An increasing number of countries around the world have begun to offer investors the option to gain dual citizenship. This provides important economic infusion of inward investment into these countries, positively impacting their economy while offering considerable benefits to successful applicants.
There are a whole range of reasons why those who can afford it seek out a citizenship by investment. In fact, most people probably have a number of different factors to consider when they are trying to decide which Citizenship by Investment Program (CIP) will be their best option. Here are the top 10 factors for potential investors to consider when evaluating a CIP.
1. Citizenship Goals
There are many reasons why it is a good idea to obtain a second or third citizenship. The question is, what reasons are most important to you? Are you primarily looking for access to new business opportunities, the ability to travel to more countries without visas, or planning for your family’s long-term future and education? You’ll want to carefully consider what is most important to you. Make sure you also think ahead in terms of the future. For example, if you have young children now, providing them with a second citizenship could open up a whole different range of options once they begin to consider university and/or their future careers. If your home country is in strife or experiencing dramatic changes in the local economy, government and/or tax structure, you’ll want to have a plan as to where you might want to move and/or relocate assets for protection of your family, additional security and preservation of your wealth.
There is a considerable variation in how long the application and approval process takes for CIPs. This varies by jurisdiction. Other factors include the type of investment you plan to select and how quick it will be for the necessary due diligence to be conducted where your finances and background to be assessed in your home country and other residence countries. If the second citizenship is part of a long-term plan then speed might not be a significant concern. If, on the other hand, you want the citizenship in order to take advantage of current business opportunities, start a child in school, or to quickly relocate to a country that is safer, then the speed of the application process could be a critical factor in picking the right CIP for you.
While you’re planning your dual citizenship, pay attention to what family options are offered as part of the CIP. Some CIP allow investors to gain citizenship for spouses and minor children. Others may allow the sponsorship of older children, parents and even siblings. In some cases, citizenship is only open to dependents while some countries will allow extended families to gain citizenship, as well. In addition, only certain countries will allow citizenship to be passed on to descendants and future generations. Be sure to evaluate the total costs to sponsor additional family members who you may want to include. This is another time when the versatility with regards to your extended family could make a considerable difference.
4. Residency & Citizenship Plans
Where do you want to live and where might you need or want to live in the future? Some CIPs require residency in the country whereas other programs do not. Even if you don’t want to establish residency in a new country now, you might want the option to do so later. Some CIPs are known as gateway programs as they act as a route to living in another country other than the citizenship country you are investing in, such as European CIPs that are in particularly high demand because citizens of one EU country have the right to live elsewhere within any of the 28 EU countries. This could allow you to relocate if political or economic stability becomes an issue in your home country or if your business interests take you elsewhere. You might want to live in the country seasonally so your children can attend university or in order for you to enjoy seasonal holidays in better weather, or even permanent relocation for a high standard of living and exceptional lifestyle choices. Always remember the overriding motive when choosing gateway citizenship by investment options, in many cases they cannot be compared to the big cities of Shanghai or Dubai, however may allow you access to relocation to London which is on par with your own high quality lifestyle choices.
If you plan to reside within the country of your new citizenship, pay close attention to the cost of living there. Make sure the style of living will appeal to you long-term. Decide if you want to live in bustling urban centre, a quiet hamlet, or near other wealthy individuals. Access to education and quality healthcare need to be considered. If frequent business travel is likely, look at the ease of access not just with regards to visas. You’ll need to make sure transportation will be readily available like proximity to a major airport, a regular schedule of international flights, or train service to nearby countries.
Determine the travel time necessary to reach your home country or places you’ll want to visit for work or pleasure. Be sure to include these expenses when you are planning the costs for the citizenship. For example, one reason the CIPs within the EU are so popular is citizenship there means quick access by air or train to key business and tourist destinations. Citizenship in some countries could open up the option to resident in the US or UK or other key business centres.
Citizenship by Investment Programs requires a considerable investment. There are substantial costs when applying, and many CIPs offer multiple types of investment options. CIPs often provide several ways to meet their investment requirements. This could include investing in real estate or a business, maintaining a balance in a local bank, or buying government bonds. Another option might be paying into a government development fund that might be non-refundable. Remember that investments will need to be maintained for a minimum period of time which varies from one jurisdiction to another. Not having these funds available for a few years could mean you have to delay making other investments or expanding your business.
In addition to the listed investment requirements, there are a number of other costs involved with applying for a CIP. This can include application fees, VAT (for real estate and other investments), legal fees, agency fees, government disbursements and additional costs to sponsor citizenship for family members. If the CIP of your choice requires visits to the country or relocation, be sure to factor in those expenses, as well.
6. Visa Free Access
Obviously, your current and future business interests will be a significant issue when selecting the best CIP for you. Consider what new markets or industries you might want to expand into during the upcoming years. Visa-free access to explore these markets could be important. Check which countries have agreements to facilitate your planned travel and investments. A passport for one country might allow you to gain temporary residency in a third country or pursue education or business opportunities there.
7. Application Requirements
Before you seek admission into a CIP, make sure you are familiar with the requirements for a successful application. Often investors first consider the financial requirement criteria, it is worthwhile noting that most countries do not allow for investment to be sourced from loan or mortgaged funds. CIP applications combine this with rigorous background checks and other vetting requirements. Countries conduct due diligence to ensure that they are not providing citizenship to criminals or politically exposes persons (PEPs), allowing the investment of ill-gotten gains or tax evasion. In order to maintain the country’s security, you’ll need to undergo the screening process which will require the transparency of your personal and financial information for application purposes. You’ll want to know what would happen to your investment application is rejected or if there are changes in your personal circumstances before the approval process has been completed and ensure that your investment is refunded. This needs to be considered carefully when choosing an immigration firm and Trusted Advisor, they should be a professional firm who will act to your best interests, protect your personal data and ensure that your financial status is treated with utmost discretion and confidentiality, only to be used for processing your application and not shared with any other third parties without your prior consent.
8. ROI & Taxes
All investments in CIP are not created equal. The amount of investment required, how long the investment must be held, and the expected resale value for real estate and other investments need to be considered. You should also bear in mind that lower investments are sometimes linked to non-refundable government donations and real estate rental yields can also warrant local taxation in the citizenship country. The expected changes to the value plus how easy it will be to liquify the investments in the future are important issues. Obviously, CIPs requiring investments to be held longer could lead to passing up the chance at applying that money to other business interests so the expected ROI should be considered in light of the opportunity cost of having the money tied up for that period.
For wealthy individuals, local tax laws are particularly important. Determine what citizenship in a particular country will mean to your investments and businesses elsewhere. Many CIP countries have preferential tax benefits on worldwide income for non-domiciled individuals and don’t tax income earned elsewhere, and do not have inheritance tax but it is vital to check. Some countries are also renowned as having very attractive corporation tax regimes and are favourable for tax structuring of your wealth and worldwide income, so do look into the tax treaties that the chosen citizenship has in place with other jurisdictions, to see if they are viable for your business and wealth planning and seek independent tax and financial planning from a credible tax advisory firm.
The stability of the country you’re considering for a CIP is an important consideration. Both the economic environment and the political situation can impact the safety of your investment and the long-term value of that country’s citizenship. If you plan to reside within that country, physical safety becomes even more important. Emotional security is another thing to consider, particularly if you’ll be bringing your family with you. You’ll want them to be in a cultural environment where they will feel comfortable and have the best social, cultural and educational opportunities you would want for them.
10. Independent Advice from Immigration Experts
Work with experienced citizenship by investment immigration experts to make sure you understand the rules and regulations that may apply to you once you are a citizen of a particular country. While most CIPs are designed to make it as easy as possible for applicants who apply for citizenship on an expedited basis, there are still other considerations to be born in mind such as the legal system of the citizenship relocation country and how they handles laws on succession planning, matrimonial matters, trusts, corporate taxation, Inheritance tax, education and healthcare to name but a few. Independence immigration experts will be able to direct you to unbiased advice and protect your interests with real estate purchase agreements and other investments. Be hasty in proceeding with citizenship with property developers who may have biased property sale agreements and clauses that may protect them as the vendor instead of you as the buyer, so choosing an independent law firm or immigration agent who understand the country’s laws and consumer rights will be more of a savvy decision. The application process can also be cumbersome and requires solid understanding of the CIP criteria, ensuring that application submission is done correctly and processed as quickly as possible, resulting in a positive outcome and successful dual citizenship.
Becoming a global citizen is a life changing experience. Choose a partner who can provide expert independent advice and walk you through the entire process. While applying you’ll want to work with a trusted partner who is well connected in the citizenship country of your choice, is well informed on all citizenship by investment programs and can guide you into making the correct life changing decision for a brighter future for you and your family. The CIP is your first step to securing your family and your trusted partner should then be able to hand hold all your other family office requirements and assist you in preserving your wealth and making the right choices for your family when relocating.
Astons is a leading global independent immigration advisory firm, offering residency & citizenship investment solutions in the UK, EU & the Caribbean. We can assist you in your dual citizenship choices and family office requirements and we work with a wide network of associates offering tax advisory, capital & asset planning and property services, protecting our clients’ interests at all times.
For further information on citizenship by investment or to discuss your personal circumstances in a private consultation, please contact Astons at [email protected]