What is residency?
Residency is a legal status that allows a foreign national to live in another country. It can be for a defined period or permanently, depending on the type of residence permit granted.
Individuals are allowed to live in that foreign country, access essential services, and, in many cases, work or study.
Unlike citizenship, residency does not offer full political rights and broader travel rights.
There are two main types of residency:
- Temporary residency: Granted for a limited period. It must be renewed and usually comes with conditions, such as minimum-stay requirements. It can lead to permanent residency after a few years, depending on the country.
- Permanent residency: Allows individuals to stay in a country indefinitely. Permanent resident status offers many of the same day-to-day rights as citizenship, such as access to healthcare, education, and property ownership.
In countries such as Portugal, Spain, and Italy, temporary residency can lead to permanent residency, which, in turn, can lead to citizenship through naturalization.
What is citizenship?
Citizenship is the highest form of legal status in a country. It grants a person full political rights, duties, and protection within a country.
Citizens can obtain a national passport, participate in local elections, hold public office, and receive consular protection abroad.
There are several ways to obtain citizenship, including by birth, descent, marriage, and naturalization. Some countries, such as Antigua & Barbuda, Dominica, and Grenada, offer Citizenship-by-Investment (CBI), which allows foreign nationals to obtain citizenship in exchange for a significant financial contribution.
Unlike residency, citizenship is permanent (unless revoked or renounced), and provides a significantly higher level of protection and mobility.
What are the main differences between residency vs citizenship?
The main difference between residency and citizenship is the level of rights and legal status they provide. While residents can legally live in a country, citizens have full rights, including the ability to obtain a national passport, vote, and receive full legal and consular protection.
Here are the top ways in which these statuses differ:
01/ Rights
Residents can live and work in the country either temporarily or permanently. They have access to education, healthcare, and other public services.
A citizen has full rights in the country. They can acquire a national passport and receive consular protection. In countries such as the US, UK, Canada, Australia, Germany, Ireland, Italy, and Greece, citizenship can also be automatically passed on to future children.
02/ Global mobility
Having residency in another country does not give you the same travel rights as having citizenship.
Residency can give you extra travel benefits within certain regions. For example, if you have residency in a Schengen country like Portugal, you can travel freely throughout the area’s 29 countries without needing additional visas.
However, outside that region, your travel rights still depend on your passport, not your residency.
Citizenship status gives you the right to a second passport, which allows for visa-free travel to a certain number of countries, potentially offering stronger global mobility. For example, a Brazilian citizen has access to 108 countries. If they acquire a Swedish passport, which ranks highest on our Global Passport Index, they will have visa-free access to 128 countries.
03/ Civic and military obligations
Residents don’t have national civic or military duties. Citizens may have obligations like jury duty or military service (depending on the country), and they must follow all national laws, including taxes and political participation where required.
04/ Duration
Temporary residency has a limited duration, set by each country’s rules. In countries such as Portugal, for instance, temporary residence permits are valid for 2 years and can be renewed for an additional three.
Citizenship is permanent for life, and can only be revoked under specific circumstances, such as fraud.
05/ Tax obligations
In most countries, tax obligations depend on tax residency, not citizenship. This applies to European countries, such as Spain, Portugal, France, and the UK, as well as Canada, Australia, and Mexico.
So, once you become a tax resident of those countries, you are taxed on your worldwide income there, while non-residents are usually taxed only on income from that country
Only the United States and Eritrea apply citizenship-based taxation, requiring citizens to file tax returns regardless of their country of residence.
Residency vs Citizenship by Investment
When it comes to residency and citizenship-by-investment programs, there are also differences.
Residency by investment allows foreigners to obtain a residence permit in a foreign country through investments such as real estate, business creation, or government bonds.
With a residency permit, foreigners and their immediate family members, such as children and spouses, may live, work, and study in that country.
Also known as Golden Visas programs, residency-by-investment is not a direct route to citizenship. However, a Golden Visa may lead to naturalization, provided the requirements are met.
Citizenship by Investment, on the other hand, grants immediate citizenship and a passport. Countries such as Dominica, St Lucia, and Turkey offer this route.
How Can Global Citizen Solutions Help You?
Global Citizen Solutions is a boutique migration consultancy firm with years of experience delivering bespoke residence and citizenship by investment solutions for international families. With offices worldwide and an experienced, hands-on team, we have helped hundreds of clients worldwide acquire citizenship, residence visas, or homes while diversifying their portfolios with robust investments.
We guide you from start to finish, taking you beyond your citizenship or residency by investment application.
