This is a topic of much contention, especially in light of the fact that most of the Caribbean nations offering Citizenship By Investment Programs are traditionally notoriously homophobic. In Montenegro, however, Parliament recently voted in favour of recognising gay and lesbian civil unions, paving the way towards a more just and equal society, and positioning the Montenegro CBI program as the go-to option for gay and lesbian couples, going forward.

While foreign direct investments generated by CBI and RBI Program are generally responsible for social upliftment and benefit to citizens of the host countries, they are not universally popular. In popular Golden Visa destinations such as Lisbon and Porto in Portugal and Barcelona in Spain, these programs alongside the rise of short-term letting platforms such as Airbnb have contributed to sky-rocketing property prices, making these areas less affordable for locals.

These programs have therefore frequently received criticism, especially from the left of the political spectrum and from the EU’s headquarters in Brussels. Political sentiment is one thing, but law is another. As it stands, each sovereign country within the EU is within its rights to determine the conditions for awarding citizenship rights to foreign nationals, typically on the basis of exceptional investment, and these programs are completely legal.

The EU did apply economic pressure on Moldova, which led to the country abandoning its Citizenship By Investment Program before it even got off the ground. 

Generally speaking, you would need to commit a crime or an act that seriously compromises your international standing to lose your second citizenship. Alternatively, you could ostensibly lose your investment citizenship (or residency) status if you were to be involved in some form of fraud or gross misrepresentation during your citizenship application.

There are many potential pitfalls to be aware of when investing in a second residency or citizenship program, however an experienced residency or citizenship planning advisor can help you navigate this landscape with ease. Some of the obvious potential risks include that your investment may not appreciate over time. Alternatively, you many end up paying more than market related prices for your investment property. Another issue is that your property may not be worth what it’s priced at.

In Turkey and elsewhere, for example, a government valuator confirms the value of your property, and if it is deemed to be worth $230,000, instead of the mandatory $250,000, you’d need to buy a second property in order to meet this requirement. Many investors therefore opt to be buy two lesser-priced properties so as to avoid any risks associated with this.

The answer to this question will depend almost entirely on your personal circumstances. Are you looking for speed, affordability or return on investment? If the former, a donation based citizenship may be worth considering, however if you would like your investment to deliver a return on investment and potential capital appreciation, a program offering citizenship by property investment may be better suited to your needs.

In strict terms, Golden Visa Programs are government endorsed and promoted residency schemes featuring a minimum property investment as a requirement for attaining residency. As such, Portugal, Spain, Germany, Cyprus, Greece and Malta count among the most prominent true Golden Visa jurisdictions. Yet the Italian Investment Residency is widely referred to as the Italian Golden Visa as well, even though this country’s residency program does not have a property investment option at present.

As of July 2020, the following countries offer foreign investors the ability to obtain Citizenship By Investment: Antigua and Barbuda, St Kitts and Nevis, St Lucia, Dominica, Vanuatu, Grenada, Montenegro, Malta, and Turkey.

While the following list is not exhaustive, the following countries offer well established residency by investment programs (also referred to as Golden Visas): Italy, Spain, Portugal, Malta, Cyprus, the Netherlands, Greece, Turkey, Mauritius, Uruguay, Panama, Peru, Hungary, Ireland, Georgia, Guernsey, the Isle of Man, Monaco, the UK, Ukraine, Antigua and Barbuda, Thailand, Brazil, Canada, Costa Rica, Ecuador, Montserrat, Cambodia, Hong Kong, Iran, Kazakhstan, Malaysia, Singapore, Botswana, Egypt, Seychelles, Australia, New Zealand and Vanuatu.

While you could ostensibly gain citizenship in another country through regular naturalisation, e.g. by marrying a citizen of that country and settling there or gaining employment as the basis for your residency, both potentially leading to eventual citizenship, investing for citizenship is typically a lot faster and less onerous.

With most of the world’s leading Citizenship By Investment Programs, you have the option of making a substantial donation to the government (priced from $100,000 for a single applicant) or investing in government approved real estate. The latter option could involve either having to invest in a government approved real estate development, or purchasing a property with a minimum value determined by the government in a specific eligible location. In some instances, such as with the CIPs of Montenegro and Malta, for example, the investment requirement is a blend of donations and investments.

While there is some measure of overlap between Golden Visa Programs and investment residency programs, the terms again tend to get used interchangeably. A key difference is the fact that Golden Visa programs frequently (if not exclusively) require an eligible property investment, whereas residency by investment programs tend to be more focused on encouraging business investments or new company formation leading to job creation in the host country.

“Golden Passports” is the term used, both colloquially and in the media, to refer to second passports obtained through Citizenship by Investment programs. Unlike with investment residency and Golden Visa programs, golden passports are generally acquired more directly, if not quite immediately, and not through regular naturalisation.

The Caribbean Citizenship By Investment Programs of countries such as St Kitts and Nevis, St Lucia, Antigua and Barbuda as well as Grenada are widely associated with these so-called “Golden Passports”, however Cyprus, Malta, Montenegro and Turkey also offer comparable programs.

Golden Visa Program generally refers to instances where governments have opted to formally package and promote their residency by investment by investment programs as convenient, low-admin investment products enabling applicants to gain the right to settle in a country without obligating them to actually up sticks and relocate – hence these informally being referred to as “Plan B” emigration solutions.

These programs are typically attractive to individuals or families with concerns about the social, economic, political or environmental stability levels in their country of origins.

While formerly clients would fall into either the second residency or citizenship categories, recent global events and the Covid-19 pandemic, in particular, has seen a converge in terms of these client requirements. In addition, education and eventual employment opportunities for the children of so-called economic migrants is frequently cited as motivating factors.

As with the terms citizenship and residency, citizenship and nationality are used fairly interchangeably. However, again, there is a clear difference between the latter two concepts, legally speaking:

• Citizenship is a term used to the status of a person recognised under the law or custom of a sovereign country as belonging to or being a member of that country. This status generally carries with it recognition of rights and privileges not afforded to non-citizens, including civil, political and social rights, although of course there are some exceptions to this.

Each sovereign country is free to determine the criteria for recognizing individuals as its citizens, even within political unions such as the EU, along with the criteria for when this citizenship status can be withdrawn.

Gaining citizenship status in a country generally carries with it the right to vote, the right to a passport of that country, as well as the right to live there, work there, and access the country’s health services, if such are made available to citizens.

• Nationality generally covers the same criteria, with the key difference that the above rights are attributed to a person on the basis of them having been born in that country. Somewhat paradoxically, then, a person holding dual citizenship is frequently referred to as holding dual nationality, although the term dual citizenship is technically more correct.

The term nationality is also frequently referred to group people in terms of their origin, traditions, race or religious background.

Most laymen, including even seasoned journalists, frequently use the terms residency and citizenship interchangeably, yet there are distinct differences between the two. In essence, obtaining residency or even permanent residency in another country simply refers to gaining the right to lawfully remain or settle in that country.

Doing so does not give you all the rights, such as access to free public healthcare or voting rights, as would normally be the case for native citizens or individuals whom have obtained those rights either by birth or by regular naturalisation. Gaining residency rights may also not affect your tax residency status unless you spend significant amounts of time living and working in another country.

For many European countries, for example, you’ll need to spend more than 6 months per year in-country before you start being obligated to pay income taxes.

It is not a coincidence that countries like Spain, which allows self-employed foreigners to gain residency by business formation, requires these new residents to spend more than 6 months per year in-country in order to maintain their second residency status.

As a rule of thumb, no country wants new residents or investment citizens to become a financial burden unto the state, hence economic residents are typically required to have comprehensive health insurance in place, both for themselves and for their dependent applicants.  

Countries offering direct economic Citizenship By Investment (CBI) programs similarly factor the potential burden of a new citizens into the investment or donation required in order to obtain such status.

As a rule of thumb, applicants seeking the ability to go settle (or potentially settle) in a specific country other than their own will opt for a residency by investment solution. Doing so is generally referred to as “having a Plan B”, and may involve either buying a government approved property in that country (either in terms of a specific development or based on a minimum investment requirement), or through new business formation as the basis for a obtaining second residency status.

Depending on the country and residency program in question, you may be able to either invest in property, create jobs, or make a passive business investment in order to obtain residency status. Depending on the country you choose as your Plan B destination, there may also be minimum stay requirements associated with maintaining your second residency status.

 In contrast, many applicants seeking the benefits of enhanced global mobility and visa-free international travel opt for second citizenship by investment programs.