I get a lot of questions each week – many of which would be helpful to more than just the person asking. In that spirit, I thought I'd share a few of the more recent ones.
Dual Nationality
Q. I don't understand how a U.S. citizen can maintain a second passport, especially if they're a naturalized citizen. When you take the oath of allegiance to the United States upon naturalization, you must swear to give up other citizenships. Please enlighten me if I'm wrong. – D.
A. This confuses a lot of people. The oath of allegiance includes the phrase, "I absolutely and entirely renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state, or sovereignty, of whom or which I have heretofore been a subject or citizen."
However, the Department of State has confirmed that U.S. citizens can have dual nationality. You can read this for yourself at https://travel.state.gov/content/travel/en/404.html. In other words, you could say that this part of the oath isn't enforced.
Visa-Free Access to the EU on a Dominica Passport
Q. More than eight months ago, you wrote that the European Union was poised to give passport-holders from the Commonwealth of Dominica visa-free entry to all 28 EU countries. Can you give us an update on that situation? – S.
A. Unfortunately, the European Parliament has yet to consider it, even though the European Commission bureaucracy has recommended that Dominica passport-holders be given visa-free access to all EU countries. It seems the main reason for the delay is that Europe has bigger issues to consider now. For instance, the continuing financial crisis in much of Europe is a major concern and may have moved Dominica to the "back burner."
What I can say with certainty is that if and when the proposal becomes law, a Commonwealth of Dominica passport will instantly become a far more useful travel document. It's likely the cost for one of their passports will increase significantly.
About Getting a Visa After Expatriation
Q. If you expatriate from a consulate away from your new overseas home and wish to apply for a B2 visa from the United States, will the State Department hold that against you? Also, say if an expatriate lived in Malta, and applied for a B2 visa in Toronto, will they invoke the part of the legal code that requires an immigrant to have “strong ties to your home country” so that they won’t stay longer than the visa permits? – MF
A. Generally speaking, that doesn’t matter. However, consular officials do have a great deal of discretionary authority and occasionally do abuse it. They might disagree with your decision to expatriate at a U.S. consulate outside the country in which you now reside, or that issued your second passport. It’s equally possible they could hold it against you if you expatriated at a U.S. consulate in your country of residence or that issued your second passport. Wherever you apply for a U.S. visa after expatriation, you'll need to appear for a personal interview and try to convince the officer that you genuinely intend to return to your “home country” after visiting the United States. If you fail to do so, the consular officer will reject the application.
About Taxation for Residents of Dominica
Q. I'm interested in a passport from the Commonwealth of Dominica. If I relocate to Dominica once I obtain citizenship there, and live there permanently, how will I be taxed on my income? – N.
A. The top tax rate for residents of Dominica is 35%, which applies to both local and foreign income. However, it's possible to set up an international structure outside Dominica to legally defer tax on non-Dominica income.
How to Avoid "Bail-ins" at Insolvent Banks
Q. There has been a great deal of discussion about "bail ins," i.e., confiscation of bank deposits—in Europe, Canada, and the United States. As we know, depositors in some banks in Cyprus were forced to participate in a "bail in." It seems to me that countries with a history of respecting property rights are few: Switzerland, Singapore, Hong Kong, and Liechtenstein to name a few. What are your thoughts on the matter? – W.
A. The sad truth is that a bail-in could happen in any country in the world where a bank fails. Take Singapore, which is constantly touted as the “best of the best.” The liquidity ratios (a sign of overall health) that the government there requires banks to keep are quite high. But, just like every other country, there's no way the state could guarantee that depositors in a failed bank would get all their money back. The only option left to them might be a bail-in. The best option for you to avoid the possibility of a bail-in is to keep your money in banks with very high liquidity. This generally means private banks with no commercial lending exposure.
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Got a Question?
Don't hesitate to contact us, and we'll try to answer it in a future Q&A.
Mark Nestmann
www.Nestmann.com
