How to obtain dual citizenship, which countries accept it, and how it impacts taxes

A lot of people have a lifelong dream to acquire a passport of another country — on top of their country of origin’s one. Holding two passports is called having a dual citizenship or having a second citizenship.

Being a dual citizen comes with a set of caveats though. All the good things — e.g. access to the healthcare and education systems — come interlocked with difficulties, such as double taxation and restrictions to run for public office.

Below we’ll explain what dual citizenship is, how it’s different from multiple citizenship and permanent residency, which countries accept dual citizenship, and which things you need to keep in mind when getting another passport.

What is dual citizenship?

In short, it’s when you hold two passports at the same time: from your country of origin and from another country. A dual citizen has rights and obligations in both countries.

How is dual citizenship different from a second citizenship?

The key difference is at the legislative level: The countries you are a citizen of should have a bilateral agreement in place which allows you to hold several passports. Spain, for example, has such an agreement with their former colonies: Argentina, Colombia, Peru, Chile, Ecuador, and many others.

However, if no such agreement exists, your acquired citizenship is a second citizenship, i.e. it’s not recognized in your country of origin. The consequences are simple: you still have to fulfill all your obligations in your country of origin (such as paying taxes) regardless of whether you also do that in the country where you hold a second citizenship.

What is the difference between dual citizenship and multiple citizenship?

The difference between dual and multiple citizenships is simply in the number of passports you hold simultaneously. Dual citizens have two, people with multiple citizenship have three or more. Nothing precludes you from acquiring as many passports as you like (as long as you go through all the necessary steps). 

However, do keep in mind that some countries do not accept dual citizenship: You will have to renounce your original passport to get another one. We’ll stop on this point in greater detail in a bit.

What is the difference between dual citizenship and permanent residency?

As a rule, you cannot partake in elections or hold public office unless you are a citizen of the country in question.

However, when it comes to traveling, access to healthcare and education systems, starting your own business or buying property, permanent residency is hardly different from citizenship. You can leave the country and return as you please and stay as long as you like. 

Do keep in mind that, if you intend to apply for citizenship after getting permanent residency, there are usually rules in place you’ll have to follow, such as living in a country for an extended period of time.

Finally, you are usually required to renew your residence permit every once in a while. It might be anywhere from 5 to 10 years, depending on the country.

Dual citizenship pros and cons

Pros of dual citizenship

The process of obtaining dual citizenship

There are four possible ways you can get another country’s citizenship. Not all of them are available for all the countries, so check the legislation of the country in question before embarking on your journey.

By birth

In most cases you have grounds for citizenship if your parents are citizens of a certain country — even if you yourself weren’t born there.

A reverse scenario also works quite well: If you were born in a certain state, odds are you can become a citizen thereof, even if your parents aren’t. That’s why giving birth in the US is so popular: Children born on American soil have a right to claim US citizenship.

By naturalization

This means living in one country or another for an extended period of time, first and foremost. For example, in Portugal you can apply for citizenship after staying in the country for 5 years.

Most countries also establish language thresholds. This means you’ll need to prove you know the native tongue at a certain level. You will also often need a clean criminal record — and sometimes a medical evaluation and/or a history exam on top.

By marriage

Marrying a citizen of another country generally makes it much easier for you to gain citizenship as well. In the US you can apply for citizenship after being married for 3 years — provided you have lived with your spouses the entirety of this term.

Through investment

This path is probably the hardest on the list — simply because fewer countries have such an option. The most notable ones are the Caribbean countries, as well as some European. Portugal, Spain and Greece are on that list. The investment can be in government bonds, real estate, or even private companies — carefully check which countries offer which options.

Which countries allow dual citizenship with the US?

A US citizen can hold another citizenship on top of the US one — you are not required to relinquish it. However, you will need to use your US passport when crossing the US border. Below is a comprehensive list of countries that allow dual citizenship with the US.

European countries

Asian countries

African countries

Americas & Oceania

Countries that do not allow dual citizenship

If you were born in one of the countries below, you cannot have a second citizenship without renouncing your original one.

Countries that allow dual citizenship only through descent

If you can prove that your ancestors were born in the country in question, you will be able to obtain citizenship. However, this is the only means available to you — unless, of course, you yourself were born in that country. The list is pretty short though, and includes only seven countries:

• Bulgaria
• Croatia
• Cambodia
• Hong Kong
• Liechtenstein
• Netherlands
• South Korea

Countries that grant citizenship to the investor

Some countries allow you to obtain citizenship if you make a sizable contribution to the economy. The list is again pretty short: but do keep in mind that some countries can grant you residency through investment. Just not citizenship straight away.

• Antigua and Barbuda
• Austria
• Dominica
• Egypt
• Grenada
• Jordan
• Malta
• Montenegro
• Nauru
• North Macedonia
• St. Kitts and Nevis
• St. Lucia
• Turkey

Where do I pay taxes as a dual US citizen?

The US is one of the few countries where citizenship comes before residency. This means that by default you have to pay taxes even from income you earn outside the US. Keep in mind that you also have to pay taxes on any income the source of which is stateside — even if you are living abroad.

However, there is a bright side: The US has tax treaties in place with 68 countries, precisely to avoid double taxation. Even if, under the treaty provisions, you don’t have to pay taxes in the US, you still need to file your return, and attach a respective form.

If the country where you have another citizenship does not have a treaty in place with the US, there are other important benefits you can still claim to avoid double taxation.

How to avoid double taxation without a treaty in place?

There are three IRS-regulated benefits US citizens can leverage to avoid double taxation. We’ll outline them briefly below. To qualify for these, you have to meet either the bona fide residence test or the physical presence test:

• Bona fide residence test: You need to live in a foreign country for a period that includes an entire tax year.
• Physical presence test: You need to live in a foreign country for at least 330 days during any period for 12 consecutive months — including some part of the year in question.

Foreign earned income exclusion

Foreign earned income means money you receive for your professional services. Salaries, wages, bonuses, professional fees and tips all fall under that category.
To claim the foreign earned income exclusion, you should have:

• one of the types of income outlined above
• your tax home in a foreign country (be present there for a full tax year)
• earn under a certain amount annually ($130,000 per person in 2025)

If you are married, and living abroad with your spouse, they can also claim the exclusion for the same amount. So if you file together, the number will stand at $260,000 for 2025.

Foreign housing exclusion/deduction

You can exclude/deduct housing-related expenses from your total taxable income based on this. In simple terms, you can exclude/deduct costs of rent this way, and some other linked expenses. The IRS does make a point these expenses cannot be lavish, e.g. buying property or excessively expensive accessories.

You can claim the exclusion only from the employer-provided income, which is considered foreign earned income for the tax year. The deduction is available to you from any self-employment earnings.

You can claim a maximum of 16% from your total foreign earned income ($126,000) multiplied by the number of days as a housing exclusion. It equates to just under $1650 monthly — a rather moderate sum, as you can see.

Foreign tax credit

A rather technical thing: in essence you can claim a credit or a deduction from income you earn from a foreign country. Keep in mind you cannot claim foreign tax credit, foreign earned income exclusion and foreign housing exclusion/deduction at the same time. One of the latter two will be dropped to accommodate the former. You also cannot claim foreign tax credit on its own, without including foreign earned income/foreign housing exclusion.