Those of us in the industry don’t consider foreign residency programs to be direct competitors of second passport offers. We see them as very different tools for very different needs. This article on foreign residency vs second passports will explain the differences and help you select the best program for your family.
When I write about a second passport program I’m referring to an offer by a country that allows you to buy a passport. You give them cash and they give you citizenship and a passport… that’s it. No physical presence requirement and other hoops to jump through. If you have a clean history (no criminal record or other issues), you can buy a second passport from any number of countries and receive your travel document in about 90 days.
Foreign residency is a visa to live (and sometimes work) in a particular country. It might lead to a passport after five years or so, but citizenship is not usually guaranteed. Residency + living in a country gives you the right to apply for citizenship, but acceptance is not guaranteed.
You might be surprised to know that the United States is one of the few countries that offers a guaranteed path to citizenship. Under the EB-5 investor visa program, wealthy foreigners can invest $500,000 or $1 million in approved projects and be guaranteed a US passport in 5 years.
With that said, about 90% of the people who contact us about buying a second passport decide to go with foreign residency residency and work that into citizenship over time. If the goal is a second passport, why start with foreign residency? That’s easy: MONEY.
Most passport for purchase programs start at around $120,000 for a single applicant. Mid-range offerings, like St. Kitts (which I don’t recommend), will cost you $250,000 plus all kinds of fees. The best second passport program, Malta, requires an investment of $1.2 million and legal fees will push this to about $1.3 million.
The best low cost second passport program is Dominica. It’s a simple cash for citizenship offer and their passport gets you into 119 countries visa free, including the EU. For more on Dominica, see: The Best Value in the Caribbean.
If you prefer to make an investment rather than pay cash, consider St. Lucia. Their bond program is the best deal going. Invest $500,000 to $550,000 in government bonds for 5 years.
St. Lucia is a slightly better passport than Dominica. It gets you into 127 countries visa free. For more on St. Lucia, see: Changes to the St. Lucia Second Passport Program in 2017.
You might also like to read: How to Value a Second Passport.
If you don’t have that kind of cash, don’t give up! You can earn your second passport by living in a country for a few years, becoming a part of the community, and applying through their foreign residency program.
For example, invest $20,000 in Panama, apply for foreign residency through their “friendly nations reforestation visa program,” and you’ll be eligible for citizenship after 5 years.
And Panama doesn’t have a physical presence requirement to maintain your foreign residency. You can spend as much or as little time in the country as you like. Though, you will need to live in Panama for a time to qualify for citizenship.
Another option along these same lines is Nicaragua. Invest $35,000 in their version of the reforestation program and get residency. Also like Panama, you can apply for a second passport after 5 years.
There are several reasons Nicaragua is a better deal that the lower cost Panama visa:
- You get a ¼ acre in Panama for $20,000 and just under 2.5 acres ( ½ hectare) for $35,000 in Nicaragua.
- Nicaragua has a more defined path to citizenship. I wouldn’t say it’s guaranteed, but it’s much more likely than Panama.
- Many of our clients prefer to live in Nicaragua over Panama… but that’s personal preference and a lifestyle choice.
- The Panama program is only open to those from “friendly” nations while Nicaragua is open to anyone. All you need is money and a clean history.
If you’re looking to put a foreign residency in your back pocket as an exit plan, but don’t want to live in the country, go with Panama because Nicaragua has a physical presence requirement. You must spend at least 180 days in the country to maintain your visa.
The bottom line is that there are two ways to get a second passport. You can buy one from Dominica, St. Lucia, Malta, and others or you can earn one through a foreign residency program. You can pay with cash or with time and effort.
I hope you’ve found this article on the differences between foreign residency and second passports to be helpful. For more information, please contact me at firstname.lastname@example.org or call us at (619) 550-2743 for a free and confidential consultation.