There is an ever-growing interest in citizenship-by-investment programmes (CIPs) and investment residence permits (IRPs) from high net-worth individuals.
The chief source of enquiries is from countries whose citizens do not have visa-free travel and/or who would like an alternative passport to travel and/or a location in which to reside in the event of political or other issues in their country of origin. Russia and China figure largely on this list, as do a number of Middle Eastern countries.
What are CIPs and IRPs?
CIPs and IRPs are designed to attract foreign capital and business people by providing the right to residence and citizenship in exchange for investment. Although all CIPs and IRPs are different they have features in common:
- an investor receives a right to live in the country offering the programme, a right or path to citizenship in that country and the benefit of the country’s visa arrangements with other countries around the world; and
- the country administering the programme aims to attract foreign capital and talent, receiving a direct capital investment into state coffers or into the local economy.
A number of countries have now introduced CIPs and IRPs. Here we will look at two well-known programmes in Malta and Portugal, and a new one in Italy.
Malta
Malta’s flagship CIP is its Individual Investor Programme, the Malta IIP. It offers individuals and their families the opportunity to gain Maltese, and therefore EU, citizenship.
Maltese citizenship gives individuals the right to live, work and study in any of the 28 EU countries and Switzerland, and the ability to travel visa-free to more than 160 countries.
An individual must satisfy three financial requirements to be eligible for the Malta IIP: they must make a contribution to Malta’s National Development and Social Fund, an investment in stocks, bonds or special purpose vehicles and a Maltese real estate transaction.
The total upfront commitment, including application fees and government charges, amounts to just under €900,000 (£790,000, $1.025m) but this can vary dependant on the type of real estate transaction, ie whether a property will be purchased or rented, and the number of family members applying with the lead applicant.
Malta: key facts
Name: Individual investor programme
Type of investment:
€650,000 contribution to national development and social fund; and
€350,000 minimum property investment purchase, or lease €26,000 min annually; and
€150,000 government stocks investment maintained for five years
Residence: Family residence offered
Valid for: Permanent
Minimum stay: One-year residency before nationalisation
Duration of application: 18 months (approx.)
EU travel: EU citizens’ rights
Portugal
Portugal offers the Golden Residence Permit Programme. It gives non-EU nationals the ability to obtain residence status in Portugal. It can lead to permanent residency after five years and citizenship after six years as a resident. It lasts two years and a capital investment must be made into Portugal.
There are a number of investment options to individuals but the most commonly used is a €500,000 investment in real estate, which will gain a residency permit for a family including dependent children.
Minimum residency requirements for the renewal of the permit are modest; an individual need only reside in Portugal for at least seven days in the first year of residence and 14 days over the two subsequent years.
Portugal: key facts
Name: Golden Residence Permit Programme
Type of investment:
€280,000-€500,000 minimum real estate investment; or
10 jobs created; or
€1m minimum capital transfer into Portuguese financial institution, or €500,000 minimum for purchasing shares in investment funds
Residence: Family residence offered
Valid for: Two years and can be renewed. After five years can apply for permanent residency and after six, citizenship
Minimum stay: Seven days in the first year then 14 days over the two subsequent years
Duration of application: 90 days for residence permit cards
EU travel: Visa-free travel within Schengen countries
Italy
Italy’s investor visa programme came into force in 2017. The investor applies first for an Italian entry visa then for a residence permit within eight working days of arrival. The permit is valid for two years from entry, renewable for further three-year periods.
The key requirement to be met is an investment or donation to the Italian government, a limited company (including innovative start-ups) or a philanthropic organisation. The original investment or donation must be maintained for the entire period of the permit.
Italy: key facts
Name: Investor Visa Programme
Type of investment:
€2m in government bonds; or
€1m investment in limited companies (including start-ups); or
€500,000 philanthropic donation (areas of culture, research, protection of environment, management of migration)
Residence: Family residence offered
Valid for: Two years and can be renewed. After five years can apply for permanent residency
Minimum stay: Minimum of half the validity period of the residence permit
Duration of application: 30 days from sending complete documentation
EU travel: Visa-free travel within Schengen countries
Further reading:
Tips for foreign investors relocating to the UK
By Luke Micallef-Trigona, solicitor, Irwin Mitchell Private Wealth