Investment Migration FAQ
How Does Citizenship by Investment Work? – A Brief Explanation
Residence and Citizenship by Investment FAQ
- Permanent residence permits: Grant the right to settle permanently in the issuing jurisdiction, and that jurisdiction alone. In the case of Schengen countries, it also grants the right to travel freely within the Schengen border union. PRs do not grant voting rights or the right to consular assistance.
- Citizenships: In addition to granting the right of permanent settlement in the issuing country, citizenships also bestow a wide range of benefits, such as the right to vote (although not always) and the right to consular services. Unlike residence permits (permanent or temporary) citizenships are also – in many cases, but not all – hereditary. Citizenship in an EU country further grants the right of permanent settlement in all EU member states.
- RBI: Residence by Investment
- CBI: Citizenship by Investment
- CIP: Citizenship by Investment Program
- CIU: Citizenship by Investment Unit (the government body tasked with processing applications).
In terms of sheer applicant numbers, the leading citizenship by investment programs are currently (August 2018) Dominica and Saint Kitts and Nevis in the Caribbean, and Malta and Cyprus in Europe.
The leading residence programs are the United States EB-5 program, the Greek and Portuguese golden visa programs in Europe, and the Malaysia MM2H program in Asia.
In August 2018, there were 12 formal CIPs (programs with pre-defined prices and precise requirements). These are:
- Antigua & Barbuda
- Moldova (Opening October 2018)
- Montenegro (Opening October 2018)
- Saint Kitts & Nevis
- Saint Lucia
Furthermore, there are dozens of residence by investment programs, the most popular of which are:
- Canada (Quebec)
- Hong Kong
- New Zealand
- South Korea
- United Kingdom
- United States
Citizenship by investment is the legal acquisition of citizenship (including passports) through either an investment in or a donation to a jurisdiction that has a citizenship by investment program.
Residence by investment is the legal acquisition of residence permits (either temporary or permanent) through either an investment in or a donation to a jurisdiction that has a residence by investment program, sometimes referred to as a “golden visa” program.
These two types of programs are collectively referred to as investment migration programs.
(include What is Citizenship by Investment Video here)
2. Advantages and Disadvantages of Investment Migration
In most cases, the answer to this question is “only if you spend the majority of your time there”.
Different countries fall into one of three tax-categories:
- Residential taxation, the most common type of tax policy, means that a country will only require that you pay tax there (on worldwide income) if it is your main home. In practice, this usually means that you spend more than half the year there. It’s a little more complicated, but that’s the gist of it. Consult a tax lawyer for more detailed information on this.
- Territorial taxation, the type of tax policy applied by most CIP-jurisdictions, means that a country will only require that you pay tax on income you make in – or remit to – that country, regardless of how much time you spend there.
- Citizenship-based taxation, the most draconian form of tax policy, applies only to citizens of the United States and Eritrea. This type of tax policy will require that you pay tax on your worldwide income to your country of citizenship, regardless of whether or not you live there or make money there.
There are many different answers to this question, depending on the criteria used to measure. See our Passport Rankings page for more information.
While there are an almost unlimited number of motivations for participating in such programs, common ones are a desire to
- Improve personal mobility by gaining visa-free travel to and settlement rights in more jurisdictions
- Increase overseas education possibilities
- Improve safety, not only of the individuals involved, but also their assets through improved property rights
- Have a “Plan B”. Many investors participate in such programs so as to have an alternative country to which they can relocate, should circumstances in their current place of residence become untenable.
3. Common Concerns
In most cases, no, but in the case of Malta and Cyprus, yes.
Generally, your qualifying investment is held in escrow until the application is processed. If approved, it will be transferred to the relevant company or government body. If rejected, your main investment will be returned to you, although processing fees related to the application – in most cases – will not.
While service providers are cautious to recommend a CIP to someone from a country that does not permit dual citizenship, many such applicants still choose to participate in a CIP, assuming any potential risk.
While the chance of your home country’s authorities discovering your second passport is low, this does happen from time to time. Consequences vary by country; Some countries do not strictly enforce dual nationality bans, while others will make you choose between the two citizenships. Others yet may automatically strip you of your nationality.
As a relatively young industry, and one that is also largely unregulated, the spectrum of RCBI-service providers runs the whole gamut from dependable and professional to downright fraudulent.
As the leading publication for the investment migration industry, we are continually kept apprised of industry developments and we know which firms deliver the goods and which ones do not.
If you would like us to put you in touch with a reputable service provider specializing in your particular region, please leave us a message in the box below.
In most cases, yes. Usually, you’ll need to maintain your investment for a period of between three and seven years. This requirement differs by country, and further details can be found in the Program Overview PDF on individual Country Pages.
Donations, naturally, are non-recoverable.
Yes, you can, although it will usually require additional costs.
Citizenship by investment programs generally do not require physical residence, but many residence by investment programs require a limited number of days of physical presence per year. For more details, see the individual Country Pages, or the Comparison Charts.
Yes. Not only are they legal, they are also actively promoted by the governments of countries that have such programs.
4. Application Requirements and Processing
Although programs differ widely in this respect – see individual country pages for further details – most programs require documents like:
- Filled application forms
- Professional references (from bankers, lawyers and so on)
- Financial statements, including proof of source of funds and wealth, bank statements and so on.
- Proof of address
- Letters of recommendation
- Police certificates
- Marriage certificates
- Birth certificates
- Medical certificates
- Affidavits of source of funds, dependent status etc.
- Notarized copies of university diplomas (if applicable)
Your accredited service provider (hyperlink) will help ensure you file all relevant paperwork.
For RBI programs, New Zealand has the highest rejection rate, refusing nearly 50% of all applications.
For citizenship programs, Malta and Saint Kitts & Nevis have the highest rates of refusal.
Anyone who can demonstrate that they have come about their money in a legal manner and are otherwise of good moral character (i.e. do not have a criminal history, are not a reputational risk to the receiving country etc) can apply, with some exceptions for nationals of certain countries, like North Korea.
In some cases, medical certificates may be required. For further details on each program’s requirements, visit the individual Country Pages.
Citizenship programs usually offer either donation or real estate investment options, although some also allow business-, bond-, stock- and other types of investment. Residence by investment programs typically do not offer donations as an option, but more commonly require investment in real estate, bonds, private companies, publicly listed shares, or bank deposits.
In most cases, no, although there are exceptions. You’ll usually need to go through a licensed agent. For an overview of the licensed agents for each program, please visit the individual country pages (hyperlink).
In most cases, no, but some programs have “fast-track” options for applicants who make additional investments. To see whether this is available, visit the individual Country Pages and see their respective “Program Overview” PDFs.
This depends on each program. Usually it will range from about 3 weeks to 6 months, but in some cases – such as when there is an application backlog – it can take considerably longer. To understand the processing timeline for different programs, visit the individual country pages and see their respective “Program Overview” PDFs.
5. Costs and Pricing
Because obtaining a citizenship in an EU country also grants the right to settle permanently in all other EU countries. In other words, you get 28 countries for the price of one.
Other citizenship programs do not offer this benefit and are therefore less valuable.
The cost depends on the program, the investment option chosen, as well as the number of family members included in the application.
- RBI programs range from EUR 250,000 (Latvia, Greece, Portugal, etc) to GBP 2 million (UK Tier 1 program) in Europe, and considerably less in countries outside of Europe and North America.
- CBI programs range from a $100,000 donation (not including fees) in certain Caribbean countries, as well as Moldova, to some EUR 2 million (Cyprus).
To understand precisely what each program would cost for you and your family, use our RCBI-program Price Calculator.
- Statistics on residence and citizenship programs in the Data Center
- The Citizenship by Investment Documentary Series
- The Residence and Citizenship by Investment Company Directory
- A blacklist of nationalities banned from participating in citizenship programs
- The history of citizenship by investment
- An overview of various passport rankings
- Program comparison tables