By Patricia Casaburi
Securing residency or citizenship by investment (RCBIs) has emerged as a strategic manoeuvre for those seeking to diversify their investment portfolios and safeguard their futures. Central to this trend are the “Golden Visa” programs – formally and more appropriately known as Investment Migration Programs. These programs provide individuals with the chance to gain improved lifestyles, residency rights, tax advantages, and potentially citizenship in specific global destinations in exchange for substantial investments in their new host nations.
For example, the Maltese Citizenship by Investment Programme requires a substantial non-refundable contribution to the National Development and Social Fund or the purchase or rental of property for a minimum of five years. While the investment levels are significant, the rewards include Maltese citizenship and an EU passport, which grants free movement within the Schengen Area, thus enhancing global mobility and living opportunities.
“(…) Citizenship by Investment (CBI) Programs can provide a significant influx of funds directly into national budgets, which in turn supports public services and infrastructure development”
In Portugal, the real estate investment route has been removed from the Non-habitual Residents programme. However, one can still gain access to residency in this European country through other means. Investors can opt to contribute €250,000 to a project that supports the arts or the reconstruction of culturally significant sites. Alternatively, a €500,000 donation to a research project that meets legal qualifications is also viable. These changes reflect Portugal’s focus on promoting cultural and scientific contributions over real estate investment.
The Caribbean islands were among the pioneers of such initiatives in the 80s. Over the years, these Citizenship by Investment (CBI) programmes have undergone several updates to improve due diligence processes and expand investment options. CBI programmes are critical financial lifelines for many small Caribbean nations. For example, since its inception in 2009, Dominica’s programme has raised over 1 billion dollars, contributing a staggering 31% of the nation’s GDP, according to government reports.
“Blaming RCBI programs for the surge in local housing prices is a common narrative, often exploited for political convenience. In 2023, Transparency International Spain released a report citing data from the Ministry of Foreign Affairs. The report revealed that over a decade, 6,200 visas were granted to investors, with approximately 95% acquired through real estate investment. This statistic suggests that only 600 properties were purchased annually nationwide through investment migration channels.”
One relevant feature of CBI programs in the Caribbean is the opportunity to invest in green projects, besides the traditional real estate options, catering to investors interested in sustainable development. Dominica, known as the “Nature Isle,” channels donations into its Economic Diversification Fund, supporting renewable energy, agriculture, and eco-tourism projects. Similarly, St. Kitts and Nevis promote investments in sustainable real estate developments, focusing on eco-friendly construction and sustainable tourism practices. Other islands also provide opportunities to invest in sustainable development projects that aim to preserve and enhance the environment, ultimately improving the quality of life in those regions.
The EU’s Dilemma
However, even if alluring for investors and profitable for destination countries and local communities, these programs will most often receive backlash from media and political institutions. The European Union’s legal actions against CBI programs, specifically Malta’s, and considerations to restrict Schengen movement for nationals from certain Caribbean countries highlight a contentious stance toward the concept of citizenship by investment. In any case, the EU’s position contradicts the sovereignty of its member states, a principle enshrined in European and International Law, particularly concerning nationality laws. According to such norms, the power to determine the conditions under which citizenship is granted should rest solely with individual countries, not be dictated by a supranational entity like the EU.
“The EU’s position contradicts the sovereignty of its member states, a principle enshrined in European and International Law, particularly concerning nationality laws. According to such norms, the power to determine the conditions under which citizenship is granted should rest solely with individual countries, not be dictated by a supranational entity like the EU.”
Blaming RCBI programs for the surge in local housing prices is a common narrative, often exploited for political convenience. In 2023, Transparency International Spain released a report citing data from the Ministry of Foreign Affairs. The report revealed that over a decade, 6,200 visas were granted to investors, with approximately 95% acquired through real estate investment. This statistic suggests that only 600 properties were purchased annually nationwide through investment migration channels. Consequently, the correlation between investment migration in real estate and escalating property prices is intricate and warrants deeper examination.
The global real estate market is experiencing a surge due to multiple factors, including a shortage of property supply, rising inflation, and international conflicts, among others. This trend is driven by more than just a few foreign investors buying properties in specific countries. Despite these considerations, just a month ago the Spanish Prime Minister, Pedro Sanchez, announced plans to phase out Spain’s RBI programme, citing housing market pressures, although data indicates that the programme’s influence on price inflation is minimal at best.
The Spanish RBI program, commonly known as the Spanish Golden Visa, requires a minimum real estate investment of €500,000 to qualify. Still, PM Pedro Sánchez revealed that the real estate investment option will be removed from the program. Despite this change, the programme will continue to welcome investors interested in creating jobs and developing the science and technology sectors. The program offers a path to citizenship after ten years of residency, providing a long-term benefit for substantial investors.
Notwithstanding the criticism, I would like to go as far as to say that the Investment Migration phenomenon represents an evolution in the traditional paradigms of immigration and investment. It embodies a symbiotic relationship between the investor and the host country, wherein much-needed financial infusion fuels economic growth and development while affording the investor and their family with privileges and opportunities. Striking a balance between personal investors’ benefit and host country growth is a challenge that theoretically must not be hard to achieve but has its nuances and difficulties ahead. According to SEF (Portuguese Foreign Nationals and Borders Service), over its decade-long span from 2012 to 2022, Portugal’s Residency by Investment program has generated nearly 7 billion euros in revenue, significantly contributing to the country’s economic growth, which came as a much-needed boost after the 2008 crisis. This has not stopped backlash from different sectors of society, blaming the program for the local property price hike.
Growing Demand and a Constantly Evolving Landscape
In the constantly evolving landscape of investment migration, the programme has reinvented itself and, since 2020, has grown exponentially, mostly with investment funds and cultural donation routes. With a minimum investment of €250,000, investors can help develop new cultural and scientific programs, capitalise companies generating jobs and the most popular and familiar path of diversifying their portfolio into private equity and venture capital funds.
For investors, a significant benefit of the RCBI initiative is its versatility. This program distinguishes itself from traditional immigration routes with its expedited process for obtaining residency and citizenship through strategic investments. Investors have the freedom to choose from diverse options, including real estate acquisitions, business ventures, or capital contributions, allowing them to tailor their investments to meet personal goals and preferences. This flexibility enables investors to navigate the complexities of international migration confidently and precisely, supported by robust legal frameworks and well-defined procedures.
Moreover, the Investment Migration programs are a testament to the enduring appeal of globalization and interconnectedness in the modern era. In an age characterised by transnational flows of capital, talent, and ideas, the Golden Visa emerges as a quintessential manifestation of borderless ambition. It transcends the constraints of nationality and geography, offering a pathway for individuals to expand their global footprint and access untapped markets.
“Critics argue that the European Union’s opposition to CBI programs may not fully consider the economic realities and sovereign rights of these countries. Here, the case of Malta – despite this island state’s economic prowess – comes into play.”
Interesting Times Ahead
RCBI programs also demonstrate the global economy’s resilience and adaptability in the face of unprecedented challenges. Amidst geopolitical uncertainties and economic volatility, investors increasingly turn to alternative avenues for wealth preservation and asset diversification. Beyond being a Plan B for any eventuality, Citizenship by Investment offers stability and security, providing a solid alternative for capital in turbulent times.
In an era defined by uncertainty, CEOs and business leaders can find solace in the tangible benefits afforded by RCBI offerings, from enhanced mobility and access to superior healthcare and education systems to the safeguarding of wealth and assets across international borders. On the other hand, host countries benefit not only from the influx of debt-free capital but also from the enhancement of their development prospects, cultural diversity, new talent and mindset, and increased tax contributions.
Countries with limited economic opportunities, particularly smaller island states in the Mediterranean or the Caribbean, often rely heavily on revenue-generating sectors like tourism. Investment Migration programs, such as Citizenship by Investment (CBI) programmes, can provide a significant influx of funds directly into national budgets, which in turn support public services and infrastructure development.
Critics argue that the European Union’s opposition to CBI programmes may not fully consider the economic realities and sovereign rights of these countries. Here, the case of Malta – despite this island state’s economic prowess – comes into play. The EU’s stance could be viewed as imposing a one-size-fits-all approach to citizenship, which may disadvantage nations that rely on such programs for economic growth. This opposition may overlook the unique challenges and circumstances faced by smaller island states, where alternative avenues for economic development are limited. Without Investment Migration opportunities, they may need to start relying on international financial funds or loans – which aren’t necessarily sustainable.
Patricia Casaburi CEO, Global Citizen Solutions
Patricia Casaburi is a dynamic leader and legal expert with graduate and post-graduate degrees from London’s University of Law, specialising in Commercial Law and immigration procedures. With a background in media studies and journalism, she blends legal and communication skills in her role as Founder and CEO of Global Citizen Solutions.
Under her leadership, Global Citizen Solutions has become a leading consultancy in investment migration, relocation, and visas. Patricia has built a knowledgeable team, emphasising communication and collaboration to meet the diverse needs of clients.