Residence vs. Citizenship: Which is the better option?

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Living in multiple countries is a real possibility in today’s interconnected world, thanks to several government schemes that welcome qualifying migrants. Called residency by investment (RBI) and citizenship by investment (CBI) programs, these government schemes enable investors, business owners, and families alike to acquire legal residency or citizenship abroad in mere months. They can also be straightforward in their requirements.

In this guide, we aim to outline the difference between residence vs. citizenship, so that you may gather enough information to facilitate your decision and step closer to procuring global citizenship.

Residence Permits: An Overview

Residence permits are government-issued documents that enable individuals to reside in the respective nation for a specified period. The status of a residence permit depends on the individual’s circumstances, and must be regularly renewed to maintain their permit’s validity.

Holders of a residence permit are usually granted the right to enter and exit the respective country at any given time, purchase real estate property, access the nation’s private and public healthcare systems, and benefit from its education systems.

Those who acquire a permit from a European Union member state will be allowed entry and visitation rights across other Schengen countries for a period up to 90 days every 183 days without needing a visa. Individuals may obtain a residence permit via a route of marriage, study, work, or through RBI schemes – otherwise known as Golden Visas.

Temporary versus permanent residence permits

Both temporary and permanent resident permits grant foreign individuals the right to reside in a specific nation. The former has a limited validity period, while the latter is lifelong. By acquiring either of the permits, individuals may benefit from certain rights, including the right to live, travel, study, work, and conduct business in the respective nation without acquiring citizenship there.

Temporary residence permits are usually valid for one or two years. Permits can be renewed before expiration, provided the individual continues to meet the respective government’s eligibility requirements. Should the individual maintain their permit status for an extended period, usually five or seven years, they may qualify for lawful permanent resident status after that.

Permanent residents enjoy extensive rights in the respective nation, almost identical to the rights of its citizens. The only rights permanent residents are not allowed to practice are the right to place their vote in federal and local elections, or hold public office.

While permanent residence status is lifelong, holders must renew their resident permit every five years to keep their legal resident status. Depending on the nation and its stipulated requirements, a permanent residence permit can lead individuals to citizenship by naturalization in a few years, should they wish to acquire citizenship in that particular country, or hold dual citizenship status.

Residency by Investment (RBI)

Residency by route of investment is when a foreigner obtains permanent residency (PR) in a foreign land after making a significant investment in its economy, and meeting specific government criteria. The process is not only faster than the traditional integration route, but is also much more effective, and comes with several advantages.

Several countries offer temporary and permanent resident status by route of investment to qualifying individuals, which later leads them towards citizenship by naturalization after a certain amount of years. Eligibility requirements stipulate certain conditions, and may include language and cultural integration tests, depending on the respective government’s requirements.

Reasons to Apply for Residency by Investment

Residency by route of investment opens doors through which individuals can enjoy increased global mobility. Holding resident status allows the bearer to enjoy a handful of advantages for as long as their permit is valid, which creates endless reasons for anyone to invest in these schemes.

Access to better opportunities in education, employment, and healthcare

Facilitated ease of running an international business enterprise

Advantages of tax-friendly regimes, and exemptions

Access to a favorable culture and way of life

Fallback plan in times of economic instability, or political and social unrest

Which countries offer RBI schemes?

Several countries offer RBI programs to attract foreign direct investment to nourish their economies. Each government has set regulations and an assigned agency that monitors and approves applications. In Portugal, for example, the government’s border agency (SEF) is responsible for issuing the Golden Visa in Portugal. In Malta, the Community Malta Agency (CMA) is responsible for administering the Malta residency by investment Golden Visa.

Other examples of countries that offer residency programs include:

Bulgaria
Canada
Ireland
Cyprus
Spain
The UAE
The US
The UK

Each country has varying sets of requirements that applicants must fulfill. For example, some countries have a physical stay requirement, wherein you must visit and reside in the host country for a certain number of days or months out of every year to receive permanent residence status and maintain the validity of your permanent resident card. Other nations have additional language and cultural tests that applicants must pass to be considered “integrated.”

Some of the more generally found requirements include:

Having a clean criminal record
Clearly showing the legal source of funds that are to be invested in the host country
Investing in a government-approved option, such as government bonds, or real estate in low-density areas

Below are a few examples of countries where this is arranged, including their terms.

Brazil

Brazil’s RBI program is relatively inexpensive, and requires a minimum real estate investment of around €120,000 – or $126,000, respectively. Once this minimum investment is met and you arrive in Brazil, you can immediately acquire your permanent residency permit.

The application process usually takes around three to four months; however, to maintain the validity of your resident permit, you’ll have to visit Brazil for at least 30 days out of every year under this investment route. Do note that other investment options are available; however, they require a more extended stay requirement of 183 days per year.

Malta

Malta boasts many potential benefits to foreign investors due to its Mediterranean lifestyle, high standard of living, and political stability, among other things. Its RBI scheme offers a handful of advantages, including tax benefits, and family inclusion.

To qualify for the scheme, you’ll have to demonstrate proof of a clean criminal record, be in good physical and psychological health, and pose no threat to Malta’s national security. Moreover, you’ll have to place at least €110,000 in a series of investments in qualifying real estate, government donations, and philanthropic donations.

Residency permits are usually issued within 12 months of lodging your application. You’ll have to pass a stringent due diligence process, and maintain your investments to keep the validity of your residency permit.

The US

The world’s commercial center also offers a program to secure permanent resident status. The EB5 Investor Visa in the US grants successful applicants their green card holder status, which may lead them to eventual citizenship by naturalization. Qualification requirements are twofold:

Make a lawful capital investment in an enterprise equal to or over €1.7 million – or $1.8 million respectively. The minimum investment sum goes down to around €870,000 – or $900,000, respectively – if placed in a Targeted Employment Area (TEA), which is often set for projects in rural areas with a comparatively high unemployment rate.
Start a business that will create or save ten permanent full-time jobs for qualified US workers.

The advantages of holding the EB5 visa USA permanent resident permit include the right to enter and exit the US as a permanent resident at any given time, and the right to travel, study, and live anywhere in the nation. A path to eventual citizenship is possible for you and your family, should you all abide by government requirements.

The Definition of Citizenship

Citizenship is a title a nation grants to those who meet specific standard requirements. It comes with significant benefits and rights, including the right to access the respective nation’s public and private healthcare; benefit from its education systems; travel visa-free to its allied nations; vote in its government elections, and even hold public office.

A citizen is a legitimate member of a country and any union it may be a part of. Once obtained, citizenship status cannot be revoked, nor does its “validity” need to be renewed. The requirements for being recognized as a citizen differ from one country to the other.

Depending on the laws of a nation, citizenship can be granted to individuals who:

Have been born in that nation
Come from a lineage of ancestry originating in that nation
Have married one of its citizens and can prove their relationship has been established for three or more years, depending on that nation’s requirements
Have migrated to and resided in that nation for a period of five to ten years, and have passed the adequate citizenship tests
Have sought refuge in that nation due to war crimes, political instability, hate crimes, or otherwise
Have invested a significant financial sum in that nation’s economy, and met regulatory criteria under one of its residency or citizenship schemes

Residence versus Citizenship: Understanding How Citizenship by Investment (CBI) Works

As previously mentioned, resident status is granted to an individual who holds the legal right to live, work, or study in a particular locality of a nation, whether a specific town, city, state, or otherwise. Residency can be temporary or permanent, depending on the individual’s circumstances. It may be obtained via a route of investment, and will always have to be renewed to maintain its validity, with certain conditions being met.

Citizenship, on the other hand, is a title granted to those who essentially “pledge allegiance” to a specific nation after having placed a significant investment in it, whether it be an extensive amount of years of tax residency, or a large financial sum via the respective nation’s CBI scheme. Citizenship provides the individual with privileges that transcend those of residents, and can be pretty advantageous to hold depending on the country in question and its political alliances.

While citizenship can be granted through many routes, provided certain conditions are met, there is one route to citizenship in which the individual gains access to more privileges than the average citizen. Economic citizenship, or citizenship by investment, grants qualifying individuals, investors, and their immediate family members economic advantages that are solely tied to their route of investment. In other words, economic citizenship often grants individuals a revenue stream on top of dual citizenship status.

To qualify for and obtain citizenship by route of investment or naturalization for an exceptional financial contribution to the respective nation’s economy, the individual and their family must meet the government’s eligibility requirements. Namely, they must make a significant financial contribution to the nation’s sociocultural or economic advancement, and maintain that investment for the stipulated period, among other conditions.

As several countries offer economic citizenship – each with their unique investment routes, minimum investment thresholds, and list of advantages – you may want to hold a citizenship by investment comparison to know which program is the most suited to your personal needs, including your business or financial objectives.

Residence versus Citizenship: Pros and Cons

There are similar pros and cons to residency and citizenship programs.

Pros

You may enjoy social services and privileges from both your adoptive country, and country of origin.
You may have the right to own property in both countries.
You may have the right to extend your residency and citizenship status to your immediate or nuclear family.
You may benefit financially by yielding a return on your investment, should you have chosen a qualifying investment route.
You may travel visa-free across the respective nation’s allied countries.

Depending on the terms of the countries involved, you may maintain your existing citizenship and become a fully-fledged dual citizen.

Cons

You might have to pay taxes in both your country of origin and your adoptive country.
You may face certain instances where the laws of your country of origin will clash with those of your adoptive country. A good example is the different legal views of Nigeria and the US on LGBTQ+ rights. Dual citizens with passports from both countries, or any governments that may have a conflict in legal interest, will have to manage their way around those conflicting sets of laws.
The cost of securing residency or citizenship by route of investment, including the time and effort required to succeed in your application for either scheme, is often long if this process is pursued individually without expert consultancy and legal support.

Residence versus Citizenship: Which is the better option?

When comparing citizenship and residency by route of investment, it’s not exactly fair to assume that one option is ‘better’ than the other, because their advantages depend on many contributing factors, including individual circumstances.

It’s essential to consider different factors.

When considering which option suits you best, you need to take into account factors such as family reunification, personal interests, terms of the countries involved, your worldwide income, tax benefits, the lifestyle provided, business enterprise opportunities, and so on.

Residency permits may expire unless certain conditions are met.

Residency by investment differs from citizenship by investment, as the former refers explicitly to a person’s visa status. RBI is issued for a particular period, after which it stops being valid or expires unless renewed.

Citizenship allows you to carry a second passport.

Being a legally recognized citizen allows you to carry the passport of that respective country, which is ultimately a massive benefit for those who require constant international travel for leisure or business purposes.

Ordinarily, you might assume that economic citizenship is the proper route, and you may as well be right. However, if your country of origin has better living conditions than your adoptive country, or you may have to renounce your original citizenship, it might be better to opt for residency by route of investment.

Residence versus citizenship: which of the two should you invest in?

The advantages of both citizenship and residency by investment programs are numerous. Taking either step can mark the beginning of a new life for you and your immediate relatives, including your unmarried children. You all enjoy benefits through both programs that might ordinarily pass you by as a “non-global citizen.”

Through these investment programs, individuals and investors alike can save a lot of stress by avoiding continuous visa applications, and high taxation regimes for as long as they are considered qualified.

Regardless of your preferred choice, it is highly advised that you consult with experienced residency and citizenship migration lawyers, and tax accountants, to assess which of the two routes is most suited to your lifestyle and business objectives.

Global Citizen Solutions: How We Can Help

Global Citizen Solutions is a boutique immigration consultancy firm that provides citizenship and residency by investment solutions to international clients and their family members. Some of the CBI and RBI programs that we currently work with include the following:

Frequently Asked Questions about Residence versus Citizenship

Residence versus citizenship, are they the same thing?

Residency and citizenship are different. Residency programs enable individuals to legally reside in a nation, with a pathway to citizenship possible after a set number of years. Citizenship programs would allow individuals to directly acquire a second passport, sometimes in as little as three months.

What does residency by investment mean?

RBI provides the qualifying investor with a residency permit in the respective nation where they have placed their investment. The individual must first meet the program’s qualifying requirements, and abide by the nation’s eligibility criteria to maintain the validity of their permits.

What does citizenship by investment mean?

CBI programs allow the primary applicant and their qualifying family members to acquire a second citizenship and passport, in exchange for a significant financial investment in the nation’s sociocultural or economic development.

Residence versus citizenship, which investment program should I pick?

It depends on your unique situation. If you want to procure a second passport in a matter of months, consider citizenship by investment. If you prefer holding an alternative residence in a nation without the commitment of citizenship, consider residency by investment.

Why do people invest in permanent residency?

There are many advantages of investing in permanent residency. You may live, work, and study in the country you choose, plus you’ll have increased mobility and financial and personal freedoms. Additionally, your immediate relatives qualify in most cases.

Who is eligible to apply for a residency program?

Eligibility requirements differ from one nation to the other; however, the primary conditions that need to be met are: having a clean criminal record, adequate health insurance, a legal source of funds, placing the minimum qualifying investment, being a foreign national, and passing biometric and regulatory checks.

What is investment PR?

Investment PR is when an individual acquires legal permanent resident status after placing a significant financial contribution to a nation’s economy under its RBI scheme. It provides foreign citizens with similarly equal rights to those of its natural citizens, and is lifelong.

What comes first, residency or citizenship?

Residency always comes first. However, the duration of holding residency before qualifying for citizenship differs from one citizenship program to the other, and from one route of investment to the other.