What Is Residency by Investment?

Residency by investment programs allows foreign national investors to invest in a foreign country and get residency by investment countries.

Usually, you get a temporary residence right following a qualified investment. After a certain period, you can apply for permanent residence. Residency by investment visa programs offers an accelerated process to get permanent residence, compared to traditional applications. 

Depending on the conditions of the specific program, you may obtain citizenship as well. However, it takes a certain period of time and other requirements. 

In this article, you’re going to find more detailed information about the reasons why investors apply for this program. Also, you’ll find out the requirements to apply for residency by investment programs.

Difference Between Temporary and Permanent Residence

Temporary residence status offers you the right to stay in a foreign country for a certain period of time. You can obtain this status after investing in certain countries.

In general, a temporary residence right allows you to reside, work, study, and do business in that country. It does not require you to become a citizen to have these rights.

A temporary residence permit is generally valid for one or two years. Then, you need to renew it each year or every two years. 

Permanent residence status can become available after you complete a required period of residence. On average, the duration is five years. You may be subject to other specific requirements as well, depending on the country you’ve applied to. The permanent residence gives you the right to reside, work, and study in the country indefinitely. You don’t need to become a citizen to be a permanent resident. Typically, a permanent residence does not enable you to vote or run for office.

Why Invest in a Residency by Investment Visa Program

Investors choose residency by investment programs to benefit from extended rights. These rights include mobility between countries, a quality lifestyle, and quality education and healthcare services.

The programs also allow investors to add their family members, and to protect their assets. 

You can find more detailed information about the reasons below.

Extended Mobility Rights 

Residency by investment countries in Europe allows visa-free access to Schengen countries. Portugal, Greece, Spain, and Malta are among the countries offering this mobility. So, you can travel to 26 EU countries visa-free.

Another benefit is that you can travel between countries more easily because you have a residence permit. This means that you’ll deal with less paperwork, and you’ll save more time. This proves useful especially if you’ve business interests or safety issues in your country of origin. 

High Quality of Life and Security

Many countries offering residency by investment programs have proved that they have high living standards. Also, they rank high in safety and stability in politics and the economy. The healthcare and education systems in these countries are also quite developed.

Some investors consider these programs to avoid political unrest in their country of origin. In this way, their families also have a second home to come to when they feel unsafe. 

Family Inclusion

Another important feature of these programs is that you can include your immediate and/or extended family members. Most countries allow your spouse and dependent children to apply with you. 

In this way, your family members get the same rights as you. So, for example, your children can study in the host country. They can also have access to healthcare services as well. Citizenship applications will be available for them as well, after fulfilling the relevant requirements.

Countries like Greece even offer extended family inclusion. Besides spouse and children, it allows you to include your parents and parents-in-law.

Business Purposes

Residences by investment countries have developed economies, and they offer an international environment for workers. They’re also open to new businesses established by foreign investors. The workforce in these countries is also quite skilled and productive. 

So, investors also use these programs as an opportunity to expand or establish a business in another country. 

Tax incentives also contribute to investors’ interest in doing business abroad. 

Tax Benefits

Some countries offering residence by investment do not require certain taxes. These taxes include inheritance, gift, or capital gains taxes. In addition, some of them also offer quite low-income taxes. 

Eligibility Requirements To Apply for Residency by Investment Programs

Although each country entails its own requirements, there are certain basic rules you need to obey in general. Some of the common requirements are:

• To have a clean criminal record,
• To indicate the source of your investment fund, and
• To invest in one of the required options. For example, investing in real estate, a national fund, or government funds.

In addition to the ones above, some countries require a minimum period of stay in the relevant country. On the other hand, countries like Greece do not impose any stay requirement at all. Also, you need to maintain your investment for a certain period of time. The minimum required periods vary from one country to another. On average, the holding period is between two and five years. 

Countries like Portugal also offer investment in units of investment funds or venture capital funds. 

How Countries Benefit From Residency by Investment Programs

The programs are a beneficial way to attract foreign direct investment. These gained funds are then used to invest in the country’s economic or cultural projects. In this way, the host country’s economy is boosted. 

Also, these investments provide sustainability in the relevant country’s economy. For example, an investor chooses to establish a business in a foreign country, to get residency. This business creates job opportunities for other residents in that country. Portugal offers this option for investor residency. 

Popular European Countries Providing Residence by Investment 

Also known as Golden Visa programs, residency by investment programs in Europe have become more popular in recent years. 

One of these countries is Portugal. It offers many options to become eligible to apply for Portugal Golden Visa. They include real estate investment, investment fund options, capital transfer, and the creation of jobs. 

The initial residence permit is valid for two years. Then, you renew it for a further three-year period. It offers permanent residence and citizenship at the end of five years of residency. 

Greece is another option if you consider EU residency. The country does not require you to stay there to maintain your residency. Also, you can renew your residency status every five years indefinitely. 

Malta also offers a residency by investment program. Like Greece Golden Visa, Malta’s program also does not entail any stay requirement at all. You also don’t need to make an investment before your application is approved.

Spain is another European country you can apply for. You don’t need to stay in Spain to maintain your residence status.