The modern world is moving towards globalization. More and more wealthy people who want to ensure their safety and security of their assets, as well as freedom of movement around the world, are looking for a possibility to obtain another country’s residence permit or citizenship. And many countries are meeting them halfway by establishing special citizenship-by-investment programs, and simplifying the terms for issuing a residence permit or passport in exchange for investment.
How to obtain citizenship by investment?
Having a second passport has long become a fashionable trend among the wealthy and famous. Famous poker player Adam Bilzerian, for example, is one of celebs who officially confirmed that he has second citizenship. Bilzerian left the US in 2007 and invested in citizenship of St Kitts and Nevis.
In addition to prestige, dual citizenship also has a purely practical purpose. Given the unstable economic and political situation in many countries, the second passport is a kind of guarantee of stability for its owner. If something goes wrong, and the history of recent years is full of such examples, a second motherland can become a second home base and ensure not only a quiet life for the new citizens, but also the safety of their assets. In addition, tax incentives apply in most countries that accept foreign investors, and the most comfortable conditions have been set up for conducting business.
Another undeniable advantage of a second passport is the ability to move around the world freely. Nations that provide citizenship by investment, as a rule, provide visa-free entry to 100-150 countries, including the EU and the UK. In addition, long-term visas for the USA and Canada can be obtained much easier.
The most active investors are attracted to particular countries in Europe (Malta, Cyprus, Portugal, Greece, etc.) and the Caribbean region (Saint Kitts and Nevis, Antigua and Barbuda, Dominica, Grenada and Saint Lucia, etc.).
The citizenship by investment programs allow one to obtain either full citizenship or a residence permit. What is the main difference between these two options?
A residence permit by investment in an EU country, as a rule, does not give its holder the right to work (unless a permit is specially issued to that effect), nor does it offer access to state insurance and free education for children. By contrast, a second passport, which is to say full citizenship, officially allows one to work in any EU country and take advantage of the benefits of a change in tax residency.
In addition, the European residence permit allows one the opportunity to reside all year round in the country that has granted such status, and in other Schengen states for 90 days per year.
Furthermore, in some countries, one can first apply for a residence permit and then apply for citizenship. For example, in Portugal, if one has a residence permit, one can get permanent residence after 5 years, and a passport after 6 years. However, in some countries you will additionally have to take a language test.
Caribbean countries are more welcoming to applicants for citizenship. In most of these countries, a second passport by investment can actually be obtained within 2-5 months. It is not necessary to live in, or even travel to, that country, neither before nor after the issuing of your passport. In Europe, there are similar conditions for applicants for residence permits: for example, to extend the residence permit in Portugal, it is only necessary to live in the country for just one week per year.
But the costs for those wishing to obtain a second citizenship vary greatly, both in Europe and in the Caribbean. For example, in Cyprus, the program for acquiring citizenship by investment requires investments of a minimum of 2 million euros plus taxes and duties, in Malta of 880,000 euros, and in Bulgaria of a bit over 1 million euros.
Antigua and Barbuda, Dominica and Saint Lucia are willing to issue a second passport for investments of only $100,000. In Saint Kitts and Nevis, the minimum amount of investment varies from $150,000 to $400,000, depending on the option chosen (donations to the state or real estate investment). The minimum cost for obtaining a passport for Vanuatu (Oceania) is $182,000.
Comparison of Caribbean and European passports
How much does a European passport cost?
In Europe, residence permits and citizenships by investment are issued by several countries: Portugal, Bulgaria, Malta, and Cyprus. For several years, Montenegro has also been trying to launch such a program.
For example, in Malta, in order to qualify for permanent residency, it is enough to buy government bonds for 250,000 euros, to buy real estate worth at least 270,000 euros ,or to rent property for at least 10,000 euros per year. The status is granted within 3-5 months. In Portugal, to obtain a residence permit it is enough to invest at least 350,000 euros in real estate (the procedure for obtaining a residence permit takes 4-7 months). In Greece, one can buy real estate for 250,000 euros and obtain a residence permit in 2-3 months.
The purchase of a full-fledged European passport, as a rule, is much more expensive than a residence permit.
The most widespread and popular programs for obtaining citizenship by investment are Maltese and Cypriot programs. The trend is not surprising because these countries offer the most comfortable conditions for relatively little money.
For example, Malta’s passport allows its holder a visa-free entry, or visa upon arrival, in 167 countries (including the EU, Australia, the US, the United Kingdom, etc.). In addition, it provides all the benefits of EU citizenship: the right to work, study, conduct business, tax incentives, etc. The process of obtaining a second citizenship in this country is strictly confidential, while the applicant doesn’t necessarily have to stay in Malta.
Maltese citizenship by investment
For one investor, the Maltese passport will cost 1.158 million euros if buying real estate, and 888,200 euros if renting it.
- The non-refundable part in the first case is 658,200 euros, while in the second case it is 738,200 euros.
- For a family of two adults and two children who are 10 and 20 years old, the total budget will vary from 999,700 to about 1.3 million euros.
- For a family of 4 adults and two children who are 10 and 20 years old, the amount will be from 1.11 million to 1.39 million euros.
- For much less money – 320,000 euros – it is possible to apply for a residence permit, with which it is possible to get citizenship after 10 years.
Cyprus citizenship by investment
More and more foreign investors are choosing the citizenship of Cyprus. Until recently, this country, in addition to free movement around the world, and political and economic stability, gave its citizens an indisputable bonus: the right to use all the benefits of offshore status. Nowadays, in the light of the international fight against corruption and money laundering, the tax-exempt harbor feature has been eliminated, but some benefits still remain.
According to the 2017 ranking by the World Bank, Cyprus is in the top 10 in the ease of doing business category.
The passport of Cyprus opens up for its owners all the advantages of European citizenship: the opportunity to live and work in the EU, and to travel without a visa to more than 150 countries around the world. Cyprus recognizes dual citizenship and is ready to guarantee confidentiality about its new adoptive citizens.
To qualify for Cypriot citizenship, it is necessary to invest at least 2 million euros in the purchase of local real estate, bonds or shares, and, in addition, the investment must be retained for at least 3 years.
It should be noted that the Cyprus program was amended last year, making it more beneficial for potential citizens. For example, the amount of the minimum investment was reduced from 2.5 million to 2 million euros, and the investor’s parents were allowed to be included in the application (if they buy real estate worth at least 500,000 euros).
The Cyprus program for obtaining citizenship by investment is showing excellent results: as of today, the total number of passports issued, is over 1,200, according to Phileleftheros. Most passports were purchased by Russian nationals: 630, followed by Chinese with 162, and the last in the top three are Ukrainians, with 63. In 2016, more than 400 passports were issued. This year is shaping up to be a record year.
Caribbean citizenship by investment: Easier and cheaper
Among foreign investors, the number of those who choose the passports of the Caribbean countries (St. Kitts and Nevis, Saint Lucia, Dominica, Antigua and Barbuda, Grenada, etc.) is also increasing.
Their main advantages are the ease of obtaining them, and the low cost. And because the competition between neighboring states for new wealthy citizens is getting tougher, they are constantly adjusting their programs, making them more accessible.
Citizenship of Saint Lucia
This program for obtaining citizenship by investment is one of the newest, since the restrictions have been lifted on the number of issued passports (previously limited to 500 per year).The requirement for the applicants to declare assets of at least $3 million, as well as the need to visit the state in order to obtain a passport, have both been eliminated as well. In addition, Saint-Lucian citizenship by investment is one of the cheapest: $100,000 for one person and $190,000 for a family of up to 4 people. The procedure for obtaining citizenship takes no more than 3 months, and the passport allows you to enter almost 130 countries around the world without a visa.
Citizenship of Saint Kitts and Nevis
Perhaps the most famous both in the Caribbean region and in the world is the program for obtaining the investment citizenship of Saint Kitts and Nevis. During the over three decades of this program being in effect, the passport of this island state has been obtained by more than 11,000 people.
The main advantages that Saint Kitts and Nevis grant to their new citizens are visa-free entry to more than 150 countries in the world, strict confidentiality about dual citizenship, and tax incentives.
Recently, the authorities of this island state presented the world with a new surprise. At the end of September, after the devastating hurricanes Irma and Maria, which caused damage to the Caribbean islands, the government of Saint Kitts and Nevis decided to create a fund to mitigate the consequences of the hurricane (the Hurricane Relief Fund). To raise money for this fund as quickly as possible, the authorities reduced the cost of obtaining a second citizenship by investment to an unprecedented extent. Until the end of March 2018, the passport of this country can be bought 40% cheaper, while for a family costs have been reduced by 50%. If earlier the passport for one applicant cost almost 300,000 dollars, now the amount of the contribution required is only 150,000 dollars. Moreover, citizenship for a family of 4 with all fees and duties included will cost less than 180,000 dollars.
There remains another option available for obtaining the citizenship of Saint Kitts and Nevis by investment: through the purchase of real estate. It implies an investment of $400,000 plus additional fees (including the due diligence verification, application processing fees, and the passport fee).
Citizenship of Dominica
In the Commonwealth of Dominica, the conditions for obtaining a second passport were simplified in 2016. Reduced fees were put into place for adult dependents and minors included in the application. Earlier, it was necessary to pay $50,000 and $25,000 for adults and children respectively, now the amount is $20,000. The minimum investment for the citizenship program of this country ranges from $100,000 (donation) to $200,000 (real estate).
Citizenship of Antigua and Barbuda
The cost of Antiguan citizenship varies from $100,000 (donation) to $400,000 (purchase of real estate). Application processing takes 3-5 months, and the passport allows you to travel without visas to more than 130 countries around the world, including the whole EU, Great Britain, etc.
Not so long ago, the opportunity to obtain the status of a tax resident in this country opened up, on certain conditions: it is necessary to have a permanent residence in Antigua (buy or rent a property), reside in the country for at least 30 days per year, have confirmed income of $100,000 per year, and pay a fixed annual tax of $20,000. After that, you will be able to obtain a Certificate of Permanent Resident of Antigua and a Tax Identification Number, which gives wide tax advantages. Antigua is the only country in the Caribbean with such an offer. Also, in Antigua you can obtain a driver’s license.
Permanent residency and residence permits in Europe
In addition to citizenship by investment in Europe, it is also possible to apply for a permanent residency or a residence permit.
The residence permit gives the right to stay in the country for up to 5 years. At the same time, a holder of a residence permit card is allowed to enter/exit the country multiple times (which is not allowed for a normal visa holders), as well as to travel to the Schengen countries without visas. There are restrictions on residing on a permanent basis in other European countries, but a residence permit is suitable if you eventually plan to get permanent residence or a second citizenship, to set up a second home base, or are looking for an opportunity to change your tax residency.
A residence permit can be obtained in several ways, for example, by registering a company or investing in securities and real estate. The most popular residence permit programs by investment are in Portugal, Spain, Greece and Malta.
In Portugal, a residence permit can be obtained either by purchasing real estate valued at over 350,000 euros, or investing 1 million euros in securities, or creating 10 jobs. In Spain, one needs to either buy real estate worth 500,000 euros, buy government bonds for 2 million euros, or open a bank deposit with 1 million euros. In turn, in Greece, in order to get a residence permit, it is necessary to buy a property worth 250,000 euros.
Malta’s permanent residence by investment
The conditions for obtaining permanent residency in Malta are purchase of government bonds worth 250,000 euros, and payment of 30,000 euros in administrative fees. It is also necessary to buy (for at least 270,000 euros) or rent a (at least 10,000 euros per year) property. The real estate can be sold after five years of obligatory retention. The applicant must also confirm annual income of at least 100,000 euros per year, or a capital of at least 500,000 euros. Permanent residency must be renewed every five years.
There aren’t many programs for obtaining permanent residency by investment in Europe. In fact, after the Hungarian program was closed down, only the Malta program is fully operational. By applying, you can get permanent residence in just 2-4 months, and for the whole family, too, including parents. The rest of the countries offer a temporary residence permit.
Choosing a citizenship by investment program: Migronis Recommends
There are more than 20 programs available to choose from. While making up your mind, answer the following questions:
- How many countries is it possible to enter on a visa-free basis? Which countries? Where is permanent residence possible? What rights does citizenship provide?
- Is it possible to take advantage of tax benefits? Or, on the contrary, are additional tax liabilities imposed on the investor?
- Can the investor’s family members get citizenship together with them? How many of them? What is the age limit for children and parents of the investor?
- Is it necessary to confirm the source of your income, and what documents are required?
- Which programs allow government officials to apply?
- At what stage of the registration process is it necessary to make the payment? Does the program allow to make the investment only after the application is approved?
- Is there a guarantee of a return on the investments?