A new index ranks Luxembourg as the world’s top passport for aspiring global citizens.
The small European country ranked number 1 out of 199 places in the “Nomad Passport Index 2022” published by the tax and immigration consultancy nomadic capitalist.
While many passport rankings focus solely on visa-free travel, this index adds taxes, global perception, ability to obtain dual citizenship, and personal freedoms into its score.
“I don’t think visa-free travel is the only thing that matters,” CEO Andrew Henderson said.
For example, US and Canadian passports are similar in terms of travel strength, he said. However, “if you’re an American, you’re taxed … no matter where you live, so those two passports shouldn’t be classed side by side.”
This is the methodology of the index:
Regarding tax policies, 10 points were assigned to places with worldwide taxation (United States) and 50 points to those with no taxation (United Arab Emirates). Those that imposed other tax restrictions on passport holders scored in the middle.
The top 10 rankings were unchanged from last year, with the half-point difference between No. 1 Luxembourg and No. 2 Sweden being reduced to “an additional country visa”, Henderson said.
Taxes are high in both countries, “but if you want to leave, it’s relatively flexible,” he said. Both countries rank well globally and rank high for personal freedom, Henderson said, noting that Sweden demonstrated the latter with its hands-off approach to the pandemic.
the complete list can be viewed on the Nomad Capitalist website.
Nearly 85% of the places on the top 30 list are in Europe.
What’s remarkable, Henderson said, is that countries like Malta, Iceland and Slovakia — places “people don’t often talk about” in terms of passport strength — hold their own against powerhouses like Italy and Germany. They also score above countries such as the United Kingdom, Australia and the United States.
Australia received points for restricting its citizens from entering the country during the pandemic, Henderson said.
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Vanuatu dropped from 69th place in 2021 to 85th this year, after the Council of the European Union partially suspended its visa waiver agreement with the island nation earlier this month. The decision was motivated by concerns that Vanuatu’s investor citizenship schemes: that allow people to obtain citizenship in exchange for investments of $130,000 in the islands — represented a threat to the security of the EU, according to the council website.
Citizenship was granted to people in Interpol’s database, and rejection rates were “extremely low,” according to the website.
It is not necessarily the case that the higher a country’s passport is, the more suitable it is for someone seeking to obtain a second or third citizenship there, Henderson said.
People typically build a “passport portfolio” for one of two reasons: to lower their taxes or to have a backup residency plan. A Luxembourg citizenship is unlikely to serve either group, she said.
Singapore, the only non-European country on the top 10 list, is doing well around the world, Anderson said. “Who doesn’t like Singapore?” he said.
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But citizenship in Portugal, the Caribbean or Malta can, especially for people in the second group.
The index also shows that some countries’ passports are stronger than people think.
“There are passports that people don’t realize are actually quite good,” he said. “Malaysia barely beats the United States, which is very interesting… All the Central Americans I’ve met don’t like their passport… [but] Central American passports are actually of very good quality.”