It goes beyond that. OCT just published a thread on flag theory. Ideally, you would plant each flag in a separate country. If you get sued in your country of residence (i.e., in your legal residence flag), your business, asset, and banking flags are all protected in other countries. Worst case scenario, you use your passport (citizenship flag) to leave the country and simply abandon your legal residence flag -- and then find a new legal residence (ideally, you already have more than one legal residence,︀ aside from the one that you have that stems from your passport).
I read an︁ interesting story once about a guy who rented a car in a foreign country. The︂ car was wrecked, through no fault of his own, but the police confiscated his passport︃ and stated that they would hold it until he paid for the entire cost of︄ the car. He simply got on a bus to the nearest country and then used︅ his second passport to cross the border and leave the country. The more options, the︆ better off you are.