Natalia Debrot, Henley & Partners

1. What is the difference between residency and citizenship?

Thank you for this question. It is very important to distinguish between these two statuses and they can be outlined as follows:

Citizenship (passport):

• Provides the right to vote
• Offers the possibility to pass citizenship down to future generations
• Allows for international travel
• Provides state protection

Residency (residence permit):

• Provides the right to live, work, travel and study in a country
• Usually comes with specific conditions or requirements
• May offer some travel rights
• Can be withdrawn
• Is likely to affect tax status

In short, the residence permit gives a maximum of possibilities limited to the country of issuance, while the passport offers more opportunities worldwide and does not automatically lead to the tax consequences (except in the case of passports issued by the USA and Eritrea).

2. What is currently the most popular destination among clients from Russia or the CIS region in terms of residency and/or citizenship programs?

Recently we have experienced increased interest in the Greece Golden Visa Program due to its simplicity, efficiency and straight-forward process. An applicant can obtain a five-year residence permit in three to four months, with a minimum investment amount of EUR 250,000 in real estate. 
Along with Greece, Spain and Italy are also amongst the residency programs currently attracting the most interest. Spain is traditionally a beloved destination for CIS clients  and many of them have holiday houses there. In light of the restrictions that have been imposed as a result of the pandemic, these clients would now like to use their property in Spain as a means to acquire a Golden Visa/residence permit and we have been providing them with the support they need to do so.
Recently, Italy also made changes to the requirements for its Italy Residence-by-Investment Program, as a result of which there is now no obligation to reside in Italy. Additionally, Italy could be a very interesting option for clients who are qualified to deal with start-ups: in order to fulfill the program’s criteria, an applicant would have to make an investment of at least EUR 250,000 in a start-up company. 

3. How long is the process to obtain a passport or residence-by-investment?

In terms of time frames, Greece is known to have the quickest process to obtain a residence permit (two months), while the Caribbean and Montenegro have the fastest processes to obtain a passport (six months).

However, the speed of the process very much depends on the client: think of it as a tennis match, where the aim is to keep the ball in the air. We provide support in all aspects of preparing documents in order to speed up paperwork. For example, we help with the certification of a document in a foreign language, with apostilization and so on.

4. What is the most important argument for applying for a residence permit or another passport? Is it the education of children, inheritance laws, climate, safety, ecology, growing business internationally…?

There are always several reasons behind the decision to apply for a residence permit or second passport and, in most cases, it often involves very personal motives. However, the common trend could be expressed through the concept of additional value, whether that’s additional value to one’s personal or family life, freedom of movement, being able to diversify one’s business opportunities or tax planning.

As a direct result of the current pandemic many individuals were faced with a situation of forced lockdown, which significantly limited their usual lifestyle: having additional documents therefore presented these individuals with the option to spend summer in a personal holiday house in countries like Greece, Spain, Italy or Portugal.

5. What is the reason for choosing one of the Caribbean or European options?

When we consider citizenship programs, the Caribbean programs – such as those of St. Kitts and Nevis or St. Lucia – typically rank top among CIS clients. The reason for this is usually the same as in the case of  residency programs: these citizenship programs allow for freedom of movement, have a comparatively low-priced “entrance ticket” when it comes to investment requirements and there is no obligation to reside in those jurisdictions.

When it comes to European options, I would maybe highlight Austria. Besides offering business opportunities, it provides serious investors with the possibility to obtain citizenship of one of the most stable countries in Europe. It is, however, worth mentioning that this is quite an expensive and time-consuming option: it requires a minimum investment of at least EUR 3,000,000 and at least two years of work have to be dedicated to the investment project. In Austria, the investment is the goal and citizenship is a bonus. However, the positive results are so conclusive that this option is becoming more and more popular among ultra-high-net-worth individuals (UHNWI).

6. If certain clients are not sure where they would like to move to, how do you help them compare destinations and make their choice?

 

We have to analyze both the personal and business situation of the client; many circumstances need to be taken into consideration. The motives for taking such a step also have to be very clear: one might want to be able to travel the world hassle-free in order to have a secure option for one’s family in times of crisis or the decision may be driven by financial planning.

When there is any doubt as to which option would be the most suitable for a client, at Henley & Partners we usually ask a client to share the following information with us:

1. The main reason the client would like alternative residence and/or citizenship
2. The number of family members to be included in the application and their ages
3. The funds the client wishes to accord to this venture
4. The approximate timeframe desired to obtain alternative residence or citizenship

Based on the client’s answers, we are then able to determine which program best suits their needs and we can move forward from there. As a next step we can discuss the respective options in detail, either in person or over the telephone – whichever method is most convenient for the client.

7. There is an old saying: change what you can change and accept what you have to accept, and the wisdom – not to mix the both. What is in your opinion one should not change or expect to have changed by changing the country. And what can be a driver to move from one country?

Before I answer this question, we need to agree on the terminology. Based on our internal statistics, approximately 80% of our clients never leave their home countries; they simply obtain additional documents to either hedge against certain risks or to secure additional opportunities abroad for their family.

Only around 20% of all cases are real immigration cases. In this last category it is very difficult to define the main driver of migration as there can be such a wide range of reasons: it might be pension planning, but it might also stem from a childhood dream to live in a certain country.

The main driver to obtain a second passport or residency tends to be to guarantee a so-called Plan B.

8. Could you please mention at least one country that has an affordable, or maybe even competitively priced, program with attractive conditions?

I would probably mention the Montenegro Citizenship-by-Investment Program, which will terminate at the end of this year, earlier than originally planned. It offers a lot of opportunities to foreign investors and has great potential in terms of taxes, the country’s geographical situation, as well as the freedom of movement it grants within the Schengen Area. Additionally, Montenegrin citizenship can be passed down to future generations.

To qualify for citizenship, the government of Montenegro requires the applicant to either:

• Make a contribution of EUR 100,000 to a specially-created government fund and an additional investment of EUR 450,000 in government-approved real estate located in one of the country’s developed areas (the coastal region or the capital Podgorica)

or

• Make a contribution of EUR 100,000 to a specially-created government fund and an additional investment of EUR 250,000 in government-approved real estate located in one of the developing areas of the country (the northern or central regions)