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The nature of the investment can vary widely, and different countries offer different options based on their economic priorities and strategic goals. These programs can also make provision for the investor's family allowing them to live, work and study in the host country. Residency by investment programs have gained popularity over the years as they help the host country attract foreign capital investment, stimulate economic development and create mutually beneficial relationships with investors.
In this blog we shall provide an overview of how residence by investment programs work as well highlight the top European residence by investment programs.
Key Takeaways
Residence by investment refers to a legal process in which foreign investors acquire the right to reside in another nation by making a significant financial investment.
Various residency by investment programs exist but some common ones include; investing in real estate, government bonds, business investments, making a donation or through job creation.
Some general requirements for investors to obtain a residence permit through investment programs include making a significant financial investment, a clean criminal record and a medical examination to ensure they are in good health.
As an investor interested in the Portugal golden visa, consider making investments through our Alt Path hotel fund to benefit from cash incentives of 45-55%, as provided by the Portuguese government.
Disclaimer
The contents of this article are for educational purposes only. They are not intended to be a source of professional financial advice. You will find experts on financial planning and financial management here.
Common Types of Residence by Investment Programs
To obtain a temporary residence permit or permanent residency in a different country, investors are usually required to make qualified investments as specified by the host country. Here are some common types of residence by investment programs.
Real estate investment
With real estate investments, investors are required to purchase property, often at a minimum value, within the host country. This can include residential, commercial or development projects.
Government bonds or securities
Another popular investment avenue is government bonds and securities. Through these financial instruments, individuals can inject capital into the host country by investing in bonds, stocks and bank deposits.
Business investments
To acquire a residence permit, investors may be required to start a business or invest in existing businesses, contributing to economic growth and job creation.
Job creation
In order to boost their economy, some investment programs require the investor to create a certain number of jobs in the host country, which in turn creates employment opportunities for the local residents.
Donation or contribution
Another way in which individuals can obtain permanent residency by investment is by making a significant donation or contribution to a specified national development fund or project in the host country.
Difference Between Residency and Citizenship by Investment
As an investor, it is important to note that residency and citizenship are two distinct legal statuses that grant individuals different rights, privileges and responsibilities within a country. Here are the key differences between residency and citizenship.
Residency by investment
Residency is a legal status that allows an individual to live in a country for a specified period. It is usually granted for reasons such as work, study, investment or family reunification.
Depending on the specific laws of a country, an investor can be granted a golden visa which is a temporary or permanent residence permit. The general requirements for a residence permit include:
A minimum financial investment made by the investor in the host country. This could include investments in real estate, government bonds, business ventures or other approved avenues. The investment should be maintained for a specific duration of time.
A clean criminal record that is usually verified through background checks.
Some countries may require applicants to take a medical examination to ensure they are in good health.
Investors are required to provide evidence of the source of the investment funds.
Provide all necessary documentation, including identification papers, proof of funds, investment details and any other required paperwork.
Pass cultural and language tests.
It is advisable to seek the assistance of a financial advisor to help you understand the legal requirements of obtaining permanent residency, and the available investment options.
Benefits of Residency by Investment
Some of the benefits that investors under a golden visa program get to enjoy include:
Employment opportunities: With a residence permit, individuals have the right to work in the host country without the need for additional work permits. This allows them to pursue profitable opportunities in their field.
Visa free travel: Investors who have obtained residency by investment can travel to specific countries without the need to get additional visas. For investors who are interested in traveling in the Schengen Zone visa free, acquiring a golden visa from a country in the European Union would be of great benefit.
Pathway to citizenship: In some cases, permanent residency status can provide an avenue for individuals to obtain full citizenship. This provides individuals with the option of acquiring dual citizenship.
Access to social services: Permanent residents usually have access to social services provided by the host country such as quality healthcare and education.
Stability and security: Residency in a politically stable country provides individuals with a sense of security and stability, contributing to a higher quality of life for the individual and their family.
Citizenship by Investment
Citizenship by investment is a legal process through which individuals can acquire citizenship of a country by making a significant financial investment in that nation. In return for the financial contribution, the investor and their family members are granted full citizenship rights, including the right to live, work, vote and travel freely within the country.
Key features of citizenship by investment programs include:
Investors are required to make a substantial financial contribution to the host country. These qualified investments can be in the form of real estate purchase, government bonds, economic development projects or direct contributions to a national fund.
Investors must provide evidence that the funds used for the investment are obtained through legal and legitimate means. This is typically assessed through a due diligence process.
Successful applicants and their eligible family members are granted full citizenship rights, which may include the right to reside, work and study in the country. In some cases, citizenship may also come with voting rights and eligibility for some social benefits.
Citizenship by investment programs usually offer individuals a quicker pathway to acquiring citizenship compared to traditional naturalization processes. This can be appealing to investors seeking a quicker route to citizenship.
Many citizen by investment programs extend citizenship benefits to the investor's immediate family members, including spouses, children and sometimes dependent parents.
Some countries that offer citizenship by investment permit dual citizenship, allowing investors to retain their original citizenship alongside the newly acquired one. Be sure to check dual citizenship policies as they vary among different countries.
Benefits of Citizenship by investment
Permanent citizenship: Citizenship acquired through investment is typically permanent and does not require periodic renewals. This provides individuals with lifelong citizenship rights.
Tax benefits: Some countries that facilitate citizenship by investment offer tax benefits for new citizens, including exemptions and more lenient laws with regard to inheritance matters.
Global Mobility: As a citizen of specific countries, you can enjoy visa-free or visa-on-arrival access to numerous countries, thus making your travel experiences hassle-free.
Personal security and stability: Acquiring a second citizenship can provide a safety net for individuals and their families in times of political or economic instability in their home country.
Access to quality education and healthcare services: By gaining citizenship in a host country, investors and their families can enjoy access to high-quality education and healthcare services.
Top European Residence by Investment Programs
Residence by investment programs provide investors with an avenue to acquire permanent residence by making substantial investments in specific countries. If you're interested in investing in Europe, here are the top countries to consider. For detailed information on the top golden visa programs for investors in 2024, read more here.
Cyprus
Minimum investment requirement: €300,000 investment in property or funds.
Visa processing timeline: 2-5 months.
Major benefits: Visa free travel to 170+ countries including some Schengen countries, opportunity to secure EU residency and inclusion of family members.
Greece
Minimum investment requirement: €250,000-500,000 investment in property or €400,000 investment in funds.
Application timeline: 3-5 months.
Major benefits: Visa-free travel within the Schengen Area, no minimum stay requirements and inclusion of family members.
Italy
Minimum investment requirement: €250,000 investment in an Italian innovative startup.
Application timeline: 3-4 months.
Major benefits: Visa free travel within the Schengen Zone, investors are eligible for Italian citizenship after 10 years.
Latvia
Minimum investment requirement: €50,000
Application timeline: 1-3 months.
Major benefits: Visa free travel within the Schengen Area, no minimum stay requirements and eligibility for application of citizenship after 10 years of legal residence.
Luxembourg
Minimum investment requirement: €500,000 in a new or existing Luxembourg company.
Application timeline: 4-6 months.
Major benefits: Visa free travel to EU countries and the Europe Schengen Area, tax benefits and access to social services.
Malta
Minimum investment requirement: €600,000 into the National Development Fund.
Application timeline: 3-6 months.
Major benefits: Visa free travel to 186+ countries globally including those in the Schengen Area; inclusion of family members and access to good quality healthcare.
Monaco
Minimum investment requirement: Deposit €500,000 into a bank that is registered in Monaco.
Application timeline: 4-6 months.
Major benefits: Visa free travel to countries in the Schengen Area, tax benefits and inclusion of family members.
Montenegro
Minimum investment requirement: €250,000 investment in pre-approved real estate projects.
Application timeline: 3-5 months.
Major benefits: Visa free travel to 137 countries, tax benefits and inclusion of family members.
Netherlands
Minimum investment requirement: €1.25 million, which must be invested into Dutch businesses.
Application timeline: 3-5 months.
Major benefits: Visa free travel within the Schengen Zone, tax benefits and inclusion of family members.
Portugal
Minimum investment requirement: €250,000 as a donation to the Arts with the aim of preserving national heritage in Portugal.
Application timeline: 12-18 months.
Major benefits: Visa free travel within Europe's Schengen Area, high quality of life and eligibility of citizenship after 5 years.
General requirements for obtaining a residence permit through investment programs
The requirements for a residence by investment permit vary depending on the specific country and the nature of the program. However, here is an overview of the common requirements by most countries.
Typically, investors are required to make a significant financial investment. This could include investments in real estate, government bonds, business ventures or other approved avenues.
Each investment program specifies a minimum investment threshold that applicants must meet.
Individuals must produce valid documentation like an identification or passport for proof of identity.
A clean criminal record by providing a certificate of good conduct or a police clearance certificate to demonstrate a lack of criminal history.
Some programs may require applicants to undergo a medical examination to ensure they are in good health.
Applicants are typically required to pay processing fees, which can vary widely among different programs.
Benefits of residence by investment programs
Residence by investment programs offer investors and their families a range of benefits in another country. Depending on the host country and the nature of the program, here are some common benefits associated with residence by investment:
Visa-free travel: Many residence by investment programs provide investors and their family members with visa-free or visa-on-arrival access to a wide range of countries. This makes international travel easy and more enjoyable.
Access to excellent social services: With a residence permit, individuals and their families often gain access to high-quality healthcare, education and other essential services in the host country.
Tax benefits: Some countries with residence by investment programs offer favorable tax regimes, allowing investors to optimize their tax liabilities.
Cultural diversity: Individuals interested in having a different cultural experience can get a chance to explore different cultures in a different country and even learn a new language or two.
Business opportunities: Access to a new business environment can provide investors with networking opportunities that could lead to personal and professional development. Entrepreneurs and investors can tap into new markets, and this could lead to the growth and expansion of their businesses.
Retirement planning: Some countries offer retirees residence by investment opportunities, making it easier for them to settle in an attractive destination where they can live comfortably.
Economic and political stability: With an investor visa, an individual and their family can benefit from residency in an economically and politically stable country, in case of turmoil in their country of origin.
Pathway to citizenship: In some cases, residence by investment programs can serve as means of obtaining citizenship after an investor has fulfilled specific conditions and has maintained residency in the host country for the required number of years. This can enable investors to gain dual citizenship.
Asset portfolio diversification: As an investor, having assets and investments in multiple countries can contribute to a diversified and resilient financial portfolio.
Inheritance and legacy planning: As most residency by investment programs allow for inclusion of the family, residency benefits can be extended to the next generation and this can help in inheritance and long-term financial planning.
While residence by investment programs offer numerous advantages to investors, individuals considering such programs should also be aware of the associated costs, legal requirements and potential ethical considerations. Be sure to seek the advice of a professional and do your due diligence to ensure that the investment opportunities match with your long term goals.
If you're interested in a fund investment opportunity in Portugal, get in touch with our team to learn more.
Invest With Us
Are you an investor seeking a profitable venture in boutique hotel development in Portugal? At Bay Street Capital Holdings, we have an excellent investment opportunity through our Alt Path hotel fund. The fund is dedicated to investing in boutique hotels situated in areas with high travel patterns, minimal competition among brands and tax incentives from the local government .
So far in Portugal, we have successfully secured approval for key projects through established government contacts for our hotel developments. Investors who participate in our fund can benefit from the 45-55% cash incentives provided by the Portuguese government. Additionally through our fund, investors can obtain citizenship through qualified investments, leading to the acquisition of a second passport.
The fund's primary objective is to build and operate a portfolio of newly developed boutique hotels, in areas that attract a high number of local and international visitors. Diversifying your investment portfolio by owning properties in various global locations is a strategic and potentially lucrative long-term strategy.
This approach allows for risk spreading across different markets and serves as a safeguard against currency fluctuations. To read more on the Portugal golden visa, find the latest insights on this blog.
If you would like to schedule a meeting with our team to discuss the Alt Path hotel fund, you can do so here.
Bay Street Capital Holdings
Based in Palo Alto, CA, Bay Street Capital Holdings is an independent investment advisory, wealth management and financial planning firm that was founded by Willian Huston. From 2021 to 2023, William was recognized by Investopedia among the Top 100 Financial Advisors.
In 2023, Bay Street earned recognition as a Finalist in the Wealthmanagement.com 2023 Industry Awards in the Asset Managers: Diversity, Equity and Inclusion category, specifically for its collaboration with Resthaven Properties.
The firm was founded with a focus on effectively managing and growing client portfolios while mitigating overall risk and volatility.
Sources
https://immigrantinvest.com/residence-en/
