jsm tax

What are the benefits of a second residency?

Having all of your assets in one country leaves you open to political changes and instability.

The world is a fast changing place with governments coming into power with agendas that don’t align with the wealthy entrepreneur. Keeping a single residency leaves you with no choice but to accept changes that are imposed on a macro level, such as taxation increases and regulatory changes.

Following the COVID-19 pandemic that left many individuals unable to travel, the benefits of second residencies and passports came into their own, as it was only those within this category that were able to travel internationally. The real benefit for the wealthy individual is international freedom and enhanced security, however there can be other benefits listed below.

 

Tax Benefits

Being resident of a single country means that from a tax perspective you will likely be taxed in that country only. If this happens to be a developed country such as the UK or the USA this may result a significant tax liability. If you were to become tax resident is a tax favoured jurisdiction such as Dubai, UAE this may bring tax benefits owing to the 0% income tax available to residents.

Ability to Travel

Different passports offer different levels of visa free travel. Having more than one will allow you to travel on the most beneficial option.

Asset Protection

It can be difficult for potential creditors to locate worldwide assets, especially where they are held in offshore locations that are less than forthcoming with information requests from other countries, or have a higher level of proof required in civil cases. Having assets located offshore will help with protecting your wealth.

Location Independence

Being a citizen of a single country will leave you no choice should a travel ban be enforced, such as we found during the 2020 pandemic. In the event you have dual citizenship you will likely be able to travel using your second passport.

There are many other benefits available depending on the country of choice, and your personal circumstances.