What Is Citizenship By Investment: All You Need To Know

Do you know that it’s possible to ‘buy’ second passports? This idea may shock you, as it is often hard to get naturalized in a foreign country. Normally, you must spend multiple years residing there, show that you are of good moral character and tick a long list of boxes. 

However, high-profile individuals like former Google CEO Eric Schmidt (an American who purchased a Cypriot passport) have used their wealth to acquire second passports. In exchange for money, investors can add a new travel document to their portfolio, along with all the benefits that come with it—which we will discuss below.

In this article, we’ll talk about citizenship by investment programs: specific programs grant investors second citizenship for contributing to a country’s economy. We will cover:

• How do these programs work? 

• How much do you need to invest? 

• And how long does it take to get a second passport by investment? 

In this article, we will answer these and other questions to help you see all the benefits of pursuing citizenship by investment. 

But before we start, if you want to get the latest information on these types of programs and potentially secure a second passport, subscribe to our newsletter and check our FREE in-depth special report, ‘Plan-B Residencies & Instant Citizenships.’

UNDERSTANDING CITIZENSHIP BY INVESTMENT

As its name suggests, citizenship by investment involves investing money in a country to obtain a passport in return. In particular, through a government-approved investment of a certain amount, you can get a second passport in less time than usual—typically a few months. 

A BRIEF HISTORY OF CBI PROGRAMS 

In recent decades, some countries have passed their citizenship by investment laws, with Saint Kitts and Nevis being the first in 1984. Over time, other countries, such as Antigua and Barbuda, Grenada and even Turkey, have also introduced their own programs with unique conditions and price points. Therefore, these types of investment opportunities have been around for a few decades, but they are becoming more popular because of high-net-worth individuals (HNWIs) securing their second passports. 

PURPOSE AND BENEFITS FOR INDIVIDUALS AND COUNTRIES

On the one hand, individuals who acquire a second passport may benefit from perks such as increased global mobility, tax optimization, and opportunities for business expansion. On the other hand, the countries receiving investment can create more jobs and develop their economies, further improving the lives of locals and boosting infrastructure.

BENEFITS OF CITIZENSHIP BY INVESTMENT

Obtaining a second passport has gone from a “good-to-have” to a “must-have” in recent years, especially for individuals from countries with enormous political instability, lack of safety, high taxation and other issues. Securing a Plan-B allows you to enjoy a higher level of protection instead of relying solely on your home country. To further understand what citizenship by investment may offer you, let’s take a look at its benefits: 

INCREASED TRAVEL FREEDOM

This is perhaps the most obvious benefit of all. The strength of a passport is often determined by the number of countries it allows visa-free access to. In this regard, EU passports typically rank high and are cherished by many expats and migrants who live in this economic region. Most of my clients are American, Canadian and Australian, so more often than not, they might be entitled to another passport by descent. However, if you do not qualify for citizenship by descent, you can opt for citizenship by investing in EU countries like Malta. 

WEALTH PROTECTION

Another upside of citizenship by investment is wealth protection, allowing you to diversify your investments across jurisdictions. For example, if your country faces banking collapses and even threats of confiscation, a second passport may aid you in securing your wealth somewhere else with stronger asset protection laws. 

LIFESTYLE IMPROVEMENT

The perks of citizenship by investment go beyond increased freedom and asset protection, as you can also have a lifestyle more aligned with your personality and preferences. A second passport is the key to having another country you can legally call your home. If you’re unhappy with your home country’s current circumstances, such as rising crime and lack of safety on the streets, a second passport may give you access to a country where you can feel much safer. 

BUSINESS OPPORTUNITIES

With citizenship by investment comes increased business opportunities, as a new passport may provide access to new markets and valuable contacts in destinations of interest. In addition, if your current country of residence is hostile towards entrepreneurs and businesses, your second passport may offer you a new jurisdiction with business-friendlier policies and attractive tax incentives. 

FAMILY SECURITY

Last but surely not least, we cannot neglect the security and comfort of your family. You can legally have a second country that you call home, and in some cases, so can your family members. Moreover, certain countries will allow you to pass your newly acquired citizenship to your kids. Note that the family-friendliness of citizenship by investment programs varies from country to country. 

In Antigua and Barbuda, you can acquire a second passport through a business investment by investing in a government-approved business

TYPES OF INVESTMENTS

The various types of investments offered by citizenship by investment programs could arguably be another benefit that should not be taken lightly. Investing in assets like real estate or businesses could get you an additional passport and a more diversified portfolio. 

Below are some of the common investment options you can choose to secure your second passport:

REAL ESTATE

You can lock in nice properties to earn rental income or simply have a second house while still getting a good bang for your buck. To illustrate what citizenship by investment can do for you, in Dominica, investors may qualify for citizenship by investing in real estate worth at least $200,000 USD.

Related content: Top Countries With Zero Property Taxes

GOVERNMENT BONDS

Another investment option, though not as popular, is government bonds. By lending certain amounts of money to the government, you could both get some return on your investment and a second passport. For example, Saint Lucia allows you to acquire a second passport by investing at least $300,000 USD in government bonds. Still, keep in mind that this is only an option and not my favourite one, to be honest. Determine whether government bonds are a good option for you before lending money to any government.

BUSINESS INVESTMENT 

If you want to tap into new markets, this might be the right choice for you. In most citizenship-by-investment programs, you can invest money in a qualified business. For example, Antigua and Barbuda allows investors to get a second passport by investing in a government-approved business.

DONATIONS TO GOVERNMENT FUNDS

Some countries offer a second passport if you invest in government funds related to education, healthcare, innovation and others. This route may not be as popular, as it hardly bears any returns for the investor. However, a few countries may offer investment in government funds as the cheapest pathway to citizenship. For example, Saint Kitts and Nevis offers the Sustainable Island State Contribution option, where an individual applicant must invest at least $250,000 USD.  

Grand Anse Beach, Morne Rouge in Grenada

POPULAR CITIZENSHIP BY INVESTMENT PROGRAMS

Now that you understand the benefits of citizenship-by-investment programs and the habitual pathways, it’s time to learn about some of the most popular countries for getting a second passport.

CARIBBEAN 

The Caribbean is more than a vacation spot to bask in the sun and warm weather; it also comes with countries with enticing tax regimes and a more relaxed lifestyle. Examples include:

• Antigua and Barbuda

• Dominica

• Grenada

• Saint Kitts and Nevis

• Saint Lucia

OTHER REGIONS

In other parts of the world there are options for those interested in pursuing a second citizenship by investment. Examples include:

• Malta

• Turkey

Related content: Rising Costs: Five Caribbean Citizenship Programs Increase Investment Minimums

Remember, obtaining a second citizenship through investment is not easy. It requires patience, persistence, and a solid understanding of each step. Ensuring compliance with all legal requirements is crucial throughout the process

ELIGIBILITY CRITERIA AND REQUIREMENTS

Although each country imposes its own eligibility criteria, almost all of them share a common thread. That’s exactly what we’re looking at in this section, from investment minimums to background checks and beyond. 

• Proof of Funds: Applicants are often required to demonstrate that their funds come from a legal source. 

• Background Checks: Countries conduct thorough due diligence to make sure that applicants are of good moral character and have clean criminal records.

• Proof of Residence: Evidence of residence, such as property ownership or rental contracts, may be requested.

• Ongoing Maintenance Requirements: Applicants usually need to maintain the investment of their choice for a specific period of time. 

• Family Inclusion: Including family members in the application requires applicants to pay extra fees.

• Fees and Charges: Applicants must meet the investment minimums in one of the approved pathways and pay the applicable fees.

ADDITIONAL COSTS AND CONSIDERATIONS

Before wrapping this article up, it’s important to mention some overlooked aspects of citizenship-by-investment programs. For example, you will see countries claim that you need to invest certain amounts in government-approved projects, but they rarely mention the fine print (i.e., fees), which makes the final bill much heftier. 

Aside from the applicable fees, please consider that due diligence processes have gotten much stricter, potentially requiring applicants to attend interviews and pick up their passports in person in the country. Therefore, getting second citizenship by investment is not a stroll in the park, as it will demand patience and a deep understanding of all the steps. Stay compliant throughout the process.

Last but not least, know that things can change overnight, whether hikes in investment minimums or even the disappearance of certain programs. The bottom line is to grab the opportunities that resonate with you while you can because you might miss out on enticing deals. 

Related content: Live Tax-Free Abroad: The Best 9 Countries For Expats With Territorial Tax Systems

Citizenship by investment provides greater freedom and wealth protection, but it involves costs like government fees, so thorough research is key

CONCLUSION

Citizenship by investment offers valuable opportunities for investors eager to seek increased freedom, protect their wealth and improve their lifestyle. Investment options often include real estate, bonds, business and donations, allowing investors to obtain a second passport without residing in a country for multiple years.

Among other benefits, you can enjoy increased global mobility, an improved lifestyle and enhanced family security. However, note that you will need to incur additional expenses like government fees, such as those related to family inclusion. Make sure you do your research and understand the requirements thoroughly before starting any citizenship-by-investment process.