Partners, stated that while the U.S. remains a great country and an amazing passport, wealthy individuals understand the importance of diversification in their investments. As such, they would like to hedge against levels of volatility and uncertainty by diversifying their citizenship and residence."

Examples of high-profile second citizenships include billionaire tech investor Peter Thiel, who obtained citizenship in New Zealand, and former Google CEO Eric Schmidt, who applied for citizenship in Cyprus.

Although a small number of Americans renounce their citizenship annually, mainly due to tax obligations, the "exit tax" required to renounce citizenship makes it financially unfeasible for most except the wealthy to do so.

Numerous affluent Americans are seeking additional visa or citizenship options to complement their U.S. passport.

The most popular destinations for supplemental passports among Americans are Portugal, Malta, Greece, and Italy. Portugal's "Golden Visa" program is particularly popular because it offers a path to residency and citizenship, as well as visa-free travel in Europe, in exchange for an investment of 500,000 euros in a fund or private equity. Malta also offers a Golden Visa for 300,000 euros invested in real estate, which has become increasingly popular among Americans.

"Becoming a European citizen with Malta grants you complete settlement rights across Europe, allowing you to live, work, and study in any EU country."

The primary reasons for the increasing popularity of American passport portfolios, commonly known as "domicile diversification," are to facilitate travel for Americans visiting regions that are less welcoming to the U.S.

"Supplementary passports offer crucial flexibility for American, British, and Israeli citizens who are uncertain about their welcome abroad due to rising global instability. Having citizenship in another country, particularly one that is considered more neutral or politically benign, now provides a valuable back-up or alternative option."

Business travel can be safer and less conspicuous with a non-U.S. passport in many countries. U.S. business leaders could be targets for "resentment, hostage-taking, or random terrorism in the chaos of collapsed states or high-risk countries they need to travel to for business purposes," according to a report, which states that interested parties range from hedge-fund managers who meet with global clients to mining company executives who visit operations sites.

Cross-border financial transfers or deals can be facilitated using a secondary passport in the new country.

Some wealthy Americans seek a backup residency for possible retirement, to be near their families who reside abroad or for lifestyle reasons in the era of remote work. For others, U.S. politics motivate this desire.

""We are living in uncertain times worldwide, not just in the U.S., and it's crucial to have multiple plans in place, including Plan B, C, and D," Volek stated."

In 2024, it is predicted that the number of millionaires migrating globally will reach a new record high due to various factors such as wars, government crackdowns on wealth, and political instability. It is estimated that 128,000 millionaires will relocate to a new country this year, which is an increase from 120,000 in 2023 and from 51,000 in 2013, according to Henley.

In 2023, the United States received a net inflow of 2,200 millionaires from other countries, making it a top destination for global millionaires, according to Henley. This trend is expected to continue in 2024, with a projected inflow of 3,500 millionaires.

Last year, China experienced a net loss of 13,500 millionaires, making it the largest source of millionaire out-migration.

Volek stated that the wealth-creation opportunities in the U.S. are unmatched worldwide.

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