Citizenship investment programs have been in existence for over three decades. Countries use them to attract foreign investors who can help boost the economy.
It is expected that all those foreign investors who want to invest for citizenship will acquire assets in the country or start businesses that will employ a large number of people.
When this happens, the program will have achieved its intentions
As more and more countries all over the world start their citizenship investment programs, there are some observable trends. Like everything else, these programs have had sufficient time to manage and grow. Whether they are starting or are already established patterns, you can only see trends in programs over time.
Here are some of the trends in these programs that need you to invest for citizenship.
A notable trend in the citizenship for investment programs is the fact that they are highly exclusive. These programs target only high-level individuals and their families. When marketing these programs, countries do so only to high-net-worth individuals.
This makes the programs highly exclusive and a preserve of the wealthy.
Mostly, this happens due to the amount set as a qualifying investment for the program. There are a small number of individuals from all over the world who can afford the amounts of investment required.
If you want Portuguese residency, you have to invest in qualifying real estate to qualify for the program. If you are approved and are allowed residency for five years. You can then apply for citizenship afterwards. You need to hold onto your investment for at least five years during your residency. This starts from just 280,000 Euro in low density areas that will be announced in law in 2021. They also offer a popular rehabilitation golden visa in Lisbon, Portugal for 350,000 Euro which is set to finish by July 2021, but this law has not yet been passed. In 2022 the laws on citizenship by investment in Portugal changed but you can still buy in Lisbon and the Algarve as long as any Apartment has a touristic license or the property is classed as Commercial. These are very safe and secure investments as they all come with a rental guarantee which suits 99% of overseas buyers.
Golden Triangle, Algarve Portugal
From 280,000€
This 280K Golden Visa touristic property listing is located in the Fonte Santa, considered to be a part of the Algarve ́s Golden Triangle,...
Even as countries running these programs need more foreign direct investment, the programs are becoming highly restricted.
As more and more investors enter a country, the property targeted for investment becomes expensive. In this case, real estate. And many problems can arise in a country when people can’t afford their properties. As a result, many countries are limiting the programs.
For example, Portugal, an attractive second passport destination, recently changed rules governing how citizenship investors will now invest. The country’s parliament passed a resolution that citizenship investors will no longer invest in property in the major cities.
This is as a result of how badly locals couldn’t access, own, or rent a property. As more and more investors acquired investment properties, they converted them to tourist properties. Residential properties became hotels and short-stay apartments to serve tourists who don’t stay long.
Consequently, property in the city’s periphery became too expensive. Locals can no longer afford their previous homes as they change to tourist serving destinations.
Portugal’s parliament, therefore, passed a resolution that investors in citizenship or residency programs will no longer qualify by investing in property in the cities. Investors are now encouraged to invest in rural regions for the Golden Visa in 2021. This law has now been revised, and city investment is fine as long as the property carries a certain license.
Citizenship investment programs are also increasingly restricted in Europe. The EU parliament is probing many of the existing programs. Checking whether they operate above board or below for the work they do.
Over time, there has been corruption in how countries offer their passports to investors. The EU parliament also doesn’t want to be associated with corrupt individuals who hide their money in any of their countries. Portugal has a safe and strict legal system, and all legitimate buyers are welcomed and honored.
Bitcoin is the most popular digital currency in the world. Its success and popularity have led to countries seeking to create a digital currency for their countries. China is likely to be the first country to unveil its fully digital currency in 2021.
The value of Bitcoin against the dollar has supercharged. Bitcoin is now valued at about $30,000 for a single full piece. Most times, the value of Bitcoin is erratic. As such, it has never been used in major transactions such as citizenship with investment programs.
Until recently, as the value of Bitcoin rises, it is much easier to turn it into large amounts of money. There are new immigration consultants assisting Bitcoin holders to acquire residency in counties of their choice after paying with Bitcoin.
As it becomes more popular, it is becoming widely accepted as a major store of value for the dollar. Its popularity has led to a surge in its value. This has led owners to come into large amounts of money both digitally and physically all of a sudden. This has caused the recent demand for Bitcoin payments by investors.
With more immigration consultants introducing the use of bitcoin to invest, we are likely to see this trend grow in the coming years.
Getting a Golden Visa needs to a cash transaction from a bank account in the buyers name. Crypto is NOT accepted in Portugal at this time.
Over the years, there has been a rising interest in citizenship for investment programs. Many inquiries then convert to investors coming to their preferred country to view properties and make their investments.
However, as the number of investors has risen, countries running the program have relaxed some rules. One of the rules that has been greatly relaxed in countries running the program is the need to reside in the country.
Many countries allow applicants not to live in the country. Even when making your application, you don’t need to visit the country.
Different countries working with immigration consultants allow you the investor, to complete all stages of your application process without leaving your country or wherever you are,
This is another trend that has picked up, and many countries want you to apply for citizenship at the comfort of your home. It is possible if that is what you want to do.
Many countries specify a few immigration consultants that can help you start the process from the start. You will fill out your application forms and explain the type of investment you would like. Your consultant will then use their contacts in the country to get you a range of applicable investment properties.
Once you have identified your property, your consultant will get in touch with the owners of the property. You will then make a downpayment on the property. Afterward, the government will receive your application and carry out their due diligence.
Once you are approved, you will need to complete your investment property purchase. If you are investing in any other kind of property, you will also need to complete it at this time. Your consultant will help you.
Depending on the country of application, you will receive your passport in 2-6 months.
China and Hong Kong produce the majority of people who take up the citizenship investment program.
As China has developed, there are a large number of people who have been lifted from poverty. These people have been exposed to other countries and cultures and would be willing to leave their country to become citizens in another.
Similarly, Hong Kong residents have had political turmoil for months now. High net worth individuals in the country are seeking other countries to which they can run if the conflict ever happens again.
Every country that runs citizenship by investment program has Chinese as the leading population taking up the program.
For example, Portugal which runs a Golden Visa program, has always had Chinese citizens as the largest number of applicants since they started running the program. And every year, the number of Chinese applicants grows
Applicants to citizenship investment programs are surprised at the speed at which they receive their second passports. After application, the country you have applied to carries out due diligence to get to know more about you.
Once they have verified the information you provided, you receive a message that you have been approved for the program. At this stage, you will complete your application and make the necessary investments. For those who are not approved, your part investment money is refunded.
When you apply to Vanuatu, another Caribbean island country, you will have your passport in thirty days after you are approved to participate in the program. This is the fastest citizenship for investment program in the world.
In Portugal, you are first granted residency. Residency is valid for five years. You can live in the country or not. However, you have to meet the required minimum stay period, which is 7 days every year, or 14 days per two-year period. After the five years of residency are over, you can now apply for citizenship.
Spain has a similar route to Portugal. Only that it doesn’t have a minimum stay period in the country, and, you can get citizenship after a ten-year residency period.
A common reason why people apply for a second passport is to minimize or to better plan their tax obligations. Different countries have different tax payment rates. For some countries, tax is exorbitantly high. Therefore, high-income earners feel the need to lower their tax obligations to have more disposable income.
When looking for a second passport that will help you plan your tax better, there are several factors you need to consider. First, you will need a tax expert to advise you on how your tax payment will be affected as a dual citizen.
Second, depending on the country that you are applying to, you need to know what the tax rates in the country are. As a dual-citizen in the country, what income are you expected to pay tax on? What are the rates of tax on the income that you earn?
When you have the right answers to these questions, you can now engage an immigration consultant who will help you find the best second passport for your needs.
Countries that offer citizenship investment programs know that many people applying to the program will check on the tax rate. Thus they will ensure that their countries have favorable tax rates to attract as many people as possible.
For example, as an American citizen, you are likely to pay an inheritance tax of up to 40% of the value of the wealth you inherit. To protect your wealth for future generations, you will have to give up your American citizenship and pick St Kitts and Nevis as your new home,
St Kitts and Nevis don’t tax inheritance, gifts, or capital gains, among other incomes taxed in other countries. Making it an attractive second country for tax purposes.
In a more connected world, business people find themselves running businesses in diverse parts of the world. They find themselves having to plan their work around their travel schedules. This is so because they need to first get a visa to the different countries they need to travel to.
To eliminate the hustle of having to apply and wait to receive a visa, many busy business people will opt for a second passport. The more powerful the passport the better.
A passport’s power is determined by the number of countries you can travel to across the world visa-free. With a powerful passport, a busy business executive can travel with ease. As soon as the need to travel arises, they will. As they now don’t have to wait for a visa.
With a Portugal passport, you have access to 186 countries visa-free. You are a European citizen or resident with access to EU countries and more visa-free.
Many of the EU and Caribbean island countries running citizenship with investment programs have powerful passports. With St Kitts and Nevis passports, you can travel to at least 150 countries visa-free. The Grenada passport will allow you visa-free access to 144 countries which include the UK and the US.
For EU countries, the German passport will allow you visa-free access to any country in the EU. In addition to over 150 countries of the world.
Citizenship by investment programs are changing their requirements and the way they run. This is as more countries come up to compete with the original implementers of the idea. New entrants in citizenship programs have favorable terms for investors to ensure that they attract as many as they can from other countries.
Some of the major changes introduced by the new entrants of citizenship investment programs are in the investments needed for citizenship.
Traditionally, to qualify for the program, you need to invest in real estate as stipulated by the managing country. However, new entrants have other methods to ensure more people can qualify.
One of the cheapest methods to use is donations. Vanuatu, a new entry into the citizenship investment programs, requires applicants to donate a minimum of $150,000 to qualify for a passport. They also have a real estate investment option if you prefer to, but most buyers prefer solid real estate in leading European capital like Lisbon, Portugal.
In Portugal, where you will get residency first before you can qualify for citizenship, you qualify for a Golden Visa program if you start a business that employs at least 10 people permanently.
Countries have more options in addition to the real estate investment option. This helps to attract more applicants to the program. As these programs are a way to earn a foreign direct investment, thus more applicants result in more foreign direct investments.
Countries running citizenship investment programs have enhanced their due diligence capability.
It is becoming increasingly important to go through the documents and lives of applicants thoroughly. Countries running these programs don’t want to find themselves offering citizenship to terrorists and corrupt foreign government officials.
Consequently, it has become very important to find out who the applicant is, their sources of income, whether they have a criminal record, and more about their lives. This thorough due diligence also extends to family members of all applicants who qualify for the program.
This due diligence process takes time. As a result, it delays the issuance of passports which would be done much faster.
However, countries want to maintain the power of their passports. Without a proper background check on the applicants, they may use their passports to harm any of the countries they can enter without a visa.
Thus to protect their reputation and to maintain the power of their passports, countries with these programs need to carry out enhanced due diligence on their applicants.
Another noticeable trend in citizenship investment programs is the fact that more people are getting into the program to help grow their businesses. These are people seeking geographic growth for their business operations.
When you register a business in any of the EU countries, it is registered in all of the EU countries. Thus, your business is recognized as an entity in any of the EU countries. If you are carrying out a business that is not allowed for foreigners in any country with that country’s passport, you are no longer a foreigner.
As you can see, there are many benefits for business owners to having a second passport. Thus, a citizenship investment program is ideal for them.
Business immigration is growing even more as more and more global ebony countries start becoming nationalistic. With Brexit, there will likely be a lot of business immigration into the UK or the EU region. This will ensure that affected businesses keep running smoothly.
Another reason why business immigration is growing in popularity is the fact that any money used in the citizenship investment program can be passed as business expenses. This then encourages many business owners to take second passports for the benefit of their businesses.
As it stands now, more and more countries are running citizenship investment programs. In 1984 when St Kitts and Nevis made the first-ever citizenship for an investment program, it was viewed as a creative way to attract foreign direct investment.
After the financial markets crash of 2008, more countries that can’t be considered small also began similar programs.
Portugal, for example, began their Golden Visa program to attract foreign direct investment into the country to help boost rebuilding efforts. It was badly affected by the market crash. Everywhere you looked in Portugal were incomplete building shells. The Golden Visa program has been very beneficial to Portugal. This has prompted other EU countries to do the same.
Besides, even economically superior countries such as the US and the UK also run citizenship investment programs. These provide citizenship to foreigners who start businesses that create employment for hundreds of people in these countries.
In the quest to boost the economy and living standards of their populations, citizenship investment programs are no longer a preserve of smaller countries seeking foreign income. Large economic superpowers are also well represented in these programs.
Conclusion on Citizenship by investment
Citizenship investment programs were introduced in the 80s. Over this time, they have moved from a preserve of small countries. As the world changed, more and more countries accepted them as a source of foreign investment and implemented them.
The above trends have been observed in many citizenship by investment programs. There are more ways to invest without only being stuck in real estate. More countries with a higher standard of living are also participants of today’s citizenship programs.
Everyone who can afford to make the required investment is welcome and approved only after extensive due diligence.
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