Residency by investment used to be the only way a foreign investor could become a resident of an EU country, usually under the assumption that such residency would eventually lead to citizenship. Today, thanks to citizenship by investment, there really is no need for such pussy-footing, and yet thousands still do every year!
If you are a newcomer to the relatively recent phenomena of obtaining a second citizenship, largely for business purposes, you may have heard the term “Citizenship by Investment”, and on other occasions heard the similar sounding “Residency by Investment”. However, be warned; although they sound similar, they are in fact very different.
What Is Residency By Investment?
The basic theory behind residency by investment is this:
- An investor makes an initial investment, for example €100,000 in government bonds in return for that nations temporary residency. They will receive a temporary residency card that allows them to live and work in that country for several months of the year
- These bonds must be held for five years, then the investor can reclaim them – minus profit
- After five years the investor can apply for permanent residency
- If they are successful after one year of permanent residency the investor can apply for citizenship
The problem is the residency program only guarantees the investor temporary residency. Everything else, such as permanent residency comes down to a selection board that has nothing to do with the people who handled the investor’s original application. The investor really is at the mercy of people that don’t really know him or his back story.
It is often the case that the investor feels “hung out to dry” after five years, with nothing guaranteed, and everything up for grabs once again. Of course, their investment stake is returned, but minus any profit it would have made if placed in a high-interest savings account.
What Is Citizenship By Investment?
Citizenship by investment is far less complicated and complex than residency by investment. While there are three sections to a residency program, Temporary Residency, Permanent Residency and possible Citizenship, with citizenship by investment there is just one section – Citizenship.
Here’s how it works:
- The investor – after passing a stringent background test – meets the terms put forward by the donor nation – and makes a financial investment, normally in the form of a real estate purchase, which they agree to maintain for a minimum of five years
- Within an average of six months, in return for this investment, the donor nation grants the investor its citizenship and passport
And that’s all there is to it. Citizenship by investment is simplicity itself, with all parties happy with the outcome. If the investor chooses to, they can even sell the property they purchased after five years, which will have surely made a tidy profit.
Countries With Residency By Investment Programs
Almost every country in Europe has some kind of residency by investment program. Here are some high profile examples:
Portugal Golden Visa €500,000
The Portuguese Golden Visa is the bestselling residency by investment program in the world, with an estimated 10,000 sold, and a waiting list rumoured to be 100,000 strong. The vast majority of purchasers of this program are Chinese, and while the program takes a minimum of five years to complete, with the thousands of Chinese immigrants now living there, the Portuguese authorities would seem as good as their word.
This program requires the investor to purchase €500,000 in Portuguese Government Bonds, and leave them in a government account for five years. After five years the investor can apply for permanent Portuguese residency, and after a further year, Portuguese citizenship.
Spanish Golden Visa €500,000
The Spanish Golden Visa requires the same €500,000 government bond purchase, but differs from its Portuguese counterpart in that it takes twice as long – 10 years – to receive permanent residency. At that point the applicant must decide what to do with their original citizenship. Spain does not allow dual citizenship, so if you apply for Spanish citizenship, you must first renounce your original nationality.
Of course, should you fail in your application you would be instantly stateless, and you would then need to go back to your home country – cap in hand – and plead to have your citizenship and passport reinstated. Good luck with that!
UK Investor Visa
We all know the UK has a high opinion of itself, and luckily for them, plenty of foreign investors, particularly from Saudi Arabia and Russia share that opinion, and would pretty much do whatever it took if they could just get within touching distance of a British passport.
We also know that while the UK is the most ordered and bureaucratic nation in the world, when it suits their purpose the Brits are quite happy to cut through acres of red tape. The UK residency by investment program is just such an example.
Basically, the UK has two residency programs, the UK Entrepreneur Visa Program and the UK Investor Visa Program. The UK being the UK, unlike the simplicity of the Portuguese and Spanish Golden Visa programs, these are far more complex.
Option 1: UK Entrepreneur Visa Program
The UK Entrepreneur Visa program requires the applicant to pass an English Language test before the visa is granted. The applicant can include their dependents (spouse and children under the age of 18) in their application, and if successful, will receive a visa valid for 3 years 4 months, which can subsequently be extended for two further years.
After spending a total of five years in the UK as residents, the main applicant (and their dependent family) will be eligible to apply for ILR (Indefinite Leave to Remain). 12 months after receipt of ILR, the applicant has the option to apply for full UK citizenship.
UK Entrepreneur Visa Program Requirements:
- The main applicant must have £200,000 in available funds to set up a new business in the UK, and must also create two new jobs for UK workers
- The main applicant will be required to work full time in the running of this business for the full 5-year residency period, including paying taxes and paying salaries to the two new employees
Option 2: UK Investor Visa Program
The UK Investor Visa Program offers high net-worth individuals who are prepared to make a substantial and significant investment into the UK’s economy the opportunity to become permanent residents and eventually British citizens.
The program was initiated in 2011 when David Cameron’s UK government announced it would present a “red carpet” to foreign investors and entrepreneurs.
UK Investor Visa Program Requirements
- The investor must prove they have at least £2 million in usable assets
- The minimum required investment is £1 million, of which £750,000 must be invested for a minimum of five years in UK Government Bonds or share capital
- Permanent residency – referred to as ILR (Indefinite Leave to Remain) – is issued after 5 years
- If the investment amount is £5 million, ILR is granted after 3 years
- If the investment amount is £10 million, ILR is granted after 2 years
Requirements Of Applicants
Applicant of either the Entrepreneur or Investor Visa Program must fulfil the following criteria:
- An applicant must be over 18-years of age
- An applicant must maintain the required investment throughout the five-years of the residency program
- An applicant must live in the UK (180 days annual absence allowed)
- An applicant must have authorized proof of no prior criminal record
So there you have it. The UK residency by investment programs are both extremely complicated and very expensive, with no guarantee of being granted British citizenship and a passport at the end of it (although anyone splashing out £10 million is going to be pretty adamant about getting that UK passport!)
If you know an experienced second citizenship broker, and you have your heart set on British citizenship – but not at those prices – why not see what they can come up with. The UK may even have an unofficial CBI program.
Citizenship By Investment Programs
|Austria Citizenship Program||€250,000|
|Belgium Citizenship Program||€200,000|
|Bulgaria Citizenship Program||€65,000|
|Croatia Citizenship Program||€175,000|
|Czech Republic Citizenship Program||€200,000|
|France Citizenship Program||€200,000|
|Hungary Citizenship Program||€200,000|
|Italy Citizenship Program||€190,000|
|Mexico Citizenship Program||€120,000|
|Holland Citizenship Program||€175,000|
|Poland Citizenship Program||€175,000|
|Slovakia Citizenship Program||€52,000|
|Slovenia Citizenship Program||€50,000|
|Spain Citizenship Program||€200,000|
|Turkey Citizenship Program||€75,000|