You may have heard of CBI (Citizenship by Investment), in which individuals acquire the status of belonging to another country by investing in its economy. These schemes, which have been going on for decades, have drawn a lot of attention for attracting foreign direct investment (FDI) to boost the infrastructure and economic performance of several countries.
On that point, here we’ll focus on a specific CBI route that has proved popular for investors around the globe: real estate.
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What is real estate CBI?
While CBI normally takes the form of direct, local investments, or a flat fee in exchange for citizenship, temporary or permanent residence, some countries offer an alternative transaction: through real estate. Here, a government promotes the opportunities for new investors to buy property or put money into commercial projects, like a hotel, resort, spa, villa or apartment block.
Otherwise known as a ‘golden visa’, citizenship and residency rights can be achieved through private real estate firms offering properties for purchase by investors. In some cases, those who purchase a house, apartment or villa in the country of choice are required to reside there for some time before they are eligible for citizenship.
How does citizenship by real estate investment work?
Some nations explicitly offer this incentive to private investors to fund a real estate development, usually providing that it is approved by the government. Take the Commonwealth of Dominica’s CBIU unit, for example. Dominica only authorises real estate investments in exchange for citizenship if the funds go toward sustainable developments — such as investors investing in property that is then used for eco-tourism. In this case, you don’t actually need to move to the country, but for other countries, you may face other stipulations instead. For example, Immigration Insider notes that the minimum investment amount for Turkish CBI real estate was recently hiked by over 60%, from $250,000 to $400,000.
Generally speaking, investment terms are largely similar across many nations offering CBI: individuals choose between a refundable purchase of a real estate property or a non-refundable contribution to the government, typically to a foreign investment fund. There are also the requisite non-refundable application fees.
The application process
The steps towards gaining citizenship via CBI are largely uniform — would-be investors choose an authorised agent to handle the process delegated by a nation’s CBI unit. The finer detail may vary depending on the country.
Authorised agents support investors with essential documentation and dealing with all correspondence with the government’s CBI unit. A reputable program will require all applicants to undergo due diligence and know your client (KYC) checks.
Once they have passed the vetting process, applicants then make the designated investment. The individual then receives a government certificate that grants citizenship, from the government, and they can hence apply to the passport office for their passport.
Why pursue real estate CBI?
The OECD lists a number of reasons someone may decide to obtain citizenship in general. These include: “the wish to start a new business in the jurisdiction, greater mobility thanks to visa-free travel, better education and job opportunities for children, or the right to live in a country with political stability”.
However, beyond gaining a second passport and the ability to make an exotic or otherwise desirable location your home away from home, Nomad Capitalist reminds us of the other perks of real estate CBI investment specifically. “Investing in international real estate is not only a good strategy for taxation and your portfolio”, he writes, “your investment will also help you enhance your wealth by taking part in the growth of another country”. By placing your capital in a crucial part of a nation’s infrastructure — particularly as part of sustainable development — you can help promote prosperity and security for citizens of a less privileged nation.