LIO Global citizenship south africa

EU Residence vs Citizenship

Understanding the difference between what residence offers vs what citizenship offers. 

Historically, residency programs have been very popular amongst investors as they offer benefits ranging from travel access, to real estate investments opportunities and tax planning. However, something we have noticed is that residency and citizenship are often words used interchangeably, and they most certainly should not be confused.

In recent months, we have seen a dramatic increase in new companies offering residency and citizenship-by-investment programs, however, very few clarify the differences between the two.

Given the investment criteria and reasons why clients are choosing to acquire a second residency or citizenship through investment, we feel it is vital to understand what each program offers. Let us use Malta as an example:

EU residency Portuguese residency

EU RESIDENCE

What it offers:

The Portuguese Golden Residency Program offers investors and their families a Golden visa and ultimately Portuguese residency. This means they have residency in Portugal and can enjoy the benefits, which include the freedom to live, work or study in Portugal and travel for 90 out of every 180 days in the Schengen zone countries (excluding the UK).

What it does not offer:

Holding residency does not mean one is a citizen of that country and as such does not have the legal right to live anywhere in the EU, only in that country, i.e. Portugal. It also means that the residency is subject to renewal and whilst unlikely, governments can change the rules. For example, physical stay, age and language requirements could change.

EU CITIZENSHIP

What it offers:

Portuguese citizenship means the holder is a full EU citizen and as such can enjoy the protection, security and benefits afforded to European nationals. This includes the freedom to live, work and study anywhere within the EU, including the UK (Brexit may affect this). The holder also has the freedom to travel to over 160 countries with a Portuguese passport. EU citizens are protected by not only Portuguese law, but EU law.

What it does not offer:

Although a powerful passport, Portuguese citizens are required to get visas for some countries, however these are limited. Being a citizen in Portugal may also have tax implications.