The Financial Pros and Cons of Dual Citizenship
Having dual citizenship as a Canadian has many benefits, from being able to travel between two countries with ease to owning property in two countries. In addition, there are important financial benefits and considerations as well.
Let’s look at the financial pros and cons of being a dual citizen and dive deeper into the complexities of this legal situation.
What is Dual Citizenship?
According to the Government of Canada, dual citizenship occurs when more than one country recognizes you as a citizen. Not all countries permit dual citizenship, but Canadians are allowed to take foreign citizenship while keeping their Canadian citizenship.1
In some situations, dual citizenship happens automatically, such as if someone is born in a foreign country but their parents are Canadian citizens, or if someone is born in Canada and their parents are citizens of another country. This process is called birthright citizenship.
In addition, you may be able to apply for dual citizenship later in life.
Who is Eligible for Dual Citizenship in Canada?
Citizenship can get a little complicated because each country has its own set of rules and laws regarding dual citizenship, but Canada has some of the most open and accepting laws regarding dual citizenship.
To be eligible for dual citizenship in Canada, you must have:
- Been born in Canada or a Canadian territory
- Have one of more parents who are Canadian citizens
- Have married a Canadian citizen
- Have gone through the legal process of earning citizenship, or
- Have lived in Canada for enough time to qualify for citizenship
Not all countries allow dual citizenship, so you should consult with your native government before applying. In some cases, residents have to renounce their citizenship in one country to get dual citizenship in Canada.
The Financial Pros and Cons of Dual Citizenship
In addition to being an immigration puzzle to solve, dual citizenship also comes with some benefits and considerations when it comes to planning out your finances. Here are just a few things to consider, but talking to a financial professional may help clarify the process.
Financial Pros of Dual Citizenship
There are quite a few financial benefits of being a dual citizen.
One of the most impactful benefits is that you may be able to work in both countries (depending on the laws of your home country). With this, you have the potential to grow your income and build a sound financial future.
You may also have access to the benefits of both countries, including social services, Canada’s Public Pensions System, and Canadian Medicare.
You may also be able to attend school in either country and may be eligible for resident tuition (which could save you thousands of dollars depending on where you go to school).
Lastly, you may be able to own property in either country, which is a powerful financial strategy to grow your net worth. Plus, you may be able to live in both places more economically—without having to rent a house or apartment.
Financial Cons of Dual Citizenship
With all of these benefits, there are a few financial considerations as well.
The first is that you may be subject to double taxation depending on your countries of residence. For example, the US imposes taxes on its citizens for income earned anywhere in the world, but you likely already paid income tax on the income in the other country of residence. However, there are some treaties between countries that help minimize this issue, so you need to check with your native country’s revenue service.
You may also face work restrictions in both countries if you have dual citizenship. This is especially the case if you are pursuing a job in a high-security government role.
Dual citizenship comes with many legal and financial complications that may be best sorted out with an immigration lawyer and financial advisor.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.