Citizenship by Investment, or CBI, are programs that allow individuals to obtain citizenship in a foreign country by investing in real estate or donating to that country. While this process can be expensive, several potential benefits make it an attractive option for many people, particularly those in the developing world with limited visa-free access, wealthy families and high-net-worth individuals (HNWIs), and those seeking a Plan B in the event of war, natural disaster, or political upheaval.
In this article, we will explore the benefits of citizenship by investment and help you determine whether it is worth the money.
Advantages to Citizenship by Investment
Freedom for Future Generations
Another potential benefit of obtaining a second citizenship through a citizenship by investment program is the ability to provide greater freedom and opportunities for your children and future generations. By obtaining citizenship in a country that offers more opportunities for education, work, and travel, you can give your children and future generations the ability to pursue their dreams and reach their full potential.
For example, a passport from Antigua and Barbuda, which offers a citizenship by investment program, grants access to the CARICOM region, providing opportunities for education, work, and travel throughout the region. It also provides visa free access to the EU, UK, Singapore and other developed nations. This can be a major advantage for young people who want to explore the world, gain valuable experience, and build their careers.
Visa-Free Access to the Developed World:
One of the primary benefits of participating in a citizenship by investment program is the ability to travel more freely. Many people in the developing world face significant barriers when obtaining visas for travel to other countries. This often can be a significant impediment to business and personal travel, limiting opportunities for education, job prospects, entrepreneurship and personal growth.
With a second citizenship, individuals gain the ability to travel more freely and enjoy visa-free access to a wider range of countries. For example, a passport from a country like St Kitts and Nevis, which offers a CBI program, grants visa-free access to over 150 countries, including the European Union
Tax Benefits for Wealthy Families and HNWIs:
Another potential benefit of obtaining citizenship by investment is taking advantage of potential tax benefits. Many countries offer favourable tax regimes for HNWIs, including lower tax rates, exemptions for foreign income, and other incentives.
For example, Malta, which offers a mix of citizenship by investment and a golden visa program, has a favourable tax regime for HNWIs, including a flat tax rate of 15% for non-domiciled individuals and exemptions for foreign income and capital gains. Portugal’s residence and pathway to citizenship program also offer favourable tax treatment for HNWIs, including a non-habitual regime that exempts foreign income and dividends from taxation. By obtaining citizenship in one of these countries, HNWIs can take advantage of these tax benefits, potentially saving significant amounts of money in taxes each year.
Schengen Area, the United Kingdom, Russia and Singapore. This can be particularly valuable for people in the developing world who may face significant hurdles when obtaining visas for travel to other countries.
Opportunity to Live and Invest Internationally:
Finally, obtaining a second citizenship through a CBI program can provide opportunities for living and investing internationally. By obtaining citizenship in a country that offers a favourable business climate, you can take advantage of new business opportunities and gain access to new markets.
For example, a passport from St. Kitts and Nevis, which offers a CBI program, grants access to the European Union and provides a gateway to European markets. It also provides the ability to live, work, and invest tax-free anywhere in the CARICOM region, a network of Caribbean countries spanning from Central America to the Atlantic Ocean. This can be a major advantage for entrepreneurs and investors who want to expand their business operations and tap into new sources of capital.
In addition, obtaining second citizenship can provide opportunities for living and working in other countries. For example, a passport from the Grenada citizenship by investment program grants access to the United States through the E-2 visa program, which allows investors to live and work in the U.S. to manage their investments.
The Ultimate Plan B:
A fourth potential benefit of obtaining a second citizenship through a CBI program has a Plan B in the event of war, natural disaster, or political upheaval. With citizenship by investment, you can quickly and easily move yourself and your family to a safer location if necessary.
For example, if you live in a country or area prone to natural disasters such as earthquakes, hurricanes, or floods, obtaining a second citizenship in a more stable country can provide peace of mind and a safety net in the event of a disaster.
Similarly, if you live in a country experiencing political instability, acquiring citizenship by investment now can offer a means of escape and security for both you and your loved ones. The trouble is for most that once this situation happens, it’s often time-sensitive and too late to start the citizenship by investment process. In dire circumstances, fleeing the country might become necessary, and having citizenship by investment can provide a sanctuary where you can start anew. Given recent conflicts around the world, such as the war in Ukraine, these worst-case scenarios are now much closer to home.
Is Citizenship by Investment Worth the Money?
While there are several benefits to participating in citizenship by investment or CBI, it is important to weigh these benefits against the costs involved. CBI programs can be expensive, ranging from several hundred thousand dollars for some Caribbean citizenship by investment programs to over one million dollars for some European options.
One interesting trend is the disappearance of Citizenship by Investment programs, especially in the past 5 years. The OECD and western governments are putting immense pressure on these programs to shut down completely. Especially some of the more sought-after European and Caribbean programs could quickly become a thing of the past over the next 3–5 years. For example, Russians have now lost the ability to apply for most programs, and in February 2023, Portugal announced that they are eliminating their “Golden Visa” and defacto citizenship by investment program within the year.
Ultimately, whether citizenship by investment is worth the money depends on your individual circumstances and goals. For example, if you are an HNWI looking to take advantage of favourable tax regimes, expand your business operations, or reduce your tax burden, acquiring citizenship by investment may provide an excellent return on investment. Similarly, if you live in a country with limited travel opportunities or face political instability or natural disasters, citizenship by investment may provide valuable protection and freedom.
Citizenship by investment can be attractive for people looking to expand their opportunities and gain greater freedom and protection. Whether you are seeking visa-free travel, favourable tax treatment, or a safety net in the event of a disaster, citizenship by investment can provide valuable benefits. It is important to carefully consider the costs involved and weigh them against the potential benefits before making a decision. Ultimately, whether citizenship by investment is worth the money depends on your individual circumstances and goals.
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Offshore Freedom™ is a boutique coaching and consulting firm that helps investors and entrepreneurs live and invest internationally. We help our clients grow their businesses, pay less taxes, buy more real estate, and take advantage of global residency and citizenship by investment programs worldwide.
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This article is for informational purposes only; it should not be considered financial, tax planning, investment or legal advice. Consult a certified financial or investment professional in your jurisdiction of interest before making any major financial or investment decisions.
Writer in Tax Reduction, International Tax Planning, Travel, Citizenship by Investment, Second Residence, Real Estate Investing, Asset Management, Lifestyle Planning, Roatan Honduras, Company Formation, Offshore Banking, Asset Protection, Technology, Entrepreneurship
