What is residency?
Residency means obtaining official permission to live and work in a country other than your own, often through a residence permit or permanent residence card. It’s the first major step toward long-term settlement and, in many cases, a pathway to citizenship.
There are two main forms of residency:
- Temporary residency: Granted for a specific purpose or period, for example, employment, study, or investment. It must be renewed regularly.
- Permanent residency: Offers indefinite stay and many of the same rights as citizens, such as access to healthcare, education, and property ownership. Examples include the U.S. Green Card, the EU residence permit (long-term), or the Malta Permanent Residence Programme (MPRP).
Benefits of residency include the right to live, work, study, and access public services. Many programs also allow family inclusion, meaning dependents can join under one application.
However, residency also carries limitations. Residents usually cannot vote, hold public office, or obtain a national passport. Their status is conditional, it may be revoked for violating visa terms, committing serious crimes, or failing to meet minimum stay requirements. Maintaining compliance and renewals is therefore essential for those seeking eventual naturalization.
What is citizenship?
Citizenship represents the highest form of legal status an individual can hold within a country. Unlike residency, which is conditional, citizenship establishes a lifelong bond between a person and a state. It grants full political, social, and economic rights, as well as national identity and protection under international law.
Citizens enjoy the broadest range of benefits, including the right to:
- Hold a national passport and travel internationally with greater freedom.
- Vote in national and local elections and stand for public office.
- Access consular protection abroad from their country’s embassies.
- Receive full legal and social protection, including access to education, healthcare, and welfare.
- Pass citizenship automatically to their children in many cases.
Another key distinction in citizenship vs residency lies in security: Citizenship is typically permanent and extremely difficult to revoke, except in rare cases such as fraud or treason. Citizens also cannot be deported, giving them the ultimate stability and belonging in their chosen country.
Most countries allow individuals to obtain citizenship through one of several routes including citizenship by descent, citizenship by marriage and citizenship by naturalization.
When you get second citizenship, you can significantly enhance travel freedom, personal security, and tax flexibility. It’s also the only route that guarantees a passport and consular protection, privileges that no residence permit can offer.
What are the key differences between residency vs citizenship?
| Feature | Residency | Citizenship |
|---|---|---|
| Legal status | Permission to live in a country, usually subject to conditions. | Full legal membership in a country with a passport. |
| Document provided | Permanent residence permit or card. | National passport and ID. |
| Travel freedom | Limited. Visas often needed for other countries. | Extensive visa-free travel benefits. |
| Right to vote | No voting rights. | Full voting rights and political participation. |
| Eligibility for passport | Not eligible for national passport. | Yes, eligible for national passport. |
| Duration and security | Temporary or permanent. Can be revoked for non-compliance. | Permanent and secure. Difficult to lose. |
| Tax obligations | Tax residency often required and depends on physical presence. | Worldwide tax obligations may apply (for example, U.S.). |
| Social benefits | Partial access, varies by country. | Full access to social benefits. |
| Access to education and healthcare | Generally included for permanent residents. | Guaranteed access. |
| Ability to sponsor family | Often restricted compared to citizens. | Full rights to sponsor family members. |
| Investment options | Residency by Investment programs available (for example, Golden Visa). | Citizenship by Investment programs available (for example, Caribbean CBI). |
| Path to citizenship | May lead to citizenship after several years. | Not applicable, already a citizen. |
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Travel and Mobility: Passport vs Residence Card
When comparing residency vs citizenship, one of the clearest differences lies in global mobility, specifically, the right to travel freely using a passport versus a residence permit.
A citizen holds a passport from the country, which determines their visa-free access and overall freedom of movement. For example, EU citizens enjoy unrestricted travel, residence, and work rights across all Schengen Area and European Union member states. A strong passport, such as those ranked highly on the Global Passport Index (like the United Kingdom, Germany, Ireland and so on) offers extensive visa-free or visa-on-arrival access to countries worldwide and ensures consular protection abroad.
By contrast, a resident carries a residence permit or card tied to a single country. This document allows legal residence and re-entry but does not grant international travel privileges beyond that state’s borders. In the Schengen Zone, for instance, a residence permit from one member state (for example, Portugal or Greece) allows short-term travel to other Schengen countries for up to 90 days in any 180-day period, but not the unrestricted movement that citizenship confers.
In essence:
- A passport provides global access and long-term security.
- A residence card offers domestic rights with limited external travel.
For investors and expats seeking greater mobility, securing citizenship through naturalization or Citizenship by Investment (CBI) remains the ultimate way to achieve seamless international travel.
Tax Residency vs Citizenship
Another key difference between a resident and a citizen involves taxation. Many people assume that citizenship automatically determines tax obligations, but in reality, immigration residency and tax residency are not the same.
Most countries apply a residency-based taxation system, meaning you are taxed where you live or earn income, not necessarily where you hold citizenship. A person can be a citizen of one country while being a tax resident of another if they spend more than a set number of days there (depending on whether the country applies the 183-day tax rule) or maintain a home and economic ties.
The OECD defines tax residency through domestic law and international “tie-breaker rules” in tax treaties, which determine which country has primary taxing rights if you qualify as a resident in more than one country.
An important exception is the United States, which follows citizenship-based taxation. American citizens, even dual citizens or those living abroad, must file annual U.S. tax returns with the IRS and may owe tax on worldwide income, though credits and treaties often prevent double taxation.
For investors pursuing Residency by Investment (RBI) or Citizenship by Investment (CBI) programs, understanding tax residency is essential.
- RBI holders may establish tax residency in their new country if they relocate or meet stay thresholds.
- CBI citizens, if they don’t physically move, often avoid becoming tax residents of that country (unless they reside there for more than half the year).
Residency vs Citizenship by Investment
Both Residency by Investment (RBI) and Citizenship by Investment (CBI) programs attract global investors seeking enhanced mobility, security, and lifestyle benefits.
While each one involves making a qualifying investment, such as real estate, business, or government contribution, the key difference lies in what status you obtain and how fast you get it.
What is Residency by Investment?
Residency by Investment (RBI) programs allow foreign nationals to obtain a residence permit in exchange for a qualifying investment in the host country’s economy. This could include real estate purchases, fund contributions, or capital transfers to local businesses or government funds.
RBI schemes are designed to attract foreign direct investment while offering investors and their families the legal right to live, work, study, and travel within the country, often with access to public healthcare and education.
Well-known examples include:
- Portugal Golden Visa: Offers EU residency through investment in funds, research, culture, or job creation, with a path to citizenship after five years.
- Greece Golden Visa: Grants renewable five-year residence permits to property or fund investors, with Schengen travel privileges.
- Malta Permanent Residence Programme (MPRP): Provides permanent EU residency for investors contributing to Malta’s economy and leasing or purchasing property.
Benefits of Residency by Investment:
- Lower investment thresholds compared to Citizenship by Investment options.
- Right to live and work in the country, often with family inclusion.
- Visa-free travel within the Schengen Area for EU residents.
- A clear pathway to citizenship through naturalization after several years of legal residence.
For investors seeking a long-term relocation option with the flexibility to eventually obtain citizenship, RBI programs offer a balanced, cost-effective solution.
What is Citizenship by Investment?
Citizenship by Investment (CBI) programs grant full citizenship and a passport in exchange for a qualifying financial contribution to a country’s economy. Unlike residency programs, CBI routes typically bypass long naturalization periods and offer a faster path to full legal status.
These programs are especially appealing for investors seeking immediate global mobility, tax flexibility, and security via dual citizenship.
Examples include:
- Turkey Citizenship by Investment: Investors can obtain Turkish citizenship through real estate purchase, capital investment, or job creation, often within a few months.
- Dominica Citizenship by Investment: Offers citizenship in as little as three months through a government donation or real estate investment.
- St. Lucia Citizenship by Investment: Provides multiple investment options, such as government donation, real estate, or bonds—that lead to full citizenship.
Benefits of CBI:
- Immediate citizenship and the issuance of a national passport.
- Access to visa-free travel in many countries, often over 140 destinations.
- Consular protection, diplomatic rights, and political protections abroad.
- Lower exposure to revocation or deportation risk compared to residency status.
- Potential tax, estate, and asset protection advantages based on country.
Main differences
| Feature | Residency by Investment | Citizenship by Investment |
|---|---|---|
| Status granted | Long-term or permanent residency | Full citizenship and passport |
| Investment threshold | From €250,000 (approx. US $260,000) | From US $105,000 |
| Path to citizenship | After 5 to 10 years via naturalization | Immediate upon approval |
| Processing time | Months for residency; years for citizenship | 3 to 6 months for full citizenship |
| Physical presence | Usually required for naturalization | Generally not required |
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Citizenship by Investment programs and unlock global mobility as well as tax and lifestyle benefits.
Tax Residency vs Citizenship
Another key difference between a resident and a citizen involves taxation. Many people assume that citizenship automatically determines tax obligations, but in reality, immigration residency and tax residency are not the same.
Most countries apply a residency-based taxation system, meaning you are taxed where you live or earn income, not necessarily where you hold citizenship. A person can be a citizen of one country while being a tax resident of another if they spend more than a set number of days there (depending on whether the country applies the 183-day tax rule) or maintain a home and economic ties.
The OECD defines tax residency through domestic law and international “tie-breaker rules” in tax treaties, which determine which country has primary taxing rights if you qualify as a resident in more than one country.
An important exception is the United States, which follows citizenship-based taxation. American citizens, even dual citizens or those living abroad, must file annual U.S. tax returns with the IRS and may owe tax on worldwide income, though credits and treaties often prevent double taxation.
For investors pursuing Residency by Investment (RBI) or Citizenship by Investment (CBI) programs, understanding tax residency is essential.
- RBI holders may establish tax residency in their new country if they relocate or meet stay thresholds.
- CBI citizens, if they don’t physically move, often avoid becoming tax residents of that country (unless they reside there for more than half the year).
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.
