Citizenship By Investment: What Are Your Investment Options?

If you are a high-net-worth individual, nothing makes more sense than a second passport. It avoids having to be shackled to the whims and strictures of a single given nation when it comes to your family’s wealth, and affords you a great many more options for international travel.

Citizenship by investment is therefore an excellent idea in this instance. However, it pays to do your research before diving in feet-first. What sort of costs are involved when pursuing an application to a CBI program? What investment options are open to you? And how long will the whole process take?

All of these questions – and more – are pertinent when considering the best CBI option for you and your family. Let’s take a more in-depth look at the most important issues to take into account when thinking about investment in a citizenship.

Citizenship by investment is therefore an excellent idea in this instance. However, it pays to do your research before diving in feet-first. What sort of costs are involved when pursuing an application to a CBI program? What investment options are open to you? And how long will the whole process take?

All of these questions – and more – are pertinent when considering the best CBI option for you and your family. Let’s take a more in-depth look at the most important issues to take into account when thinking about investment in a citizenship.

Citizenship by investment is exactly what it sounds like – investing in a country’s economy in order to become a citizen of that country.

Note that this process does not mean that you are ‘buying’ citizenship – very few countries, if any, are willing to put citizenship up for sale in such a way. Rather, it means that, in recognition of significant economic contributions to the nation, you can apply for citizenship without having to meet any skills or language requirements, or often without spending any time in that country.

Generally, yes. Most countries that offer CBI programs have a mandatory minimum cooling-off period before you can sell government bonds, real estate, or other assets, but usually it is possible. The minimum period for many CBI programs is 5 years.

There is no one answer to this question, as it really depends on the country in which you are investing. However, there are costs and fees that you can typically expect to pay. Let’s break them down in more detail.

The Investment

Citizenship by investment necessitates – by definition – an investment of some kind. Generally, there are multiple options that the form of that investment can take. The most common types of investment include the following:

Contributions To Economic/National Development Funds

Popular in the Caribbean and Vanuatu, contributions to funds variously named Sustainable Growth Fund, National Development Fund, or other similarly named funds are often the most cost-effective path towards Citizenship.

The upside to this option is that it is fast and does not leave you saddled with real-estate assets or other assets that may be a hassle to sell later. On the other hand, the money you put into such a fund is non-refundable, meaning it is a sunk cost you can never get back. However, when you factor in the savings you will be making on taxes, it might not work out to be such a sunk cost after all.

Contributions/Donations made in this way vary from country to country, but you can expect to pay between $100,000 (typical for most Caribbean CBI programs) up to 600,000 euros in Malta.

Purchase Of Real Estate

One of the more popular options when it comes to CBI programs is the purchase of real estate. Unlike a contribution to a national fund, real estate can be sold at the end of a predetermined period (often 3, 5, or 7 years). This means that you can often recoup your initial investment and walk away with a second citizenship in addition.

However, in most instances, the real estate purchased must be Government-approved.

Real-estate costs vary, from around $200,000 (on the Caribbean islands) up to 700,000 euros in Malta.

Türkiye’s real-estate program is of particular note. The program requires the purchase of real estate worth USD $400,000 or more, but it can be any – not just government-approved real estate. This opens up your options considerably and means you can be much more assiduous in selecting real estate with a view to making a profit on it down the line.

Purchase Of Government Bonds

Some CBI nations allow investors to purchase government bonds. This is not as common as real-estate investment or contributions to economic funds, but is nevertheless an option for some CBI programs. The two most notable CBI programs that permit government-bond purchases are St. Lucia (USD $300,000’s worth; they do not accrue interest and can be redeemed after 5 years) and Türkiye (USD $500,000’s equivalent in Turkish Lira; may be sold after 3 years).

Purchase Of A Business

Some countries permit the establishment or purchase of a business in order to qualify for their CBI program. Such countries include:

• Antigua & Barbuda (minimum investment of USD $1.5 million)
• Lucia (minimum investment of $3.5 million as an individual, or $1 million as part of a group investment valued at at least $6 million)
• Türkiye (minimum of $500,000 invested into a business, or the establishment of a business that creates at least 50 jobs)

Investment Summary

As we can see, the amount you need to invest depends on two basic factors:

• the country selected (with Caribbean countries generally being cheaper than Malta or Türkiye);
• the method of investment (with donations being speedier but non-refundable, and real-estate/government bonds/business purchases featuring mandatory cooling-off periods, but offering returns on your investment);

All told, you’ll be looking at investment costs of between USD $100,000 – $1.5 million. In broad terms, the more you invest, the more likely you are to see a return on that investment.

In addition, Malta is the expensive outlier, and requires two donations and the purchase/rental of real estate before you’re considered eligible. In total, expect to lay down around 1.5 million euros –around half of which you can recoup. This is the trade-off for a very desirable passport in a very conveniently-located country.

Other Costs

Most countries have incidental costs in addition to the investment requirement. These include legal fees, stamp duty, administrative fees, and due-diligence fees.

These fees vary from country to country, but typically speaking they scale along with the number of people included in the original application.

For instance, Antigua & Barbuda levies a due-diligence fee of USD $7500 for a single applicant, $15,000 for a couple, an additional $4000 per adult family member, and an additional $2000 per minor. There is also a ‘Government fee’ of $30,000 that covers a family of up to four, with an additional $15,000 due for each dependent past the fourth.

Speaking in broad terms, extra fees that you will encounter may take the following forms:

• Administrative/processing fee (up to USD $2000);
• (For real estate) Additional government processing fees (up to $30,000);
• Passport processing fees ($200 approx.);
• Legal fees ($3000-7000);
• Due-diligence fees ($7,500 per main applicant/spouse; $4000-5000 per applicant thereafter);
• Miscellaneous costs (courier fees, banks fees, translations, etc. – $500-1000).

This means that, in certain cases, you may need to pay an additional $50,000 – $100,000 in fees before your application will be processed. These fees are, naturally, non-recoverable.

The good news is that passports obtained via CBI programs are typically processed very quickly. You can expect to become a full citizen of the country you have chosen – and receive your new passport – within 2-4 months in most cases. Often, you won’t even need to visit the country in question – simply make the application, pay the relevant fees, and everything else will be taken care of.

Note that Malta is an exception from this; citizenship cannot be obtained in less than one year – and even then, only if the applicant voluntarily makes a larger donation. In most cases, it will be three years before you receive your passport. Bear this in mind if considering this country’s CBI program.

Simply put: the sooner, the better. There is no reason to hold off, provided you have done your research and you are happy with the country you have chosen. The only real question is what method your investment will take; this decision will, naturally, inform whether or not you will be expecting a return on your investment, or whether you will be treating it as a one-time donation in exchange for a passport.

It is important, however, to ensure that you do your research. Every country’s CBI program has its advantages and disadvantages depending on your specific circumstances, and it is worth thinking about what is more important to you – a more versatile passport and prestigious citizenship (as in Malta’s case), or affordability and speed at the cost of a little of that versatility (as in the case of many Caribbean nations).