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Does a Golden Visa lead to Citizenship?

by Oliver Said, on Sep 2, 2019 9:30:00 AM

If there is one question that will invariably arise when people start looking for European temporary residence permits (Golden Visas) or Permanent Residency Programs, is

"Will I eventually be granted Citizenship?"

In theory, the answer is yes; however, the reality is far more complicated than you might think.
Now, let us be frank and call a spade a spade.

Most people are under the illusion that by attaining a "Golden Visa" they are magically entitled to receive Citizenship a few years later.

Many are led to believe that through investing in some property, and by visiting the country a few weeks a year, then by default, their application for Citizenship would be automatically accepted. Few or no further questions asked!

Unfortunately, this is not the case, as people are starting to find out at their own expense.

How to attain Permanent Residency or Citizenship?

Many European countries have provisions in their legislation that allow for a person to apply for permanent residency, and then, after several years, Citizenship. While the conditions vary from country to country, these usually include several strong links such as;

  • Being a fit and proper person;
  • Being able to sustain yourself and your family;
  • Being resident in the country for a number of years. In the EU, the minimum period of residence required for naturalisation varies from  3 to 10 years (see Figure 1) but as an average it is close to 7 years.

figure 1

The last point is critical since it denotes that person would likely become a tax-resident in the country.

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Someone who hasn't physically resided in the country for several years is unlikely to be eligible to apply for Permanent Residency, let alone Citizenship.

So let us assume that one meets the required conditions and now has the right to apply.

Here is the catch!

The right to apply does NOT guarantee the obligation of the state to accept the application. It usually takes five years to become either a permanent resident or a long-term resident. Typically it takes a decade or more of physical presence in an established country to become naturalised, and even then Citizenship is not guaranteed.

Many people are eventually disillusioned when they find out their application for citizenship has been rejected.

Why countries promote Citizenship by Investment Programs?

In one word - MONEY!

Let's call it how it is. Malta and Cyprus are the only two countries that promote "clear-path" Citizenship by investment programs within the European Union. Both programs generate significant revenue streams to their respective governments.

The Malta Citizenship by Investment Program

The Maltese Citizenship by Investment program requires a monetary outlay of approximately EUR 1.1 - EUR 1.3 million. From this outlay EUR 800,000 - EUR 900,000 are sunk costs.

The Cyprus Citizenship by Investment Program

The Cyprus Citizenship by Investment program requires a monetary outlay of approximately EUR 2.5 million. From this outlay EUR 600,000 - EUR 700,000 are sunk costs.

Both the Maltese Citizenship by Investment and Cyprus Citizenship by Investment programs require extensive due diligence, investments and government contributions, some taxes, professional fees, real estate, and some ancillary expenses such as international medical insurance.

The advantage of going down this route is one - Time!

If you pass the due diligence process, within approximately a year, you can expect to receive your Citizenship.

So when you think about it, most European countries are aware that people are willing to pay millions of euros to acquire Citizenship. So, why give it away for free, or simply because one invested some money in real estate.

By contrast, people who have lived in a country for an extended period would have generated genuine links. They might be operating a business or be employed. Either way, they are contributing to the economic output of the country and paying taxes. Therefore, these people are in a better position to receive naturalised Citizenship.

How to attain Citizenship of an EU country with less investment?

So what other options exist to benefit from the right of European Citizenship, without forking over a million euro?

Ironically the answer lies in an existing piece of legislation, namely an EU Council Directive 2003/109/E, also known as The Long-Term Residents Directive.

The cost? Zero!

If you are a permanent resident in one of the applicable countries the only costs are some legal fees and a culture test.

The long term residents directive was primarily drafted for the adoption of measures relating to asylum, immigration, and safeguarding the rights of third-country nationals (TCNs).

The benefits of this legislation are significant. If that person fulfils a number of criteria, it grants a person who has lived continuously in any one of the applicable European countries rights typically attributable to nationals. These include:
  • The freedom of employment or self-employment;
  • Education; and
  • Access to social services.

Final Words

So, as we have explained above, attaining Citizenship is only possible through forging genuine long-term links or through investing significant amounts of money.

The notion that one can jump from being a temporary resident under a Golden Visa to becoming a Citizen and skipping the stages of long-term residency and permanent residency is ultimately a marketing illusion.