Globalisation has had a profound impact on the way that the world operates. Businesses now routinely operate across continents, whereas only a few decades ago, it was unusual to operate across internationally. Perhaps the most obvious example of the difference that this approach can have has happened online in front of our eyes.
The Go Global Dillema
In the early days of the web, Yahoo! had an advertising network that directly competed with Google’s. For some reason, management inside Yahoo! decided that they only wanted to serve US and Canada. Meanwhile Google rolled out across the world. We all know who won that battle…
Global is the new Local
Executives and business owners have learned their lesson and are now much more international than they have ever been before. This partly comes from their need to oversee an international business operation, which leads to extensive travel and connections, but also because it makes sound sense for their personal finances. While in the democratic world it is unusual for a country to descend into chaos and anarchy, it does happen.
Greener Pastures Abroad
For the international person of wealth and means, the obvious answer is to jump into their private jet and go elsewhere. If that is to be the case, then the ideal situation will be for them to have assets such as property and bank accounts already established in another location. That is true international financial diversification, as opposed to how the rest of us do it – which is to invest in a Far East fund in our pensions.
Second Passports – A New Lease of Life
Taking that thinking one step further, many of the world’s one percent choose to establish a personal residency in a location that is friendlier about taxes than their home country. This is the main reason why Monaco is what Monaco is. No taxes. With governments in need of cash as debt levels spiral around the world, a new business model has flourished in recent years. For the man or woman of real means and a desire to truly protect their freedom, a second passport is a must have item. Economic citizenship schemes allow the wealthy to invest in a country and as long as they fulfil certain criteria (which differ from country to country) including a predetermined period of time, they can become citizens of a new jurisdiction. Needless to say, some passports are more valuable than others.
The Coveted EU Member State Second Passport
For obvious reasons, a second passport from an EU Member State is a very valuable lifestyle addition. It can enable your children to study in European universities, and your family to travel with very few limits across Europe and further around the world. While the amounts desired by governments are relatively small (if you are a billionaire) they add up to useful amounts of money for small nations when there are hundreds of applicants per year. This helps the governments to further develop their national infrastructure and make their country even more attractive to visitors and investors. It does truly seem like a win-win arrangement.
However, these citizenship schemes are not without their controversies. In many countries the general populace are less enthusiastic than the politicians. They, of course, feel that it is their rights that are being sold and perhaps they are correct in some ways. But since the politicians write the rules and want to offer these programmes, they are legal and it can be argued that anything legal is automatically ethical.