August 14, 2019
Encouraging Foreign Direct Investment is a growth strategy in many countries. In some, FDI can account for a significant portion of the GDP, like in Malta or in Cyprus. As such, it is not surprising that countries offer perks for foreign investors – which in some cases include citizenship.
Investment citizenship and FDI
An investment citizenship program is a way for governments to encourage foreign direct investment and attract capital to the country. Some of them offer only one or two investment options, some offer many. These range from the purchase of government bonds through buying local real estate to investment in local business. Accordingly, the risk associated with these investments may be lower (e.g. with government bonds) or higher (e.g. with buying shares in companies).
Assessing risks and perks
Getting citizenship through an FDI project should most importantly be a business decision. You should have a clear vision of what you want to achieve, and what you are willing to invest, or even risk, in order to achieve your goal. You should also keep in mind the time factor. Preparing any major investment takes time, and the processing time for getting a residence permit or a citizenship granted is also at least a couple of months in most countries.
Let’s see some of the best options
Investment citizenship Malta
Maltese citizenship is popular because the process is so straightforward. You can apply together with the whole family (spouse and underage children), and your Maltese passport will give you visa-free access to 182 countries around the world. The investment procedure requires 3 transactions: an EUR 150,000 investment in government approved projects; a non-refundable contribution of EUR 650,000 to the National Development Fund; and a real estate purchase of EUR 350,000.
Malta also offers residency, and as of 2019 summer, a financed option is also available.
Cyprus
Cyprus offers both residency and citizenship to investors. The main difference is the size of foreign direct investment, part of which must be spent on residential property, which you have to maintain as your accommodation. In the residency option, the value of the real estate must be at least EUR 300,000, while you also have to make a bank deposit of EUR 30,000. In the citizenship option, the value of the real estate must be at least EUR 500,000, while you have to invest an additional EUR 1,500,000 in local development projects. The typical application process length is 2 months for residency and 3 months for citizenship.
Hungary
You can get Hungarian residency if you purchase real estate worth at least EUR 200,000 (typically two apartments) for the purpose of renting the property, and then set up a company to manage the affairs related to the rental of your real estate. The program fee is 10% of the purchase price, while you have to expect an additional 4% as property tax. Residency application takes typically 2-3 months after company setup and property purchase.