Citizenship-by-investment programs (CBIs) are becoming increasingly popular as a way to invest abroad while also having the option of applying for a second citizenship.
But who are these investors today who want to invest in such programs? Are they all just wealthy individuals?
In this article, we discuss the four main types of applicants for CBI programs. We explain why these people apply for citizenship and what makes them unique.
Citizens with a global mindset
Investors applying for citizenship through investment programs tend to fall into two categories: those motivated by money and those motivated by freedom.
Those motivated by money usually apply for citizenship through investment, believing that it will allow them to avoid paying taxes in countries like Australia, Canada, New Zealand, the United Kingdom, and the United States.
Freedom seekers, on the other hand, apply for citizenship through investment to obtain permanent residency status in a country such as Portugal, Malta and Spain. Once they receive their permanent residency status, they can apply for citizenship.
While both groups benefit from the programs, each group tends to have different motivations. Business owners typically seek financial gain, while freedom seekers tend to focus more on gaining legal residency status.
To learn more about the differences between business owners and freedom seekers, read our article on the subject here.
Digital entrepreneurs and nomads
Entrepreneurs are the ones who are looking for new ideas and ways to make money. They often start businesses and create jobs. Entrepreneurship requires risk-taking, innovation and hard work. Citizenship-by-investment programs allow entrepreneurs to acquire citizenship in other parts of the world and while traveling to other destinations. A second passport can often come in handy for these types of investors, especially if they are planning to move abroad permanently.
Digital entrepreneurs are typically young professionals interested in starting businesses abroad. They are typically highly educated and enterprising and usually have a strong desire to travel and explore other cultures. These individuals are likely to invest heavily in their business ventures and plan to return home after making money abroad.
Nomadism is a way of life in which a person travels from place to place with no specific destination or purpose. During and after the pandemic, many nomads choose to travel the world because it gives them the freedom and flexibility to work remotely. They can move where they want and live where they want. In fact, many nomads choose to settle in different countries throughout the year and move from one to another depending on various factors such as weather, availability of jobs, etc.
For example, some choose to stay in Europe in the summer but travel to Asia in the winter. Others may choose to return home for the holidays to visit family and friends.
Retirees are typically retirees looking to escape the hustle and bustle of life at home. They are usually older and have families and commitments at home. Retirees are usually motivated by the prospect of stable income and relaxation. Also, these individuals often choose to stay in the country they invest in, only for part of the year (usually in the winter), and return to family and friends in the summer.
With the population aging faster in the vast majority of countries around the world, it is possible that retirees will become a larger part of the world’s population in the coming years. This means demand for retirement visas and citizenship programs will increase.
Common reasons for applying to CBI programs
Each individual has different motivations, and therefore some types of programs target different types of investors.
For example, someone who wants to become a citizen of another country might be motivated by financial reasons. They might try to save on taxes, pay less interest on loans, or avoid paying capital gains taxes.
On the other hand, someone looking to invest in real estate might be motivated by lifestyle considerations. You may be interested in living abroad, owning property in a foreign country or just having a second home.
It is important to remember that some people may be motivated by financial reasons, others by lifestyle or political reasons.
The most common reasons to apply to these programs relate to:
- Search for financial freedom
- looking for tax benefits
- Diversification of investments abroad
- real estate opportunities
But the main objective of applying for a second passport through investment is that in return for depositing a lump sum. They receive a new citizenship within a few months and enjoy numerous advantages such as visa-free travel, favorable taxation and the opportunity to purchase real estate abroad.
Citizenship through investment is the new way to be atypically motivated for two reasons. In some cases, they want to protect their assets from potential political instability. Second, they want to take advantage of tax benefits.
The final result
Individuals who have enough money to invest in real estate, business opportunities and other investments can now do so worldwide. These people are usually well educated and have high net worth, but this is not mandatory. You can own multiple homes or businesses around the world.
CBI programs are here to stay and could only become more popular in today’s world where people are constantly looking for better opportunities.