Citizenship By Investment

What Exactly Is Citizenship By Investment?

Although it first saw the light of day in the Caribbean way back in 1984, Citizenship by Investment (or CBI) took a while to establish itself, but it now has grown into a $2 billion-a-year industry, and it is only going to get bigger. But what exactly is citizenship by investment, and how does it differ from other forms of residency?

In recent years, within the corporate and investment worlds, “Citizenship by Investment” or CBI for short has become something of a buzz-phrase, often mentioned by wealthy individuals hailing from China and the Middle East who are looking to base themselves in Europe, North America or the Caribbean. There seems to be a new CBI or Investor Residence program on the market every few months, and the market has become so large and complex, there is now also a handful of highly credible websites like Arton Capital,, Nomad Capitalist and Henley and Partners (plus a ton of less credible sites) who act as advisers and in some cases brokers, and help investors find the program best suited for them, and then guide them through the entire process, from application to receipt of passport, in return for a commission.

But what exactly is citizenship by investment, what are its benefits, and how does it differ from permanent residency?

Citizenship By Investment

Citizenship by investment literally means what it says; it is the gaining of a country’s citizenship by virtue of a specific financial (and to a degree residential) investment. The practice began when St. Kitts and Nevis introduced the very first CBI program back in 1984. It took a while for the process to a) gain credibility and b) for other countries to follow suite, but CBI is now available in both the Caribbean and the EU. As for St. Kitts and Nevis, their program is the oldest in the world, and is now the island’s no.1 source of income.

From the investor’s perspective, the sole purpose of entering into a country’s CBI program is the receipt of that country’s citizenship as well as its passport. If a country advertises a CBI program, but doesn’t actually deliver its citizenship and passport and instead offers a permanent residence visa, they are being misleading, as while a country’s permanent residence visa can be extremely useful, it is not nearly as powerful as a country’s citizenship and passport.

Which Countries Offer CBI Programs?

Some of the best CBI brokerage websites are guilty of advertising a country as having a CBI program when what they are actually offering is a permanent residence visa program that may well lead to citizenship eventually.

For example, Hungary is often advertised as having a citizenship by investment program, but what it actually has is an Investor Residency Program which requires an investor to purchase €300,000 worth of Government Bonds in return for five years of permanent Hungarian residency for the applicant and their family. The Hungarian residency permit allows its holder visa-free access to Europe’s Schengen Zone, but they are not allowed to live or work there.

After five years, the investor can choose to have their government bonds returned, or they can then apply for full Hungarian citizenship. While five years of living, working and paying taxes in Hungary, plus maintaining a €300,000 bond investment will certainly stand an applicant in good stead of receiving Hungarian citizenship, it is still not 100% guaranteed.

The only countries that offer citizenship by investment in its purest form are Antigua and Barbuda, Austria, Cyprus, Dominica, Grenada, Malta, St. Kitts and Nevis and Saint Lucia.

What Is The Difference Between CBI, Residency And Permanent Residency?

Many more countries have investor residency programs than have CBI programs, and in more areas of the world. These programs can be residency or permanent residency.

  • Residency – A residency visa permits the investor to live and work in the country in question, but only for a stipulated period of time, normally 4-5 years, after which they can apply for a renewal of their residency or apply instead for permanent residency
  • Permanent Residency – permanent residency gives the investor virtually the same rights as citizens of the country in question, and without time limitation, but the investor remains a citizen only of their original country

Countries who offer an investor residency program include; Australia, Belgium, Bulgaria, Germany, Malaysia, Singapore, the UK and the USA.

Benefits Of CBI Compared To Permanent Residency

Within the country in question, the benefits of permanent residency and citizenship are virtually identical, the main difference being that the permanent resident retains the citizenship of their original country. Permanent residency works well if the investor is living in a country that they wish to remain in for a considerable amount of time, a country that they are prepared to build a future in, for themselves and their family.

In that respect, permanent residency can work well in a country with a strong economy that offers lots of job opportunities, plus high standards of living, health and education, like the USA, Australia, Germany, or even smaller nations like Malaysia and Singapore.

However, if an investor’s main motive is to improve on their freedom of movement and their ability to live and work without hindrance in a multitude of countries, acquiring the citizenship and passport of a country is a far superior option than acquiring its permanent residency.

Passport Power

Someone who holds permanent residency to a country will still need to use their original passport when they travel abroad, and if they are citizens of China, India or the majority of African and Middle Eastern nations, their passport will be severely limited in the amount of countries it has visa-free access to.

China and India maybe the two most populous nations on earth and could one day be the two most dominant economies also, but right now they have particularly weak passports, with the Chinese passport having access to only 50 countries without the need of a visa, and the Indian passport good for only 52. By comparison, the majority of EU passports deliver the holder visa-free access to 160+ countries, and the most powerful like those of Germany, Sweden and the UK have access to more than 170. In addition, an EU citizen is free to live and work in any other European Union country indefinitely.


The setup is similar in the Caribbean, where the majority of countries are members of CARICOM (the Caribbean Community) which is the West Indian equivalent of the European Union. A citizen of a country like St. Kitts and Nevis can live and work without restriction in a neighboring Caribbean country like Barbados, Jamaica or the Cayman Islands without restriction on time.

While not quite as powerful as those from the EU, the passports of Caribbean countries are far superior to the bulk of Asian, Eastern European, African and Middle Eastern passports, and have visa-free access to in excess of 120 countries, with the St. Kitts and Nevis passport providing visa-free access to 132 countries.

Summing up, there are many instances where the Investor Residency program of one country is virtually the same cost as the Citizenship by Investment program of another. If you are planning to remain in a country that is only offering an investor residency program, make sure it’s a country that you will be content to remain in for many years, satisfies your dreams and ambitions, covers you and your family’s needs in terms of work, education, health care and living standards.

However, if you are a business person who needs to be able to travel to many countries and would prefer to do so without needing to apply for visas and would also like to be able to live and work in various locations, then citizenship by investment to an EU country is by far the best option. For example, Maltese citizenship means you can remain in Malta if you so wish, but you can also literally live and work in any EU country including Germany, France, Italy or Spain for the rest of your life with exactly the same rights as the locals.

A Maltese passport will give you visa-free access to 168 countries, including virtually all of the Americas (Canada, the USA, the Caribbean plus Central and South America) Western Europe in its entirety, parts of Africa and Asia and all of Australasia. Not surprisingly, the Maltese CBI program is extremely popular, although only a tiny percentage of investors who purchase it choose to make Malta their main base.