What’s the best way to invest your way to a second passport?

*This content is brought to you by Sable International. With immigration and investment experts in Portugal, the UK and Australia as well as a support office in South Africa, they’re perfectly positioned to help you invest abroad and gain residency and a possibly a second citizenship.

By Gary Kockott*

Gary Kockett, MD of Sable International SA
Gary Kockott

Money can’t buy you love, but when invested in the right way, it can potentially buy you a second passport. There are dozens of countries that offer residency, and the possibility of citizenship, in exchange for an investment in a business or real estate. These programmes range from border-line questionable to completely above-board and financially sound. Today we take a closer look at three from the latter category.

Understanding what residency and citizenship mean

You may already know this, but residency is not citizenship. In general, residency refers to a person’s visa status in a country where they do not hold citizenship. It is usually divided into temporary and permanent residency.

If a person has residency in a country, but they are not a citizen, it means they may legally reside there for a set period of time. Eventually, after a period of qualifying residence, one can often apply for citizenship, a second passport.

Residency by investment programmes allow investors (and their families) the opportunity to live, work, study or run a business in a country they invest in. After a few years, depending on the programme, these programmes allow the investor to apply for residency and often full citizenship.

I’ve hand-picked three of the best and brightest residency by investment programmes the developed world has to offer. After having a look at this trio I’m sure you’ll have a pretty good idea of which programme suits your plans best.

The UK Tier 1 (Entrepreneur) visa

The UK has long been an attractor of long-term foreign direct investment. In the current climate, the UK is keener than ever to attract new investors. The Tier 1 (Entrepreneur) visa allows you to start or buy into a business in the UK, and in turn earn UK residency rights for you and your family and ultimately citizenship if all requirements are met.

This is an excellent way to not only earn residency rights, but if chosen wisely, the business you start up or join could provide you with an income large enough to sustain yourself and your family for the long-term.

The investment

You must have access to not less than £200,000 in investment funds and can prove that the money is free to spend (disposable) on business in the UK and either:

  1. Your own
  2. Made available to you by a third party (e.g. spouse or partner)
  3. Held in one or more regulated financial institutions
Main advantages
  • You can move/expand your South African business to the UK
  • With the right advice, this can be an extremely profitable investment
  • You can split the investment amount with a partner, who can also claim a Tier 1 visa
  • UK residency for you and your family that can lead to British citizenship for you and your family if the requirements are met

If your application is successful, you and your dependants will be granted your Tier 1 (Entrepreneur) visas. These will allow you to live and work in the UK for three years and four months. This visa can then be extended for another two years if you satisfy certain criteria.

Once you have lived in the UK for five years on your visa, you will be eligible for indefinite leave to remain (ILR). After holding ILR for 12 months, you can apply to be naturalised as a British citizen. Once you are a citizen you may apply for your British passport.

Australia’s Business Innovations and Investment visa

Australia’s Business Innovation and Investment (Provisional) visa (subclass 188) allows you to own and manage a business in Australia (the Business Innovation stream) or conduct business and investment activity in Australia (the Investor stream). The visa is valid for four years and three months, after which it can be extended. You can eventually apply for a Business Innovation and Investment (Permanent) visa (subclass 888) which is a permanent residency visa.

The investment
  • You will need to invest at least AUD1.5 million if you’re applying for the Investor stream
  • You will need to have experience in owning and operating a business for the Business Innovation stream
  • You will need to submit an Expression of Interest (EOI) to the Australian government, and they will then invite you to apply for this visa if they feel you meet the requirements
The main benefits
  • You have the option to establish a new (or develop an existing) business
  • Travel in and out of Australia freely for the duration of your visa
  • Bring your family with you
  • Apply for Australian permanent residency for you and your family
  • Eventually gain Australian citizenship for you and your family

This visa is a great way for high-net-worth individuals to break their business into the Australian market, or to gain residency through an investment into Australia. What’s more, the visa eventually leads to Australian citizenship for yourself and your family.

Portugal’s Golden visa

The Golden Residence Permit Programme was launched by the Portuguese government in 2012 with the aim of increasing foreign direct investment into the country by incentivising EU investors with the awarding of what is often referred to as the Golden visa.

The requirements of this programme are straightforward and flexible, and all the legal obligations are transparent and investor-friendly. The two most attractive aspects of this programme are that you don’t need to spend much time in Portugal, and you can easily include your family on your Golden visa depending on your family structure assessment. If you maintain your residency for long enough, you will be eligible to apply for full Portuguese citizenship for you and your family.

The investment

You can invest by:

  1. Making a capital investment with the minimum value of €1 million
  2. Purchasing real estate with a minimum value of €500,000
  3. Establishing a Portuguese company that employs at least 10 people
  4. Purchasing and refurbishing real estate in designated improvement areas with a minimum value of €350,000

The real estate options are by far the most popular. You have the option to rent out your property on a long-term or short-term basis, and there is no requirement for you to live in that property. This makes it a fantastic way to combine your investment and residency goals. It’s a solid Rand-hedge offshore asset.

Main advantages
  • Gain EU residency for you and your family
  • Own property overseas
  • Secure a “plan B” for you and your family in terms of security, education and lifestyle
  • The Golden visa allows you to travel freely throughout the Schengen zone
  • You can live and work in Portugal
  • You don’t have to give up any other residency’s or citizenships you hold

The Golden visa requires you to spend an average of only seven days in Portugal each year for the first five years in order for your visa to remain valid. This means that you need not leave South Africa, and only need to spend a week or two per year in sunny Portugal.

After five years, you and your family members will be able to apply for permanent residence in Portugal. Once you’ve held permanent residence for a year, you and your family can apply for Portuguese citizenship. Once you hold citizenship you can apply for a Portuguese passport, the fourth most powerful passport in the world.

So, which one wins?

The first question you will need to ask yourself is: Which country do I want to gain residency in? The second question you might want to ask yourself is: Which investment (and eventual passport) is best for me and my particular circumstances? Whether you prioritise obtaining a second passport or want to relocate to another country will play a large role in your decision.

If you’re looking to simply gain dual nationality, Portugal’s Golden Visa programme would make more sense for you. If you want to relocate to the UK and Australian options discussed above might be a better option for you.

Whatever you do, you don’t want to do this alone. These programmes are exciting, complicated (and costly) endeavours, and rushing headlong into something is not the advised.

When investing offshore or relocating overseas, you need to get local advice. Not just in the country you intend on moving to or investing in, but also in the country you currently reside. Finding a partner who checks all these boxes is the best way to have your current position assessed so that you can figure out exactly which programme would best suit you and your family’s needs.

There are some great opportunities out there. With the right advice, you could make a life-changing decision for you and your family’s future.

  • Gary Kockott is the Managing Director of Sable International.
Make Better Decisions. Start your Biznews Premium FREE TRIAL today.