A reliable passport instead of tax optimization: why citizenship cannot be delayed

Naturalization programs in EU countries and other states are becoming more complex and expensive. Those who have chosen low-tax jurisdictions like the UAE should rethink their strategy: getting a reliable passport now is more advantageous than waiting a few years and discovering that timelines have doubled and requirements have tightened.

Investment passports are losing value

Purchased passports — from African countries, Latin America, island nations of Oceania — provide no real protection. Banks, brokers, and serious investment funds do not recognize them. Even when contacting immigration authorities, officials ask to show a “real passport.” Passports bought for 100–400 thousand dollars fall into the category of illegally obtained documents and are trusted neither by the private sector nor by states.

Real protection of interests, assets, and family is provided only by passports obtained through naturalization, descent, restoration by roots, or family reunification.

Naturalization: timelines are growing

Currently, there is a clear global trend toward lengthening naturalization periods. Countries are shifting from a 5-year to a 10-year period. Portugal has already made this transition, as has the United Kingdom (though there are loopholes through startup visas and Global Talent). Japan has also changed its requirements.

Spain, Italy, and Switzerland already require 10 years. France is still holding out, as are Luxembourg, Belgium, and the Netherlands. Cyprus recently raised its requirements. Sooner or later, under pressure from political forces, the remaining European countries will also shift the timeline to a decade — to make it look more convincing to voters, the rhetoric will be about “closing the country to citizens.”

Meanwhile, the trend is only one: it will not simplify anywhere; everywhere it only gets more complicated. Requirements for income level are growing, language requirements are appearing, and property standards are tightening.

The window of opportunity is closing

Those who start the naturalization process now will likely complete it even if the law changes during their journey. New laws typically do not apply retroactively — this principle still holds. There is a bad precedent from Portugal, where people litigated for years and courts spent a long time on this issue, but in more orderly countries like the United Kingdom and France, this should be observed.

Therefore, it is worth starting the naturalization process now, while requirements still allow it to be completed in 5–10 years. In five years, this may be impossible due to new restrictions.

Rethinking a zero-tax strategy

People in the UAE or other low-tax jurisdictions often delay obtaining a passport, motivated by a desire to earn as much as possible without taxes. The plan looks simple: work tax-free for five years, accumulate net taxable capital, then move and obtain citizenship. But this approach is risky.

Instead, it is more reasonable to temporarily suspend profit withdrawals — leave the money circulating in the business, reinvest it, avoid paying yourself dividends and high salaries. Live off savings, move to a country where you can undergo naturalization, obtain citizenship — and return. The margin from tax optimization is not worth the risk of losing the opportunity to obtain a reliable passport.

Rare countries offer both advantages

The most favorable situation is when a country allows you to quickly obtain a passport while enjoying tax breaks. There are very few such countries: mainly Luxembourg and England.

Other options require a choice:

• Spain or Italy offer tax breaks for 10 years, but a passport also takes only 10 years.
• France quickly issues a passport, but does not provide tax breaks.
• Portugal was previously attractive, but recently switched to a 10-year timeline and no longer offers this advantage.

In all cases, you will have to choose which priority is higher: the speed of obtaining citizenship or tax optimization.

Taxes can be optimized even at high rates

The fact that a country has high taxes does not mean you should avoid naturalization there. Even in countries like France, taxes can be optimized through legal means — through tax breaks (if available), other legitimate planning mechanisms, without violating rules and laws.

Given the growing difficulties in obtaining a passport and the current situation in the UAE, it makes sense to consider moving to European countries for a few years, combining this with starting the naturalization process. A reliable country’s passport is more important than a few years of deferred taxes.