Which Investment Option Is Right For You?

We live in an increasingly connected world, and many savvy high-net-worth individuals are beginning to realize the value of a second citizenship. In a globalized world, it’s no longer necessary – or desirable – to be tied to the country of one’s birth. Whether reducing one’s tax burden, diversifying one’s portfolio of available visa-free destinations, or simply setting up a second home, there are many reasons to consider obtaining a second passport.

Citizenship by investment is, by far, one of the best ways to obtain that second passport. But there are many forms of investment that fall under the umbrella of CBI applications, and it can sometimes be tricky figuring out which is the best one for you and your financial needs.

During the course of this article, then, we plan to take a look at each of the investment options typically offered on CBI programs. What are the strengths and weaknesses of each? What are the requirements of each one? And which one might be best suited to you?

When it comes to CBI options, there are usually a number of options on the table. Note that this is not universally the case, however – some countries (like Vanuatu) will only offer a one-time donation as a valid path to citizenship, while others may only offer two or three options.

Without further ado, let’s take a look at the investment options that are typically offered on CBI programs.

Donation

The most common and straightforward way to satisfy the ‘investment’ part of a citizenship-by-investment application is, quite simply, to make a donation to a fund.

The name of this fund varies from country to country. In the most common CBI countries, it’s named:

• National Development Fund, Antigua & Barbuda: $100,000
• Economy Diversification Fund, Dominica: starts at $100,000 and scales according to the number of people included on your application
• National Transformation Fund, Grenada: starts at $150,000 and scales similarly to Dominica’s
• Sustainable Growth Fund, Saint Kitts & Nevis: $125,000, scales similarly to Dominica’s
• National Economic Fund, Saint Lucia: $100,000
• Development Support Program, Vanuatu: $130,000

As we’ve seen, the amount required to donate depends on the country, but tends to be between USD $100,000-200,000 (although most are on the lower end of that scale).

Donation Pros

Donations tend to be the lowest cost way to a second passport on any CBI program, so if you’d like to get things done sooner rather than later, then this is the route for you. They also involve less paperwork and fewer incidental costs than other investment methods.

Donation Cons

With this option, you’re not making an investment that you can recoup – all donations are non-refundable, so that money is lost forever.

It does help, however to think about a donation in a more positive light. You’re making a non-recoupable payment, sure, but you’ll be a citizen of your new country faster than with other options – which often means huge savings in tax.

Real Estate Investment

Another popular pathway to citizenship by investment is purchasing real estate. The value of the real estate that must be purchased varies from country to country – as does the length of time for which the real estate must be held.

Though almost all CBI countries allow the purchase of real estate in order to obtain a second passport, Vanuatu is notable in that it does not. This one exception aside, the amounts needed (and the length of time before you can sell it) for each country are listed below:

• Antigua & Barbuda: $200,000 (5 years)
• Dominica: $200,000 (3 years)
• Grenada: $220,000 (5 years)
• Malta: 700,000 euro (5 years; also requires physical residency in Malta)
• Saint Kitts & Nevis: $200,000 (7 years)
• Saint Lucia: $200,000 (5 years)
• Türkiye: $400,000 (3 years)

With the exception of Türkiye, all properties must be government-approved. However, that doesn’t mean that you can simply buy any real estate you like in order to qualify for the CBI program – there are still a number of governmental requirements and regulations to satisfy when opting for the real estate route in Türkiye.

Pros Of Real Estate Investment

Unlike a donation, real estate isn’t a sunk cost; you can make your money back. If you invest wisely, you can even turn a profit.

Cons Of Real Estate Investment

Real Estate investment in general involve more ancillary fees (e.g. property taxes, legal fees) than a donation, which means that you’ll end up out of pocket anyway.

Another drawback of real estate investment is that, with the exception of Türkiye, the real estate must be pre-approved by the government. This often means that you won’t be getting great-value property that appreciates, and there’s usually a caveat whereby you cannot sell the property on to other CBI applicants. That means that the real estate investment route can often leave you holding a white elephant.

Government Bonds

Another relatively straightforward method of obtaining citizenship by investment is with the purchase of government bonds. You simply buy the bonds, hold onto them for a pre-determined period of time, and then redeem them.

CBI countries that offer government bond purchases are listed below, along with the amount and amount of time they must be held:

• Saint Lucia: $300,000 (5 years)
• Türkiye: $500,000 (5 years)

Government bonds purchased in this way do not accrue interest.

Pros Of Government Bonds

Government bonds, unlike real estate, cannot depreciate, and thus cannot lose value. Furthermore, you do not need to look for a buyer – you can just redeem them after the allotted amount of time has passed.

Cons Of Government Bonds

On the flip side of the coin, government bonds cannot appreciate. You therefore will not be making a return on them.

Business Venture

A handful of countries permit CBI applicants to invest in a business. These are limited compared to other methods, and generally require a much larger investment.

Countries that allow business ventures as a route to citizenship by investment, along with the requisite investment amount thereof, are:

• Antigua & Barbuda ($1.5 million or $400,000 if part of a group investment of at least $5 million)
• Türkiye ($500,000 or the creation of at least 50 jobs)

In Türkiye, the business or shares may be sold after three years. Antigua & Barbuda does not specify a time limit on theirs.

Pros Of Business Ventures

Unlike real estate investment, business ventures are a lot freer. You can pick and choose where you invest your money, and so you’re free to do some market research and try to make sure that whatever business you invest into/create is profitable.

Cons Of Business Ventures

The cons of business ventures are the same as those of a real estate investment; additionally, if looking to invest in a business, your options are much more limited due to the fact that only two countries offer it.