Dual Citizenship: Benefits and Complications for American Expats

# Dual Citizenship: Benefits and Complications for American Expats

In fiscal year 2024, the U.S. Department of State processed a record 24.5 million passport applications, and a growing share of those applicants held a second passport from countries like Ireland, Italy, Israel, and Mexico. The United States does not publish an official count of dual citizens, but the State Department's own guidance acknowledges that "dual nationality" is a status millions of Americans hold — often without fully understanding the legal consequences. A 2024 survey by the law firm Henley & Partners reported a 337% year-over-year increase in American inquiries about second citizenship programs.

Dual citizenship is not a loophole, a tax shelter, or a convenience. It is a legal status that creates overlapping obligations to two sovereign governments — and for U.S. citizens, those obligations follow you regardless of where you live.

What U.S. Law Actually Says

The State Department's position, published at travel.state.gov, is clear: "U.S. law does not mention dual nationality or require a person to choose one nationality or another." This wasn't always the case. The 1967 Supreme Court decision in *Afroyim v. Rusk* (387 U.S. 253) struck down laws that automatically stripped citizenship from Americans who voted in foreign elections or naturalized abroad. The 1990 State Department policy update went further, establishing a presumption that U.S. citizens intend to retain their citizenship when acquiring a foreign one.

This means a U.S. citizen can today obtain Italian, Portuguese, or Canadian citizenship without losing American status — provided they do not formally renounce it. The State Department identifies only one clear path to losing citizenship through naturalization: taking a foreign citizenship "with the intent to relinquish U.S. citizenship," which must be affirmatively declared.

However, certain acts still carry risk. Under 8 U.S.C. § 1481, serving in the armed forces of a state engaged in hostilities against the United States, or accepting a policy-level government position in a foreign country, can be interpreted as intent to relinquish. The State Department reviews these cases individually.

The Practical Benefits

Mobility

The Henley Passport Index for Q1 2026 ranked Singapore, Japan, and several EU member states at the top of global mobility — each offering visa-free or visa-on-arrival access to 190+ destinations. The U.S. passport ranked eighth, with access to 186. An American holding an EU passport adds unrestricted work and residency rights across 27 member states plus Iceland, Liechtenstein, Norway, and Switzerland.

This matters in specific, concrete ways. An American with Irish citizenship can accept a job in Berlin without a work permit. A dual U.S.-Mexican citizen can own beachfront property in the "restricted zone" within 50 kilometers of the coast without using a fideicomiso trust — a structure that typically costs $500–$2,000 annually to maintain, according to the Mexican Association of Real Estate Professionals.

Residency and Family

For binational families, dual citizenship eliminates visa renewal cycles, spousal sponsorship backlogs, and the risk of being separated during immigration processing. U.S. Citizenship and Immigration Services reports that the average processing time for Form I-130 (petition for alien relative) reached 14.8 months in 2024, with some family preference categories backlogged by years.

Access to Public Systems

Dual citizens typically qualify for healthcare, education, and social benefits in both countries without the residency waiting periods imposed on foreigners. A U.S.-Spanish dual citizen can enroll in Spain's public health system (Sistema Nacional de Salud) immediately upon registering residence, rather than waiting the 1–5 years some regions require of non-EU residents.

The Complications Americans Underestimate

Tax Obligations Don't Disappear

The United States is one of only two countries — the other being Eritrea — that taxes based on citizenship rather than residence. The IRS requires every U.S. citizen to file Form 1040 annually, regardless of where they live or earn income, if their income exceeds the filing threshold ($14,600 for single filers under 65 in tax year 2024).

The Foreign Earned Income Exclusion (Form 2555) allowed qualifying expats to exclude up to $126,500 of foreign earned income in 2024, and the Foreign Tax Credit (Form 1116) prevents most double taxation. But filing is not optional. The penalty for failing to file FBAR (FinCEN Form 114) — required when aggregate foreign accounts exceed $10,000 — starts at $10,000 for non-willful violations and can reach 50% of account value for willful ones, per 31 U.S.C. § 5321.

In 2024, the Treasury Department reported 5,100+ Americans formally renounced citizenship — a number that has averaged above 3,000 annually since FATCA (Foreign Account Tax Compliance Act) took effect in 2014. The IRS charges a $2,350 renunciation processing fee, and high-net-worth renouncers may owe an "exit tax" under IRC § 877A if their net worth exceeds $2 million or their average annual tax liability exceeds $201,000 (2024 threshold).

Military Service in the Other Country

Several countries with significant dual-citizen populations require military service. Israel's IDF requires service from male citizens aged 18–29, with specific exemptions for olim (immigrants) who arrived after age 22. South Korea's Military Manpower Administration requires 18–21 months of service from male citizens, and dual citizens who have not served may face restrictions on traveling to Korea. Greece, Singapore, and Turkey all maintain conscription systems that can apply to dual nationals.

The State Department explicitly warns that "U.S. citizens who also hold the citizenship of a country that requires military service may be obligated to serve in that country's armed forces" and that the U.S. government generally cannot intervene.

Consular Protection Is Limited in Your Other Country

This is the complication most often misunderstood. The State Department's guidance at travel.state.gov states plainly: "The country where a dual national is located generally has a stronger claim to that person's allegiance." If an American-Mexican dual citizen is arrested in Mexico, Mexican authorities are not required to notify the U.S. embassy or permit consular access under the Vienna Convention on Consular Relations (1963), because Mexico considers that person its own citizen.

This has real consequences in cases involving custody disputes, criminal charges, or civil detention. The Hague Convention on the Civil Aspects of International Child Abduction applies between countries that have ratified it, but dual-citizen children present jurisdictional complexities that have led to multi-year custody battles.

Entry and Exit Rules

U.S. law (22 U.S.C. § 212a) requires U.S. citizens to enter and exit the United States on a U.S. passport. Israel, Mexico, and several other countries impose parallel requirements. A dual citizen therefore needs to maintain — and renew — two valid passports at all times. The current U.S. passport book fee is $165 for adults ($130 application + $35 execution), per the State Department's 2024 fee schedule.

How Americans Typically Obtain Second Citizenship

**By descent (*jus sanguinis*)**: Italy, Ireland, Poland, Hungary, and Germany extend citizenship to descendants of citizens, often back multiple generations. Ireland allows claims through grandparents born on the island; Italy historically imposed no generational limit, though a March 2025 decree-law began restricting transmission to great-grandchildren and stricter documentation requirements.

**By marriage**: Spain offers naturalization after 1 year of marriage plus legal residence; France requires 4 years of marriage; Germany typically requires 3 years of marriage plus 2 years of residence.

**By residence**: Portugal's standard naturalization timeline is 5 years of legal residence; Argentina requires 2 years; Belgium requires 5 years of uninterrupted legal residence under its 2023 framework.

**By investment**: Caribbean programs (Antigua & Barbuda, Dominica, Grenada, St. Kitts & Nevis, St. Lucia) offer citizenship for investments starting at $200,000–$250,000 as of 2024 pricing. The EU ended Malta's program via a European Court of Justice ruling in April 2025, and Portugal eliminated real estate from its Golden Visa in 2023.

Practical Action Items

1. **Verify your claim before paying anyone.** Consular sections of foreign embassies in the U.S. provide free preliminary guidance. Law firms marketing citizenship-by-descent services charge $3,000–$15,000 per case; much of what they do is document retrieval you can manage yourself with patience.

1. **Document everything now, not later.** Apostilled birth, marriage, and death certificates are the backbone of descent claims. The State Department's Office of Authentications processes federal documents; state secretaries of state handle state-issued records. Processing can take 2–8 weeks.

1. **Consult a cross-border tax professional.** An enrolled agent or CPA with expat specialization typically charges $500–$2,500 for an expat return. The cost of non-compliance is higher.

1. **Keep both passports current.** Renew 9–12 months before expiration. Many countries refuse entry on passports with less than 6 months validity.

1. **Understand the exit, not just the entrance.** Before naturalizing, research what that country requires if you later want to leave — including tax clearance certificates, military service release, or renunciation procedures.

1. **Register births abroad promptly.** U.S. citizen parents abroad should file a Consular Report of Birth Abroad (Form DS-2029) at the nearest embassy. This establishes U.S. citizenship at birth and simplifies later documentation.

Conclusion

Dual citizenship is a legal relationship with two governments, not a travel upgrade. The benefits — mobility, family unity, access to work and healthcare systems — are real and, for many Americans, transformative. The complications — U.S. citizenship-based taxation, consular limitations, military service exposure, and the administrative weight of two systems — are equally real and frequently underestimated.

The next step depends on your situation. If you're pursuing citizenship by descent, begin with the consulate of your ancestral country and confirm current eligibility rules before investing in document retrieval. If you're considering citizenship by residence or investment, model the tax implications with a professional before committing to a timeline. If you already hold dual citizenship, confirm your FBAR and Form 8938 filing status for every year since you became a dual national — the IRS Streamlined Filing Compliance Procedures still offer a penalty-reduced path for non-willful past non-compliance.

One passport opens doors. Two passports come with two sets of keys — and two sets of locks.