What is Economic Citizenship?
Economic citizenship refers to when an individual completes the legal process to acquire citizenship (called naturalization) or permanent residency in a second country on account of the individual’s financial investment into that country’s economy.
Economic citizenship can be very beneficial as it results in the individual’s ability to obtain a second passport which typically opens the door to easier international travel. For example, if an individual obtains United States citizenship, the individual immediately becomes eligible to travel visa-free to all of the countries with which the U.S. maintains a travel treaty, such as Germany, South Korea, Ireland, Italy, the United Kingdom, Spain, France, and Australia.
Moreover, there are substantial financial benefits to economic citizenship as well. For instance, some countries only allow citizens to have access to all of the country’s investment markets. Additionally, many nations offer significant tax breaks to its citizens who were previously foreign investors, including but not limited to exemption from income tax, property tax, gift tax, and inheritance tax.
Finally, all economic citizenship programs allow the foreign investor to bring his or her spouse and minor children to the country as the investor’s family dependents.
How Can I Obtain Economic Citizenship?
It is important to emphasize that only a small number of countries allow foreign nationals to immediately become citizens after the national makes the investment into the country’s economy. In general, countries require that foreign nationals first become permanent residents, then live in the country as permanent residents for a specific period of time, after which the national can then apply for citizenship.
Currently, the following countries allow foreign nationals to immediately qualify for citizenship after making the required investment: Montenegro, St. Kitts and Nevis, Grenada, Dominica, and Antigua and Barbuda.
Conversely, some of the popular countries where foreign nationals seek economic citizenship that require a period of permanent residence before becoming a citizen include the United States, the United Kingdom, Australia, Panama, and Belize.
Even though every country’s economic citizenship program is slightly different, the more common conditions that nearly all countries require are as follows:
1. There is a minimum investment amount that the foreign national must contribute:
While the minimum amount varies from country to country, starting from as low as $100,000USD (for Dominica’s program) or as high as $1,000,000USD (for one of the United States’ programs), each nation requires the foreign national to have already invested the amount – or have promised to invest the amount – before the citizenship application will be approved.
2. Most countries require that the foreign national prove that the investment funds were derived from a lawful source:
The reason for this requirement is because countries do not want to encourage wealthy individuals who may have made their money from terrorist activities such as theft or money-laundering, to become citizens of their nations. In order to prove the lawful source of funds, the foreign national usually provides the country with copies of tax returns, employment paystubs, bank statements, mortgages, etc.
3. The foreign investor must usually have previous business or entrepreneurial experience: many countries make past documented business or entrepreneurial success a prerequisite to their economic citizenship programs. This success usually takes the form of past businesses that the foreign investor established and operated, or past investments that have been profitable over the course of numerous years.
As stated, these requirements represent only a few of the conditions for economic citizenship programs. Since there are many different options a foreign national could pursue, and each country’s program has its own benefits and disadvantages, interested investors are encouraged to speak with a knowledgeable attorney who can explain and advise on these numerous options.