Last month, President Donald Trump and Commerce Secretary Howard Lutnick announced that the United States government would be “selling a gold card,” with permanent residency status and a pathway toward US citizenship, in exchange for a five million dollar ($5M) fee paid to the federal government. Although it is still unclear at this point what would be included in the gold card, which replaces the EB-5 visa for immigrant investors, Trump alluded to “green card privileges plus,” allowing gold card holders to build companies, provide jobs, and pay taxes.
But this gold card would be wildly overpriced, even to people having $5M to spare. Migrant investors can shop around globally among the many competing offers across a citizenship-by-investment (CBI) and residence-by-investment (RBI) landscape. What the Trump administration refers to as a “gold card” is merely what the citizenship and residence investment industry (yes, it’s a real industry) calls “golden visas,” essentially permanent residence visas available for purchase.
Of course, the United States has been and still is a land of opportunity for millions and has the largest economy by far. But second citizenships (considered more desirable than mere residence visas) can be had for a €500K investment in Portugal, an €700K+ investment in Malta, a €400K real estate investment in Turkey, or for about €250K in various Caribbean Island countries and for even less in Vanuatu and Nauru. While, for many, these locations might not be as attractive locations to live as the United States, holding a passport from some of them opens up the ability to live well beyond the passport issuer’s country. For example, a passport from Portugal and Malta allows you to live anywhere within Europe’s Schengen Area, and a passport from, say, Saint Kitts and Nevis, opens up the right to live in other Caribbean Community (“CARICOM”) member nations.
Beyond the mere right to settle in a country, citizenship implies the right to a passport, which allows for mobility even beyond the passport’s issuing country. And as it turns out, the American passport is hardly the crème de la crème. In terms of visa-free access and other criteria used to measure a passport’s overall strength, its ranking ties with other nations in eighth place. Said another way, if you had a Romanian or Croatian passport, you would be allowed to enter more countries visa-free than with an American passport. If your only present passport was issued by Pakistan or China, an American passport is a step up. But if you are from a European country, the Emirates, Singapore, or a number of other developed nations, chances are, your passport is already more powerful than the privilege the president wants to sell.
Possibly the biggest obstacle to the success of a $5M permanent residence visa to the United States is that, for many, being an American citizen or permanent resident is an enormous net liability (not an asset). As American expatriates (citizens who live outside the United States) will be quick to tell you, the United States taxes its citizens and green card holders wherever they are in the world on their global income — even if they have no intention of ever returning. Even for years when an American does not owe taxes to the IRS, they are still required to file (a time-consuming annual chore with additional accounting costs) as well as file an “FBAR” with the US Treasury’s Financial Crimes Enforcement Network, disclosing foreign bank accounts.
Americans abroad are also routinely turned away by foreign commercial banks that do not wish to incur the high costs of compliance with the US’s Foreign Account Tax Compliance Act (FACTA), which requires foreign banks to monitor and disclose the financial activities of American citizens to the American government. With all of this, Americans and American permanent residents (“green card holders”) are in many ways, while abroad, treated as second-class citizens thanks to present laws around taxation and reporting.
To Trump and Lutnick’s credit, both have confirmed that the gold card would exempt investors from taxes on their income sourced from outside the United States, while still taxing income sourced from within. But what happens when a gold card holder nationalizes as an American citizen? With no guarantee that their global income would be secure from the US’s global tax net, the gold card is less attractive.
While the Trump administration dangles a glorified green card with a $5M price tag in front of wealthy investors, it overlooks the rising number of wealthy Americans who renounce their citizenship each year. Mind you, they must pay a hefty expatriation tax upon renunciation. (In fairness, the United States still remains a net recipient of high net worth individuals — for now).
(Note: We have Abraham Lincoln to thank for citizenship-based-taxation. Although Eritrea, Hungary and Myanmar have some version of it, in practice, the United States is the only country with enough enforcement power to pull it off).
A Better Incentive for Investment
If the Trump administration really wants to raise investment dollars to pay towards the national debt or anything else, it could do a few things. First, it could increase the value of American citizenship and permanent resident status by doing away with citizenship-based-taxation altogether — for everyone.
An investor interested in a gold card is likely to want more than just a glorified residence visa. Eventual citizenship is the real prize. But investors know that present tax laws make acquiring American citizenship a permanent tax trap — not only for the investors themselves but also for their children. Children born to American citizens acquire American citizenship themselves, as well as all the tax liabilities that come with it.
As for taxation on global income, the Trump administration would be right to exclude it (as was announced). But would a gold card holder that later acquires American citizenship still be exempt from taxes on their foreign income? At the moment, it remains unclear.
As for FBAR and FATCA reporting requirements, both add unnecessary burdens for both Americans and foreign banks. FATCA is a cause of routine discrimination against Americans around the world, which diminishes the value of American citizenship. Axing the requirements for both would boost the value of American citizenship as well as the gold card.
In conclusion, high net worth individuals are able to shop around in a global marketplace for citizenship-by-investment (CBI) and residence-by-investment (RBI). These individuals can – in many ways – obtain much better “bang for their buck” than $5M residency visas, especially for a country that is likely to tax their global income and cause them compliance trouble with foreign banks.
To his credit, in October 2024, Trump made a campaign promise to Americans living abroad “to end double taxation on our overseas citizens.” But if the Trump administration wants to commoditize golden visas (and a pathway to citizenship) with a hefty price tag, it had better be ready for some long-overdue tax and financial reporting reform. The option to obtain an eventual American citizenship should stand out as an obvious net asset for wealthy investors, not a net liability.