Wealthy Americans are increasingly looking to obtain a second citizenship to protect themselves from future financial hardships, according to a global law firm that specializes in investment migration and citizenship consulting.
The firm, Henley & Partners, told CNBC that many of their high-net-worth clients are looking to build "passport portfolios" in case they feel the need to leave their home country. According to Dominic Volek, executive and group head of private clients at Henley, the motivation behind seeking second citizenship is to "hedge against levels of volatility and uncertainty."
"The U.S. is still a great country, it's still an amazing passport," Volek told CNBC in a report published Wednesday morning. "But if I'm wealthy, I would like to hedge against levels of volatility and uncertainty."
"The idea of diversification is well understood by wealthy individuals around what they invest," he added. "It makes no sense to have one country of citizenship and residence when I have the ability to actually diversify that aspect of my life as well."
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According to Henley & Partners' passport index, which ranks the world's passports based on the number of destinations its holders can access without a visa, the U.S. passport is currently tied for seventh as of Thursday, with Americans being able to access 188 countries visa-free.
Holders of the top-ranked passports a tie between—France, Germany, Italy, Japan, Singapore and Spain—can travel to 194 countries without obtaining a visa prior.
But the push to seek a second citizenship is not only seen among wealthier Americans. Ted Baumann, the chief global diversification expert at International Living, told Newsweek on Thursday that the platform works with Americans "of all income levels" who are interested in moving abroad.
"We have found a definite increase in interest in a second citizenship and passport," Baumann said over email. "It's not limited to high-net-worth people."
There are several reasons why U.S. citizens are interested in leaving the country, but Baumann noted that finances play a big part for most individuals, and not just "in the way that boutique citizenship by investment consultancies tend to present it."
"Yes, some people want to move large amounts of money to foreign jurisdictions to protect it from the collapse of the dollar and so on," he continued. "But a much broader group are motivated by the high cost of living in the U.S., especially as they age. Healthcare, communication services, and other essentials are simply out of reach for more and more people."
Political "dysfunction" in America is another major reason citizens are looking to go abroad, Baumann said, noting that fighting within the public sphere is "biggest obstacle to solving those cost-of-living issues."
"The federal government is unable to legislate on anything, much less challenging issues like the health care system," he added. "So for these ordinary middle-class folks, moving abroad and becoming a citizen is a way to hedge against a political risk that has enormous financial implications for them."
Newsweek reached out to Henley & Partners via email for additional comment on Wednesday.
A survey by Monmouth University Polling Institute released last month found that over a third of Americans would like to live in another country. The poll, based on responses of 902 Americans, showed a massive increase from a similar poll conducted by Gallup in 2019, in which 16 percent of Americans surveyed in 2017 and 2018 said they would like to permanently move to another country.
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The director of Monmouth's polling institute, Patrick Murray, previously told Newsweek that while he couldn't be certain exactly when the number of Americans who wanted to flee the country had jumped, "I'd be willing to bet that the partisan [political] rancor of the past few years has played a significant role in the heightened desire to emigrate."
Update 04/11/24, 1:56 p.m. ET: This story has been updated with additional comment from International Living and to reflect a change in ranking.
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