The term Citizenship by Investment is gaining increasing popularity among high net worth individuals (HNWIs) around the globe. As the world's elite look to enhance their global mobility and secure a plan b for themselves and their families, obtaining a second citizenship is proving to be the optimal solution..
The concept of buying a passport is regularly covered by the media and discussed on forums online. While it may seem complex at first, getting a second passport through investment is a straightforward process when you choose the right consultancy to assist you…
The concept of citizenship has been around for millennia, as ancient Greek states, like Athens, pioneered the idea of giving individuals citizenship. Citizens in Athens had the right to own property, run for political office, vote on administrative affairs, and fully contribute to the economy.
Citizens now have full rights within their country, but their status comes with responsibilities such as avoiding any criminal conduct, contributing to the economy, and respecting the rights of other citizens.
Many consider getting a second citizenship a complex process because most of the routes to becoming a dual citizen are quite long or demand extremely specific requirements. Here are the main routes to acquiring a second citizenship:
- Naturalisation - the most common, and longest, route to obtaining a second citizenship; naturalisation occurs when a person spends a specific amount of years as a resident of a nation until they can apply to become a citizen under the host country's laws.
- Citizenship by Descent - this route is fairly simple, but extremely exclusive. Countries such as Serbia, Ireland, and others offer people with ancestors who were citizens of a particular nation the chance to apply for citizenship. However, proving ancestry can be a complex process depending on the documentation required, and it is very specific to a small portion of the world's population.
- Exceptional Citizenship - in some cases, a country can grant people Exceptional Citizenship. However, this option is an extremely rare occurrence and usually granted to high-profile people like Tom Hanks, who obtained Greek Exceptional Citizenship for his charity work in the country.
- Citizenship by Investment - this is the simplest option. Many countries offer investors the chance to obtain citizenship through investing in a nation's economy; this topic is covered in detail below.
The idea of Citizenship by Investment also stems from ancient times, and the Roman Republic was the first nation to develop it into a route to citizenship.
Those who contributed to the Roman economy under specific requirements were granted citizenship and all the rights that came with it, and the concept holds true today.
Many countries now host what is referred to as Citizenship by Investment Programmes, which are routes to obtaining a citizenship certificate and passport of a nation through contributing to the economy.
The idea is that if a person contributes to a country's economy, they have fulfilled part of their duty as a citizen and hence should be considered one. Their other responsibilities are avoiding criminal activities and respecting the laws and the rights of other citizens.
Citizenship by Investment is one of the most valuable solutions a person can pursue. The benefits of obtaining a second passport are endless, varying from one person's circumstances to the other, addressing personal pain points and solving distinct problems a person may have. However, here are some major benefits that everyone enjoys which are:
- Greater safety & security - a second passport is the ultimate contingency plan to mitigate the risk of political or economic turbulence in one's home country. Having a second home means a person can flee to a safe destination along with their family and wealth, ensuring their wellbeing.
- Enhanced global mobility - with a second passport in hand, a person widens the possibilities of international travel. As a second passport with a strong list of visa-free destinations makes travel easier.
- Better investment and tax opportunities - by obtaining a second passport of a nation with a strong economy, commerce, and real estate, a person can broaden their global investment opportunities. Getting a second citizenship of a tax-friendly country also provides HNWIs with more taxation options, alleviating their tax burden.
- An elevated standard of living - a second passport opens more doors to healthcare services, luxury living locations, and regions with a higher quality of life or lifestyle.
- Higher education and employment opportunities - having a second passport means greater opportunities for top tier education and employment opportunities in better schools and companies throughout the world that were previously inaccessible through one's original citizenship.
Citizenship by Investment is extremely beneficial to the countries granting citizenship, as it provides the government with significant sums of unencumbered foreign direct investment funds to help develop the nation.
The Commonwealth of Dominica, for example, previously used funds generated through its Citizenship by Investment Programme to create affordable housing for its residents. The programme is also funding the construction of the country's first international airport, a project that will positively affect its residents' lifestyle and the nation's economy.
Citizenship by Investment Programmes differ from one country to the next, but the most common types of investment usually fall into five main categories, which are:
Many countries grant citizenship to those who donate a minimum amount to a country's economy. The donation option is usually the simplest and most affordable route to obtain citizenship, as, in some countries, the required amount starts at as low as US $100,000. However, donations, by their definition, mean that investors do not get their money back.
Donations are usually made to government-run funds, which the government uses to develop the country. In some cases, a government may create an ad hoc fund to combat economic crisis or natural disasters, such as the St Kitts and Nevis Hurricane Relief Fund, which was a temporary route to citizenship that required a lesser donation than the normal Sustainable Growth Fund due to the country having to quickly rebuild after a devastating hurricane season.
Investing in real estate is one of the most popular routes to obtaining Citizenship by Investment. Most countries have a real estate option, and many of them allow investors to choose between actual property or buying shares in luxury resorts to obtain citizenship.
Real estate investments are cost-effective in the long run, as investors can resell their properties after a specific holding period set by the government. Investors can even profit off of the property during the holding period by renting it out or receiving dividends. The real estate option is also attractive for larger families.
A couple of countries give investors the option to buy government bonds or securities to obtain citizenship. Government bonds are considered a safer option but do not yield much profit.
Private securities, on the other hand, are higher risk but can achieve a higher return on investment.
This option is unique to Malta's Citizenship by Investment Programme and requires applicants to invest in more than just one route. Applicants will need to invest in real estate as well as donate to the government.
Many countries around the world offer their own version of Citizenship by Investment Programmes. As of 2022, eight nations have a route to economic citizenship. The premise remains the same, but the requirements and processing of the programmes differ from one country to the next.
However, generally, anyone who wants to apply for Citizenship by Investment must:
- Have a clean criminal background
- Provide a source of funds for their investment
- Submit a full application
- Make a qualified investment
- Be at least 18 years of age
Malta and Antigua & Barbuda are the only countries from the list below that have a physical residency requirement. No other Citizenship by Investment nation requires applicants to reside or visit the country to obtain citizenship.