Citizenship vs Residency
While the US media is trying to gaslight us with headlines that make absolutely zero sense by using contradicting words such as “undocumented citizens”, we are here to review on what CITIZENSHIP actually means.
Citizenship
– the citizen’s status in a country. Citizens are eligible for a passport, have voting rights, the ability to live and work in the country, etc.
Residency
– temporary permit to reside in the country based on various conditions. Some residency permits allow the ability to work in the country, while others don’t.
Tax Residency
– the status in a jurisdiction that determines your tax home base – the primary residence of filing your taxes based on a variety of factors such as physical presence, stream of income, distribution of assets, etc.
Understanding the difference between the three is extremely important when strategizing your jurisdictional arbitrage.
Depending on your goal, you will need to determine which one makes the most sense.
A couple of examples include
Looking for an exit strategy at the moment of emergency – Citizenship is the strongest tool, residency could possibly work in case your home jurisdiction is not the one imposing a crisis on you.
Looking to lower you taxes – you will need to establish a tax residency in a low-tax regime, which may require obtaining a residency permit or a citizenship.
In most cases, there would be a number of reasons that could motivate you to establishing additional flags – consider your potential attacks, family necessities, desirable lifestyle, and financial capabilities.