Residence vs. Citizenship: What’s the Best Option?

In today’s interconnected world, living from country to country is a very real possibility, thanks to multiple government schemes that welcome migrants. Called residency by investment and citizenship by investment programs, these schemes enable investors, business owners, and families alike to acquire legal residency or citizenship abroad in the span of months.  In this guide, we aim to answer the question: residence vs citizenship: what’s the best option? Hopefully, you’ll be left with enough information to facilitate your decision and step closer toward procuring global citizenship.

What is residency by investment?

This is simply the process whereby a foreigner obtains permanent residency in a foreign land in exchange for an investment in the country’s economy. This process is not only quicker than the traditional method of applying; it is also much more effective.

Check out the most popular residency by investment schemes in Europe.

Reasons to apply for residency by investment

There are many reasons why individuals invest in residency.

Key incentives include:

  • Access to better opportunities in education, employment, and healthcare
  • Easier to run a business enterprise
  • Tap into tax-friendly programs
  • A love for the culture and way of life

Residency by investment opens up doors through which individuals can enjoy increased global mobility throughout the world.

Residency is a visa status that allows the bearer to legally reside in the host country without being a citizen. As a resident, you have the liberty to live, work, attend school, and access health care in the host country.

Live in a safer place

People who live in countries where there is war or any form of social unrest can ensure that they are safe through a residency-by-investment scheme in a safer, more stable part of the world. Not only will this ensure their safety, but it would also open them up to a world of new opportunities perhaps not previously presented to them.

Which countries offer this program?

A lot of countries offer residency by investment programs in a bid to attract foreign direct investment. For example, in Portugal, its border agency called SEF are responsible for issuing Golden Visa, a form of legal residency program for qualifying investors.

Some other examples of countries that offer residency programs include:

  • Bulgaria
  • Canada
  • Portugal
  • UAE
  • USA
  • and the UK

Each country has varying sets of requirements that applicants must fulfill, for example, some countries require that you must have traveled a number of times to the host country while others don’t.

Some of the more generally found requirements include:

  • Having a clean criminal record.
  • Clearly showing the legal source of the funds that are to be invested into a host country.
  • Investing in a government-approved option such as; real estate or government bonds.

Let’s take a look at a couple of examples of countries where this is arranged and their terms:

Brazil

Brazil’s residency-by-investment program is relatively inexpensive and it requires a minimum investment of $160,000. Once this minimum investment is met, then you can acquire your permanent residency visa.

Malta

Malta boasts of a lot of potential benefits to foreign investors due to the Mediterranean lifestyle of the locals and the relatively high standard of living. Apart from not having a criminal record; you also need to be in good health to be considered. You need to invest at least €690,000 + costs in the government, the national development and social fund, and property. You must maintain these investments and your residency, as well as pass all vigorous due diligence processes to succeed in acquiring citizenship by naturalization. For more information, check out our guide to Malta Citizenship By Investment here.

Residence vs citizenship: Understanding how citizenship by investment works

Becoming a citizen of a country can either be achieved traditionally by marriage or staying in the country for several years and personally applying as an individual. Citizenship by investment goes a notch higher than residency by investment; the former allows you to enjoy the same benefits as other citizens of the host country. Often at times, acquiring citizenship by investment means that you will become a dual citizen and have passports for both your country of origin and the country in which you are investing in.

For more information on what different programs have to offer, check out our citizenship by investment comparison guide here.

Residence vs citizenship: Pros and Cons

There are similar pros and cons when it comes residence vs citizenship. Here we will outline both the pros and cons and then give a short explanation to account for their differences thereafter.

Pros

  • You enjoy social services and privileges from both countries;
  • This allows you to enjoy voting rights in such a country;
  • You have the right to own property.

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

Cons

  • You might have to pay taxes to your country of origin and also pay tax to your adopted country.
  • There are certain instances when the laws of your country of origin will clash with those of your adopted country. A good example of this is the US and Nigeria where both countries have different laws concerning LGBTQ rights. A dual citizen with passports from both countries will face a conflicting set of laws.
  • The cost of securing residency or citizenship by investment as well as the time and effort required is often long if this process is pursued individually without expert consultancy and legal support.

Residence vs citizenship: Which is the better option?

When comparing residency and citizenship by investment it’s not exactly fair to assume that one option is ‘better’ than the other because it depends on certain factors and individual circumstances, and everyone is different in their personal requirements.

It’s important to consider different factors

When considering which option suits you better, you need to consider factors such as; family, personal interests, terms of the country involved, income, lifestyle, business enterprise opportunities, and so on. Just for example, if you are someone who is interested in the political state of where you reside, you would most likely want to vote in your host country, therefore citizenship by investment is the more suitable option for you.

Residency permits may expire if certain conditions aren’t met

Residency by investment differs from citizenship by investment because the former specifically refers to a person’s visa status. Residency by investment is issued for a particular period of time after which it stops being valid and/or expires.

Citizenship allows you to carry a second passport

Another important difference to take note of is the fact that being a legally recognized citizen allows you to carry a passport of such a country – a huge benefit for those that require constant travel for work or business.

Ordinarily, you might want to assume that citizenship by investment is the way to go and you will probably be right. On the other hand, if your country of origin has better living conditions than your adopted country then it might be better to opt for residency by investment.

Residence vs. citizenship: what should you invest in?

The advantages of both residency by investment as well as citizenship by investment are numerous. Taking either step can mark the beginning of a new life for you and yours; you will enjoy travel benefits as well as other benefits that ordinarily pass you by.

Through permanent residency and citizenship investment programs, investors can save a lot of stress by avoiding visa applications.

To conclude, it’s highly advised that for the quickest and most efficient process, you consult experienced citizenship lawyers and tax accountants for expert advice before going on to make a decision. Residency and citizenship by investment may seem like a complex decision to make with regards to your specific desired investment channel, but a consultancy like Global Citizen Solutions with experience in both paths will be able to understand your personal situation; exactly what you wish to invest, how much you wish to invest and how you wish to process this investment.

Frequently asked questions about residence vs citizenship

Residence vs citizenship, is it the same thing?

Residence and citizenship are not the same things. This is one of the things that confuse expats the most. A residency program enables the person to legally reside in the country, with a pathway to citizenship possible after a set number of years. Whereas, citizenship by investment programs enables the person to directly acquire a passport, sometimes in as little as three months (depending on the program).

What does residency by investment mean?

Residency by investment allows for the obtention of a residency card in another country, in exchange for investing in the nation’s economy.

What does citizenship by investment mean?

Citizenship by investment lets you obtain a second citizenship and passport, by investing in the country’s economy.

Residence vs. citizenship, which program to pick?

At the end of the day, it really depends on your unique situation. If you like the idea of procuring a passport for yourself and your family more instantly, then citizenship by investment could be a good option. If you prefer to seek alternative residence in a nation without that added commitment, then residency by investment is for you.