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Context: A Golden passport is a program offered by some countries, allowing foreigners, including Indian businesspeople, to acquire citizenship through substantial investments, enhancing global mobility and business opportunities.
About Golden passports
- Golden passports, also known as citizenship-by-investment programs, are initiatives offered by certain countries that allow foreign individuals to obtain citizenship or residency in exchange for significant investments in the country's economy.
Citizenship through Investment
●Golden passports allow individuals to acquire citizenship by making substantial investments in the host country.
●These investments can take various forms, such as purchasing real estate, making substantial financial contributions, or creating jobs within the country.
●In return, the investors and their families gain the privilege of holding a second passport, which often comes with a range of benefits and opportunities.
●One of the significant advantages of holding a golden passport is the enhanced mobility it offers. Passport holders can often travel visa-free or with relaxed visa requirements to a large number of countries, making international business and travel more convenient.
●Golden passports facilitate international business activities by providing access to countries with robust business environments. Certain countries in Europe, such as Germany, Sweden, Spain, France, and Italy, are particularly attractive for business operations.
●Many countries offering golden passports have favourable tax policies, including no taxation on global income, capital gains, gifts, wealth, or inheritance. This tax-friendly environment appeals to high-net-worth individuals seeking to optimize their financial planning.
Diversification of Business Interests
●Holding a golden passport allows for diversification of business pursuits. Investors can own or operate businesses in different nations, reducing risks associated with reliance on a single economy.
Legal and Regulatory Stability
●Golden passports provide entrepreneurs and investors with consistency and transparency in legal and regulatory matters. This stability is crucial for individuals looking to establish and expand businesses in foreign countries.
Market Exploration and Access
●Golden passports facilitate market exploration and penetration, providing access to diverse business opportunities. Passport holders can explore new markets and attract global investments more effectively.
Safety Net in Economic Instability
●Holding a second passport can serve as a safety net in times of economic instability in one's home country. It provides the option to relocate and expand business activities in a more stable economic environment.
- Golden passports offer a range of benefits, including improved travel freedom, business opportunities, tax advantages, and legal stability, making them appealing options for high-net-worth individuals and entrepreneurs seeking international business expansion and financial optimization.
Q. Consider the following statements:
Statement 1: Golden passports are programs offered by certain countries where foreign individuals can acquire citizenship through financial investments.
Statement 2: These programs are primarily aimed at attracting wealthy individuals, investors, and entrepreneurs who contribute significantly to the host country's economy.
Which one of the following is correct in respect of the above statements?
A) Both Statement-1 and Statement-2 are correct and Statement-2 is the correct explanation for Statement-1
B) Both Statement-1 and Statement-2 are correct and Statement-2 is not the correct explanation for Statement-1
C) Statement-1 is correct but Statement-2 is incorrect
D) Statement-1 is incorrect but Statement-2 is correct
Statement 1 states the basic definition of a golden passport, which is accurate. Golden passports indeed allow foreign individuals to acquire citizenship through significant financial investments in specific countries.
Statement 2 provides additional context, explaining the purpose of these programs – attracting wealthy individuals, investors, and entrepreneurs to contribute substantially to the host country's economy. This statement also aligns with the typical goals of golden passport schemes.
Option A is correct because both statements are accurate, and Statement-2 correctly explains the purpose of Statement-1.