Can Dual Citizenship Create Barriers When Bidding for Government Contracts Abroad?

 For entrepreneurs and business owners, government contracts represent a massive opportunity. They provide stable revenue, long-term partnerships, and credibility that can open doors to new markets. But if you’re a dual citizen looking to bid on government contracts in a foreign country, the process can be trickier than it looks. Dual citizenship can sometimes create barriers or additional scrutiny that you need to understand before pursuing contracts abroad.

In this blog, we’ll break down how dual citizenship can impact your ability to secure government contracts, the risks involved, and strategies to maximize your chances of success.

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1. Understanding Government Contracting Rules

Government contracts are highly regulated. Countries impose strict eligibility requirements to protect national security, ensure transparency, and support domestic businesses. Some common considerations include:

• Citizenship or residency requirements – Certain contracts may be restricted to citizens or permanent residents.

• Security clearances – Projects involving sensitive data or defense may require background checks that consider citizenship status.

• Ownership and control – Governments often want assurance that the company is not foreign-controlled, especially in strategic sectors.

• Anti-corruption and compliance rules – All bidders must comply with local laws, anti-bribery regulations, and reporting obligations.

Dual citizens may encounter additional questions about their nationality, residency, or potential conflicts of interest.

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2. How Dual Citizenship Can Affect Eligibility

a. Restrictions on Foreign Ownership

• Some governments limit foreign ownership or control of companies bidding for contracts.

• Dual citizenship may trigger extra scrutiny to ensure compliance with ownership rules.

• Example: Defense contracts or critical infrastructure projects often require majority domestic ownership.

b. Security and Background Checks

• Dual citizens may be subject to more rigorous vetting for contracts involving sensitive information.

• Certain countries may have additional requirements to mitigate perceived risks of dual loyalty.

c. Disclosure Obligations

• Bidders may need to disclose all citizenships and residency statuses.

• Failure to provide complete information can lead to disqualification or legal penalties.

d. Potential for Conflicts of Interest

• Governments may assess whether a dual citizen has connections to foreign entities that could influence the contract.

• Transparency and proper reporting are essential to avoid conflicts of interest.

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3. Industry-Specific Considerations

The impact of dual citizenship varies by industry:

1. Defense and Security

• Highly regulated; dual citizens may face significant restrictions or be disqualified.

• Security clearance processes are strict and consider foreign ties.

2. Technology and Data Services

• Contracts involving personal data, national infrastructure, or cybersecurity may have nationality-based restrictions.

• Dual citizens must demonstrate compliance with data protection and national security laws.

3. Infrastructure and Construction

• Some contracts are reserved for domestic companies or require joint ventures with local partners.

• Dual citizens may be allowed to bid if they meet ownership and operational requirements.

4. Healthcare and Pharmaceuticals

• Government contracts often involve strict regulatory compliance; foreign ownership may be scrutinized.

• Dual citizens may need to show adherence to local licensing and manufacturing standards.

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4. Practical Challenges for Dual Citizens

a. Complex Documentation

• Bidding processes may require disclosure of multiple passports, residency documents, or tax records.

• Governments may request additional verification to ensure eligibility.

b. Extra Legal and Compliance Costs

• Dual citizens may need legal counsel to navigate ownership rules, citizenship requirements, and reporting obligations.

c. Longer Approval Times

• Vetting and security clearance processes can take longer for dual citizens.

• This can delay contract awards and affect project timelines.

d. Risk of Disqualification

• Incomplete or inaccurate disclosure of citizenship or foreign ties can result in disqualification or legal consequences.

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5. Strategies to Overcome Barriers

1. Know the Rules Before You Bid

• Research eligibility requirements, ownership restrictions, and citizenship policies for each government contract.

• Pay close attention to industries with stricter controls, such as defense, infrastructure, or national security.

2. Disclose Citizenship and Residency Transparently

• Always provide accurate information about dual citizenship status.

• Transparency builds trust and reduces the risk of disqualification.

3. Consider Local Partnerships or Joint Ventures

• Partnering with a domestic company can help meet ownership requirements.

• Joint ventures may allow dual citizens to participate in contracts while complying with local laws.

4. Engage Legal and Compliance Experts

• Specialized counsel can guide you through disclosure, eligibility, and bidding procedures.

• They can also help you structure your company to meet domestic ownership requirements without losing control.

5. Explore Indirect Contracting Opportunities

• If direct bidding is restricted, consider subcontracting, alliances, or consortia with eligible domestic companies.

• This allows you to participate in projects without violating ownership rules.

6. Maintain a Strong Compliance Framework

• Develop internal policies for anti-corruption, data protection, and conflict-of-interest management.

• A strong compliance record increases your credibility and can reduce scrutiny.

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6. Real-World Examples

Example 1: Defense Contract in the U.S.

• A dual U.S./Canadian citizen owns a tech company.

• Direct bidding on defense contracts requires U.S. ownership.

• Strategy: create a U.S.-based subsidiary with majority U.S. ownership while maintaining the parent company abroad.

Example 2: Infrastructure Project in Europe

• A dual EU/non-EU citizen wants to bid on a construction project in France.

• French law requires majority French ownership for certain contracts.

• Strategy: partner with a French company through a joint venture to meet requirements.

Example 3: IT Services in Africa

• A dual citizen wants to bid for a government IT services contract in Kenya.

• The contract allows foreign ownership but requires full disclosure and local tax compliance.

• Strategy: ensure all documents are transparent, work with a local lawyer, and comply with local employment and tax laws.

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7. Key Takeaways

• Dual citizenship can create additional scrutiny or barriers when bidding for government contracts abroad.

• Restrictions vary by industry, with defense, security, and critical infrastructure sectors being the most stringent.

• Transparency, legal compliance, local partnerships, and strategic structuring are critical for success.

• Understanding the rules, disclosing dual citizenship, and leveraging professional guidance increases your chances of winning contracts while avoiding legal risks.

By carefully navigating citizenship requirements, ownership rules, and compliance obligations, dual citizens can still access lucrative government contracts abroad. With the right strategies, transparency, and local partnerships, you can overcome barriers and unlock growth opportunities in foreign markets.

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