649: Plan B Citizenship: Exploring Investment and Ancestry Pathways with Ezzedeen Soleiman

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It is my pleasure to welcome. Ezzedine Solomon is here as an expert on plan B, second citizenship, second passports. What are your options? Citizen by investment. We've all heard about that extensively. It's widely promoted. But what about citizenship by ancestry? What about having options in a world where you can have a pandemic, shut down a country, disallow travel? People want other options because we never know what the future may hold. He is with Latitude World and we're going to dive into this topic today. Ezza, welcome. How are you?

Good. Yourself? Thank you for having me.

It's good to have you. And you're coming to us, I believe, from my hometown of Los Angeles, right?

That is right. That is correct.

Fantastic. Well, tell us a little bit about the macro picture for options for second citizenship.

Yeah, absolutely. So, I mean, we work with families here in the US that are looking for different options. Essentially they want mobility, they want freedom to travel, freedom to, you know, look for different opportunities and investment options abroad. And there are programs that are available from Europe to Asia to the Caribbean to even now, certain parts of Africa where governments will allow you to acquire either a second passport, citizenship or second residency through either an investment or a donation. And this is obviously, you know, available and you can keep your, your current citizenship, your American passport.

Yeah, so what's interesting about this is we, we see these different jurisdictions around the world and within the United States from state to state, competing for dollars. You know, they've, they've really started acting like free market actors competing for investment. And old are these programs, I mean, for example, in the 50s, 60s and 70s, were, were there citizenship by investment programs around?

Yeah, I mean, there are always investment or immigration programs to attract either talent or foreign direct investment. Right. Right here at home in the United States. I mean, the most popular program is the EB5 program.

Right, right.

Where foreign investors can park a. And in return, we'll get a green card or the EB1 or the, you know, O1 visas, where the U.S. government is looking to attract talent, to attract the top minds of the world. And then in return, after a couple years, they'll become, you know, citizens of the United States, and other countries around the world have been doing the same. So the first, really, citizenship by investment program was Saint Kitts and Nevis. Right. It's a little island in the Caribbean that started this program in the 90s where investors can either donate or invest in real estate, and in return, they will acquire a second passport. So that's been going on for a very long time. And, you know, countries like Canada, like the U.K. like Portugal, and, you know, we'll dive into this a bit further, have, you know, jumped on the bandwagon and are trying to attract talent and, you know, wealthy and talented individuals to their. To their shores.

Sure. And has citizen by donation been around as long? Was that kind of a concurrent start with citizenship by investment in many of these jurisdictions, or did one come before the other?

Right. So the easiest thing is getting a check Right. From an investor. So, like I said, St. Kitts started with the donation option. So either you donate 100,000 or 150,000. So writing a check, and in the process, it'll take approximately four to five months, and that country will grant you citizenship. So it's been used interchangeably. Right. When we say citizenship by investment, a lot of times you'll have the donation option as well. To give you an example, Malta, which is a European Union country Right. In the Mediterranean, has a citizenship by investment option, which requires a real estate investment, but also a very large donation, approximately 600 or 700,000. So that word is used interchangeably. So there are a lot of countries that use citizenship by investment as a gateway into their. Into their program.

Yeah. Okay, great. So take us around the world, if you would, and talk about some of the best and worst offerings here. And, you know, different offerings fit different people in different circumstances.

Right, right. That's. That's absolutely right, Jason. I mean, when we're looking at, you know, different programs around the world, a lot of times I ask my clients and, you know, I ask people that. That are in the. The industry, what would be the next best thing? So if you were to, you know, say, all right, the United States is my home country, but I'd like to spend a significant amount of time in a different part of the world where Would that be. So you would need to match lifestyle security, you know, just way of doing business.

80S and, and getting sort of the same lifestyle. So the next best thing would be Europe. Hence why I'm sure a lot of your, your, your viewers and listeners have, have heard of the Portuguese golden visa. Right. I was quoted as saying Portugal is a new California because it has a similar landscape. It is, or it was very affordable. There was a lot of talent going there and a lot of people spoke English and it was, you know, quite, quite a nice place to live, or still is. So Portugal has been, you know, the number one destination because it gives you, you know, access to free healthcare, free education, you have top restaurants and so on and so forth. And people, you know, could see themselves retiring there or spending at least four or five months out of the year there. So I would say number one is getting a destination in the European Union countries just because it gives you access to all the other states that are part of the European Union. So it sort of works like the United States, where you're a resident in one state, let's say, for example, Texas or California, but you have access to.

All the other states, which other member states. But haven't those programs really tightened up? I mean, how much do they cost now? Take us through the specifics of, say, Portugal, if you would.

Yeah, so Portugal is just one of the programs in the eu. They have tightened up because obviously this program started, I want to say, 10 years ago, right after the financial crisis to funnel some foreign direct investment to a particular area in the economy. Now that, you know, Portugal's suffering from its own success, the government is readjusting, I would say, and looking at different options to benefit their citizens and benefit the country. They have tightened up. You know, traditionally you were able to buy an apartment in the middle of lisbon, right, for 250 to 500,000. You have a beautiful apartment or home. Right now the government is making some changes to limit the real estate investment and they will focus on funds. Now, it has been announced, but it hasn't been voted into law yet. But we're expecting it to happen in the next couple of months or so. Governments like, for example, Cyprus closed their programs a couple of years ago. The UK had a Tier 1 investor visa, which attracted a lot of people to London. That program has been closed. So there has been a shift in the industry, for sure. There are programs that are opening up and there are other programs that are, like you said, tightening and closing down.

Okay, so, so what is the Portugal program now then?

So the Portugal program now is still open for real estate. The minimum requirement is approximately 280,000 invested in a commercial property. If investors are looking at the residential property so for themselves, then it would go up to 500,000 minimum.

Right. But the problem with these investment programs is it's not like you can just invest, I mean, correct me if I'm wrong, but you can't just invest in anything. You can't just buy a property there for $500,000 and say, oh, I qualified. Right. You know, you have to do them in certain areas. And that's right. Can only invest in certain funds or programs. And from what I'm told, these aren't the desirable investments or areas. Is that true or is that false?

So, yeah, that's. You're absolutely right. I mean, I'd like to say that they're still desirable. You can get a beautiful property maybe 20 to 30 minutes from the shore, from the coast, that which is, you know, much more than you get right now in la, I can tell you that. But you know, there are some funds that are, you know, very competitive compared to what you'll get in the US and so on and so forth. But yes, I mean, obviously the government is putting some restrictions on where foreigners can invest. So you can no longer invest in, you know, the city centers that you were able to, you know, a couple years ago. And now it's at, you know, areas that would need development for sure. But Portugal, yeah, like you said, is definitely shifting to the fund option. So the minimum requirement once the law will pass will be €500,000 in a managed fund. So it could be a private equity fund or, you know, a VC fund. And you need to hold that investment for five years. So that would be the new program or the new investment options moving, going ahead.

Okay. And so what about just doing a donation? Can you just pay your way into Portugal?

It's no longer the case. You know, There was a 250 donation option, but yeah, from what we're seeing, that will no longer be the case.

Okay, so the250,000 to just buy is out you just now.

Yeah, you just got to invest in, into a fund. I mean, Malta is the next best thing. Right. If we look at Portugal, the reason why, and I'd like to take a step back, the reason why it was so popular is because it's a passive investment. It doesn't require you to live there. Right. The minimum stay is, let's say, if you break it down to seven days a year, there and the. The minimum investment is 280. So it's relatively a low entry point. Malta, on the other hand, gives you citizenship in approximately 18 months. So you're granted citizenship in 18 months. You don't need to live there. There are some visits and some stay requirements, and there's a very strict due diligence process. But people can donate approximately a million euros, and then you'll be granted an EU passport.

Yeah, but that's super expensive. I mean, that's a really expensive price. A million bucks.

Yeah, exactly. So that's hence why Portugal is so popular, because it is relatively a low entry point. It does take longer, but. Yeah, so.

So why not do St. Kitts? I mean, what is. That's. That program has been just so talked about and so popular. Where does it stand now? I heard that one tightened up as well. Is that true?

Yeah, that is. That is definitely true. I mean, the EU and different countries that are part of the Schengen have put, you know, pressure on the Caribbean countries to refine and to tweak their. Their programs. So it really depends on lifestyle. Right, Jason? So some clients tell me that, you know, as I want to spend six months in Europe, I want to buy, you know, a house in France, I want to send my kids to school in Germany, and so on and so forth. So go pick Europe. Other, you know, other investors or other families across the US Will tell me, you know, what, as I want a plan B, I want an insurance policy. During the pandemic, you know, I felt like my wings were clipped. I was restricted. I had, you know, you know, business. Business deals across the world, and I wasn't able to travel because I was American. And as you remember, borders were shut to us. Right. So that would be the next best thing. It really is a tool to allow you to travel, to allow you to spend a significant amount of time in different countries without using your US Passport. So that's. That's, you know, the ultimate insurance policy.

I. I think a lot of people, though, aren't looking to actually move to the destination. They just want an option, and they want to be able to avoid future travel restrictions. So. So take us through St. Kitts. This is so talked about. I just got to ask you to finish that. What are the specifics of that program, if you will?

Right. So like you said, Jason, I mean, you're not required to live in St. Kitts. You're not required to move there. You don't need to spend a significant amount of time there. It really is a passive program. Or a passive passport. The requirements right now are bumped to approximately 250,000 in terms of donation, and the process takes approximately six to eight months.

And how much for investment? That's the donation. 250.

That's the donation? Yeah. The investment will go up to approximately 400 to 450,000. And that's in St. Kitts. Now, there are other countries in the Caribbean, like St. Lucia, like Bruno, Antigua, and Barbuda, that also have similar programs, either donation or investment in real estate. In fact, Antigua has a major destination for a lot of celebrities, and you can buy a home there, and you'll be granted citizenship. Right. And you need to keep the investment for at least five years. So that's, you know, a very manageable program for a lot of people that are looking for a second passport. Now, if you were to compare that with Europe, obviously you won't be able to spend or to live in Europe with a passport from St. Kitts. You're allowed 90 days there, but you won't be able to live there. Right. Hence why a lot of people choose the eu. And one other reason is that a passport or citizenship from an EU country like Malta, like Portugal, or like Spain is then passed down to different generations. Right. So your kids will get it, their kids, so on and so forth. And that's the ultimate plan, especially if you're looking at your legacy. Whereas, you know, the Caribbean programs are for you and your immediate family.

Oh, interesting. Okay, that's. That's interesting to know. All right, let's shift gears, if we could. Unless there's another destination or two, you really want to just quickly highlight. I mean, you didn't talk about it. Maybe. Maybe. Before we switch gears, I want to ask you about citizenship by ancestry, because I think that is all too often missed when you talk to these various providers, all they want to do is do the investment deal because they're making more money off of it, or the donation deal. They don't want to help you with ancestry, you know, but. But any other locations you want to highlight? You did mention Asia, but you didn't talk about a location in Asia. And nobody really talks much about different Asian programs. I'm sure they're out there.

Yeah. I mean, Asia, there are different programs that sort of pop up. Singapore had a fantastic program or has a fantastic program that requires you to set up your family office. Right. However, compared to the other programs I was talking about, it requires you to actually move there. So that might not be the best option for Americans, but it is still an Option. Another program would be the Malaysian program, which requires you to sort of pay a fee or donate. And that also, you know, is an option, but it might not be the best for Americans. So it really depends on what you're looking for there. Sometimes there aren't official programs, but programs that either require, you know, a business visa or setting up a company and so on and so forth in different parts of the world. And that's something that we can help with as well. So.

Yeah. Okay. Interesting. All right. Ancestry.

Yeah. So ancestry has been very big. And, you know, I was watching one of your interviews or podcasts, and you were talking about the refined American dream, which is very funny because, you know, a lot of people were looking at the U.S. you know, as, you know, the number one place in the world. And a lot of times it is. It is still the number one destination, you know, in the world. But right now, those people that were chasing the American dream or their ancestors that were chasing the American dream are looking at getting citizenship by descent. So if you have Italian roots, Polish roots, English, German and so on and so forth, there might be a passport out there for you without investment. So it's much more affordable. It does take a bit more time, but we've been very busy in that. In that aspect.

So with that, the only costs are probably some nominal government fees. And your fee. What does it cost to hire your firm to help with that?

So that's a good question. It really depends on, you know, how big the family is or how complex the file is. But why do a lot of people come to US versus doing it themselves? Because, one, you don't need to deal with a foreign government or a foreign, you know, organization or office. Two, everything is done in house. So, you know, we have offices in LA and we have offices in New York. And usually that's what a lot of people like, is that they send everything to us and we deal with it. And then three, you always have someone on the ground, right? So time difference and so on and so forth. And, you know, the requirements does get confusing. And our fees, it depends on the family, like I said. But it can go anywhere between 20 to 50,000. Profile.

Okay. And. And so there's no significant fee to the actual government that's going to, you know, I mean, probably some nominal fees.

Like I said, definitely some nominal fees.

You got to pay for a passport, too, so.

Exactly, exactly. So, you know, at the end of the day, those are your rights. Right? So it's just you exercising your rights and, you know, getting the the second passport.

Yeah. So how do you check your ancestry? I mean, what, what does that government of the, of the, of the country you're applying to? What do they check? What proof do they require? And how do you get it? I mean, how does one even know if they can go down this path?

Right. Well, that's our secret sauce, you know, Jason. But what we do is we have an initial consultation with, with the clients or with the families. If they say, you know, my grandmother, she came to the US Or I just found, you know, this foreign passport or this European passport in my father's drawer or what have you, then there is a search that we do. These governments do have lists and do have sort of a library of families that have immigrated or were once citizens of their country. And it's just about getting the right information, getting the right documents and doing that search. A lot of programs, like, for example, the Sephardic Jewish communities that, you know, we're part of. Let's say, for example, Spain and Portugal have actually, you know, just with their last name, we have gotten a lot of them citizenship back from those EU countries. So just little hints and little, you know, documents that help us do our job and ultimately getting you your. Your passport.

Do you go to ancestry.com, for example? I mean, the Mormon Church used to own that. I think BlackRock owns it now. That's scary. But do. Do you go there and search your ancestry and try to figure out your lineage and then bring it to your firm and you say, hey, let's go with this country or that country? I mean, is that what an American should do?

Yeah, I mean, a lot of times it's reaching out to us or, you know, in some instances, we've had people that said, hey, you know, I just got my ancestry tree or my family tree, and I have ties to, to Europe or to Germany or to France. Can we look into this? And yes, we can, obviously, with some documents, the ancestry results that you got. So, yeah, I definitely encourage everyone who either has, you know, some stories about their family immigrating or anything like that to do a bit of more. Do a bit more research and definitely reach out to us. There's, there's, you know, it doesn't hurt to see where, where your roots are.

You know, I guess the other element, and a lot of people have been into this lately, is, does it, you know, what about a DNA test? If you go to 23andMe and it, you know, that tells you things too, right?

That definitely tells you things. It's a bit More complicated. When it's a DNA test, a lot of times these clients that come to us have either, you know, someone in the family that has talked about it or some sort of document that we can use. But the best, again, would be ancestry. A DNA gets a bit more difficult when we're dealing with the different governments.

Yeah, yeah. Interesting. What else would you like people to know? What question didn't I ask you? That, you know, is important for people to hear.

So a lot of times I get, you know, as itine, is this legal? And the answer is absolutely. You are allowed to have multiple passports. What are some of the tax implications? I'm not a tax expert, but as long as you don't have any business or any companies generating revenue in those countries, it's not a big deal. And a lot of times people ask me, again, do I need to live there? Do I need to pack my bag, sell my things in the US and say goodbye? And the answer is no. So these are definitely plan B solutions, plan B options, and it's just getting more and more popular. So.

Yeah, yeah. You know, to that point, though, I have been told by various experts over the years that for Americans, sometimes the US Actually has a problem with dual citizenship and they won't allow it, oddly. Which, you know, you'd kind of think that might be the other way around. It's. But is that wrong?

I mean, if it's a. I mean, if it's a country that isn't too friendly to the United States, then yes.

I would say absolutely no, a friendly country. I mean, we're not talking about Iran or North Korea or something, you know, just. Or, you know, nowadays you'd have to include Russia in that, I guess. But if it's just like a European country, for example.

Yeah. Then there's absolutely no problem in getting a second passport. You know, it. I'm not sure about the. The conversation, but yeah, again, you are allowed as an American to have a second passport, for sure.

Interesting, interesting. And does this have anything to do with various tax havens? And I know you said you're not a tax expert, but of course, interestingly, the. The places we talked about aren't sort of known as tax havens, where people are hiding money and avoiding, you know, evading taxes. There is an overlap there, though, isn't there? At least in the thinking about this?

Well, absolutely. I mean, people, a lot of people are getting second passports because they're planning for their future or they're planning, you know, for their legacy and how they want to you know, leave their wealth or transfer their wealth in some instances. There are tax treaties between different countries and the United States that people can take advantage of for sure. But as long as you're an American, you will pay taxes on your worldwide income, right? So you can take advantage of the different treaties. But again, usually the reason why people acquire a second passport is either for as a plan B for an insurance policy to plan for their legacy, or just a lifestyle play. So that's, that's one of the motivations.

Yep. Good stuff. Give out your website.

Yeah, so it's latitudeworld.com My name is Azedine Solomon. I'm out of LA, but feel free to reach out and happy to have a conversation.

Excellent. Thank you so much for joining us. We appreciate all the info.

Thank you.

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