Part
01
of one
Part
01
What are the benefits and disadvantages of having dual citizenship in the US and Italy? Specifically, are there any financial detriments for a US citizen who obtains dual citizenship in Italy?
Greetings!
Thanks for your question about the benefits and disadvantages of having dual citizenship in the U.S. and Italy. Some of the most helpful resources happened to be slightly older than we typically look for, but there doesn't appear to have been any changes in the legal or financial framework of dual citizenship between the U.S. and Italy since the publication of these articles. The most helpful resources were Investopedia and Italiamerica.org. Below you will find a deep dive of my findings.
METHODOLOGY
As previously stated, some of the information publicly available was slightly dated, but still appears to be the most relevant and helpful insight on this topic. On that note, some of my resources came from public forums where individuals with dual citizenships shared their experiences. Generally speaking, we like to use trusted media websites and industry reports for our sources, but, in this case, a portion of the information came from personal accounts on forums. I sifted through all the resources pertaining to U.S./Italy dual citizenship and picked out the insights that were germane to your request (i.e. financial implications, tax issues, and information that only concerns people not living and working full-time in Italy). There was not much in the way of disadvantages, but there were quite a few advantages outlined in the reports. In the research brief that follows, I listed 5 benefits, and the 4 potential drawbacks that I could detect.
Note: Nothing came up in the research that would imply "detrimental financial issues" so long as you are not working and earning all of your income in Italy while still being a U.S. citizen.
POTENTIAL ADVANTAGES
According to Italiamerica.org, there are several benefits to gaining Italian citizenship that go beyond ease of travel. The website notes that if you want to work at an international company, dual citizenship is a huge advantage. "You can be transferred to Europe without any hassle on the part of the company. Between two equally-qualified candidates, a company with offices in Europe is more likely to hire the one with Italian citizenship."
On a more ominous note, the website reminds us that U.S. citizens and citizens of Western Europe are often the "main targets of terrorist attacks abroad." Thus, using an Italian passport when traveling to locations where Americans are unpopular might give you an extra layer of protection. "Also, if your government restricts travel to certain countries that you may want (or need) to visit, you can use your Italian passport to enter and move around more freely."
One of the major advantages of Italian citizenship is enjoying immediate access to Italy's social benefits: "You get voting rights, access to public healthcare and education and all of the other rights Italian citizens enjoy...many of these rights and benefits extend to all countries participating in the European Union allowing Italian Americans to buy property, start businesses, and find work just as any other citizen of the European Union would."
On that same business/financial note, avoidance of bureaucratic obstacles and restrictions is another major benefit of Italian citizenship. Italian citizenship will allow an American to invest quite freely in offshore securities and mutual funds, absent of any regulatory hindrances or restrictions. "Very few foreign companies are registered to sell their securities in the United States. Foreign brokers will not sell unregistered securities for fear of running afoul of the SEC. If you want these securities, it is sometimes essential to have a foreign identity."
On the topic of dual citizenship in general, Investopedia.com stated that "having a citizen's passport eliminates the need for long-stay visas and questioning about the purpose of your trip." Two passports will also guarantee your right to enter both countries "which can be especially important if you have family to visit, are a student, or do business in either country."
POTENTIAL DRAWBACKS
So long as you're not earning money in Italy there wouldn't be any potentially devastating tax issues. Furthermore, "the U.S. government and Italy have tax treaties to protect their citizens from dual taxation." However, it should be noted that "the U.S. imposes taxes on its citizens for income earned anywhere in the world. If you are a dual citizen living abroad, you might owe taxes both to the U.S. and to the country where the income was earned." On this subject, one individual who shared his account on a public forum stated that "It affects my taxes, as I pay taxes in both Italy and the U.S., but they have tax treaties between them, so it's nothing a competent accountant can't figure out."
Security clearance may or may not be a concern for a person trying to obtain dual citizenship. Investopedia.com notes that "If you are seeking a position with the U.S government or access to classified information, having dual citizenship can prevent you from gaining the security clearance you need to work in these fields."
Help from the U.S. Embassy while in Italy could potentially be an issue. One expat pointed out on an online forum that "If you are in Italy, the U.S. State Department is unlikely to ever be of assistance, because you are 'at home'. While you are in the U.S., the Italian government will similarly not intervene on your behalf."
Depending on your budget, it could be slightly costly to gain dual citizenship. The same passport fees - roughly $145 for five years - will apply. Additionally, the cost will vary according to how many generations removed you are from your Italian ancestors. Several (potentially expensive and difficult to acquire) documents are needed in order to be granted Italian citizenship. You will need:
-Italian ancestors' birth, death, and marriage certificates
-Certified copies of Italian ancestors' naturalization papers "or, in case he or she was never naturalized, you will need to perform some additional research in the Census Records and with the National Archives"
-New official copies of marriage, divorce, birth, and death records will be needed for all ancestors from a person's native country, including his/her own.
-Person's home state will need to provide legalization or International Apostille for all documents
-Translation fees for non-Italian documents
-Application fees - "As of July 8th, 2014, all applications for the recognition of the Italian citizenship Jure Sanguinis (by descent) are subject to the payment of a € 300 fee."
OTHER POINTS OF CONSIDERATION
It is important to remember to always use your U.S. passport when entering back into the states, otherwise you will be granted a 90-day visa.
SUMMARY
To wrap it up, there are not significant disadvantages that would impede on a U.S. citizen's desire to gain dual citizenship in Italy. There are, however, several advantages. All in all, dual citizenship seems like a great option, career-wise and socially.
Thanks for choosing Wonder! Please don't hesitate if you have any additional questions.