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. It can also be very simple. For example, if you buy a house for sale in Portugal that is above the investment minimum, then you may be eligible for the Golden Visa. 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.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 PR by investment (permanent residency through investment) 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.
You have probably come across countries that offer citizenship by investment programs. In general, they do not have requirements in place which means that applicants have to reside in the country prior to the application. However, there are some countries that offer residence by investment programs, instead of citizenship by investment programs.
Residence by investment programs requires the foreign national to invest in the country in order to reside there. The individual is then able to secure residence in the country and, after a certain amount of years (this will differ for each country program), they are able to apply for permanent residence. Permanent residence, in turn, is subject to certain conditions and individuals can acquire citizenship by naturalization should they wish and if they meet all the requirements. Some countries will have a language test and other criteria.
In essence, residency by investment programs run alongside citizenship by investment programs, where permanent residence and citizenship by naturalization is possible, but it takes time, requires a physical residence in the country for a certain time period, and a permanent residence card.
What is temporary and permanent residence?
Temporary residence is a status that is given to a foreign citizen that grants them the right to stay in a country for a limited period of time. It can either be in the form of a temporary residence permit or a visa, and allows the temporary resident to legally reside, work, study, or do business in the country, depending on the type of visa the individual obtains, without them becoming a full citizen. A residence by investment program is another way to obtain temporary and permanent residence.
A temporary residence permit is usually granted for a set period of time (usually one or two years) and can then be renewed annually or every two years. After a period of legal and continuous residence in the country, which is often a five-year period, a foreign investor can apply for a permanent residence permit, as long as they fulfill all the requirements.
Permanent residence status provides foreign citizens almost identical rights to those of its citizens, with the exception of voting in elections. Permanent residents can reside, work, and study with no time restrictions.
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:
- 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’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 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.
The commercial center of the world also offers a program to secure residence. The US EB5 Visa allows you to gain residence and, ultimately, citizenship by naturalization. The requirements are twofold. Firstly, you will need to make a lawful capital investment in an enterprise that is equal to or more than $1.8 million (or $900,000 if investing in a Targeted Employment Area ‘TEA, this is for projects in areas located in rural areas or that have a high unemployment rate, with a national unemployment rate of 150%). Secondly, you will need to plan to create or save ten permanent full-time job positions for qualified US workers. Advantages include the right to enter and leave the US as a permanent resident, being able to work, travel, and live anywhere in the US, and a path to citizenship is possible for yourself and your family.
For more information, you can consult our PR USA EB5 immigrant investor guide.
Residence vs citizenship: Understanding how citizenship by investment works
Becoming an economic 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.
- 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.
- 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.
Global Citizen Solutions: How we can help
Global Citizen Solutions is a boutique global citizenship and residence advisory firm, providing citizenship and residency solutions to international clients. Contact us today to begin your journey to obtain global citizenship.
Some of the citizenship or PR by investment countries that we currently offer programs for are the following:
- Malta Citizenship by Naturalization for Exceptional Services by Direct Investment
- The Malta Permanent Residence Program
- Golden Visa Portugal
- Golden Visa Spain
- Golden Visa Greece
- Golden Visa Ireland
- Turkey Citizenship By Investment
- Dominica Citizenship By Investment
- St Lucia Citizenship By Investment
A comparison of the Spain and Portugal programs can be found here. Portugal real estate is a very attractive option. The Golden Visa Portugal has become one of the most popular residency by investment programs since it was introduced in 2012.