Dual citizenship is defined as the status in which a person simultaneously holds the citizenship of two countries. This status allows individuals to enjoy the rights and fulfill the obligations of both nations.
The possibility of acquiring a second citizenship has evolved significantly in international law, shifting from a restrictive approach to being recognized as a human right, as outlined in instruments such as the Universal Declaration of Human Rights and the American Convention on Human Rights.
Currently, 144 countries allow this status without restrictions, while another 29 accept it with specific limitations. This article explores the legal framework and benefits some European countries offer in this context, followed by a discussion on the associated tax implications.
European Countries That Allow Dual Citizenship
Spain:
Spain allows dual citizenship under very particular terms. Citizens of Latin American countries, Andorra, the Philippines, Equatorial Guinea, and Portugal can acquire Spanish nationality without renouncing their original citizenship. This agreement also extends to Chile through a bilateral treaty that permits retaining both citizenships.
Portugal:
Portugal permits dual citizenship without restrictions, provided that the applicant’s country of origin allows it. This enables Portuguese citizens to retain their original nationality when acquiring another.
Italy:
Italy is among the most open countries regarding dual citizenship, imposing no requirements to renounce prior nationality. Additionally, Italy offers accessible pathways for descendants of Italians through the principle of iure sanguinis (right of blood).
Croatia:
Like Italy, Croatia allows its citizens to retain their original nationality upon acquiring another, making it a favorable jurisdiction for dual citizenship.
Greece:
Greece accepts dual citizenship and, similar to Italy, recognizes the right of descendants of Greeks to obtain citizenship through a simplified process.
Malta:
Malta, known for its citizenship-by-investment program, permits dual citizenship. Maltese citizens can acquire another nationality without losing their own.
Cyprus:
Cyprus also allows dual citizenship and is a popular choice for investors seeking the benefits of its residency and citizenship programs.
Does It Have Tax Implications?
In general, taxes are paid in the country where income is generated. However, having a second citizenship can lead to the risk of double taxation, where an individual is taxed on the same income in both countries.
To prevent this scenario, many countries have signed bilateral agreements. For example, Spain and Portugal have treaties with various nations to avoid double taxation, including specific agreements with Chile.
In Spain, the “Beckham Law” offers significant tax benefits, such as reduced tax burdens for foreigners and exemptions from declaring income earned outside the country.
In Portugal, the HQA Visa allows holders to pay a fixed 20% tax on income generated in the country, while foreign income remains tax-exempt for ten years.
AIM Global Assists You with Dual Citizenship Processes
This status offers significant benefits in terms of mobility, access to rights, and economic opportunities. However, it is crucial to consider the legal aspects involved.
At AIM Global, we provide expert advice on visas and naturalization processes in several European countries, including Spain, Portugal, Italy, Greece, and Croatia. With offices in Lisbon and Santiago de Chile, our team of experts will help you understand the legal and tax frameworks involved in your process.
Schedule an informational meeting with us today and start making your international citizenship and investment projects a reality.
