Top Residence by Investment Options in Europe for Domicile Diversification

Editorial by: Scott Moore, Managing Director and Head of the Indonesia and Philippines offices at Henley & Partners

In recent times, volatility has become a global constant. The disruptors of Covid-19 and climate change have become key drivers of interest in investment migration but in 2022 the world was introduced to new heights of uncertainty when Russia–Ukraine tensions escalated into full scale war. The lack of certainty that ensued has led many to once again reassess their circumstances and has enhanced the appeal of residence and citizenship by investment programs for wealthy individuals as a hedge against risk and to safeguard their future due to the optionality they provide.

Relentless disruptions have led to a sense of unease regarding what the foreseeable future will look like in terms of both wealth and lifestyle and have resulted in a significant shift in how alternative residence is perceived by high-net-worth investors. Across the world, wealthy families are opting for residence by investment opportunities — referred to by some as golden visas — to overcome the restrictions and limitations of their countries of origin as they provide reliable strategies to secure access to world-class infrastructure, healthcare, business, and education options and create international optionality while providing stability, security, and lasting legacies.

Domicile diversification through residence by investment

In the current context it is vital to design a portfolio that spreads jurisdictional risk in terms of personal access rights as well as investment. Each residence program offers a range of attractive investment options — from prime real estate to business start-ups — which are designed to cater to each family’s unique requirements.

Diversifying your wealth and lifestyle portfolios by investing in a selection of complementary residence options in a range of regions enhances your family’s global mobility and is the best possible insurance policy against ongoing economic and political upheaval. It is also an inter-generational legacy planning tool to prepare and futureproof your family, now and for generations to come, by providing them with access to multiple countries and regions across the globe. Securing residence or citizenship rights in a country today automatically entitles your children and other dependents (depending on the program you choose) to a passport or residence permit for that country.

Henley & Partners can assist you with applying for residence programs in some of the world’s leading nations in terms of commercial business opportunities and quality of life — and most include the possibility of acquiring citizenship after a period of residence. More than ever before, wealthy individuals are pursuing residence by investment options as the most effective way to access previously unimagined opportunities.

The Global Residence Program Index – a trusted ranking

The annual Henley & Partners Investment Migration Programs 2022 report was launched in March and provides a comprehensive, systematic analysis and benchmarking of the world’s most important investment migration programs. It features two indexes: the Global Residence Program Index and the Global Citizenship Program Index. The report was designed with high-net-worth families in mind and provides clear, current, and reliable advice. Updated annually by leading academic researchers, country risk specialists, economists, independent expert immigration and citizenship lawyers, and other industry specialists, the two indexes reflect the relative worth of reputable residence and citizenship programs around the world, respectively.

The 2022 Global Residence Program Index ranks 25 residence programs according to factors of significance to prospective applicants and their families, including the destination’s reputation, quality of life, tax benefits, and visa-free or visa-on-arrival access, among others. In this article we take a closer look at the leading four residence by investment programs in 2022 that occupy the first three rankings, namely those hosted by Portugal in 1st place, Austria and Italy, which jointly hold the 2nd place, and Switzerland in 3rd position.

Portugal – A haven for investors and their families

As a full member of the EU, Portugal boasts an excellent reputation and is considered one of the world’s most globalized and peaceful nations, with a good quality of life and a very high Human Development Index ranking.

Ranked 1st out of 25 programs in the 2022 Global Residence Program Index, the Portugal Golden Residence Permit Program is a five-year residence by investment program for non-EU nationals. Additional benefits of a Portuguese residence permit include an attractive taxation system, the eligibility to apply for citizenship after five years as a legal resident while keeping other citizenship(s), rich culture, a mild climate, a high level of security, and family reunification.

Successful applicants enjoy the right to live and work in an idyllic, cosmopolitan, and safe European country, with world‑class healthcare. The program also enables access to visa‑free travel in Europe’s Schengen Area and the opportunity, without having to relocate, to apply for Portuguese citizenship after five years as a Portugal Golden Residence Permit holder. Portugal’s passport ranks 5th on the Henley Passport Index, with visa-free access to 187 destinations. You can choose where you are based when you visit Portugal for a minimum of fourteen days in the first two-year period, and seven days per year in subsequent years, to comply with the terms of the Golden Residence Permit. These visits also count towards citizenship eligibility after five years.

There are several investment pathways to secure a Portugal Golden Residence Permit: capital transfer, real estate acquisition, and business creation. Securing residence by investment in Portugal will cost you a minimum contribution of EUR 200,000 if you choose the capital transfer route, but there are also attractive real estate options. Portugal’s luxury real estate market showed great resilience during the pandemic and is expected to continue to do so as investors prioritize quality of life.

Austria – A wealth of options for the ultra-wealthy

Considered one of the most stable countries in the world, Austria’s high quality of life is much sought after and caters to the ultra-high-net worth investor. With awe-inspiring natural attractions and a well-developed economy, Austria makes for an outstanding place of residence.

Ranked joint-2nd in the Global Residence Program Index, Austria offers 10 types of residence permits, which differ firstly on whether you are allowed to work in Austria and secondly on whether you are permitted to work as an employee or be self-employed. For certain permits, including those for persons of independent means, annual quotas apply that are implemented each year by decree. For all other residence permits, strict conditions must be fulfilled.

Two potential routes to residence are the Highly Skilled Category - a special classification that allows foreign nationals to enter Austria if you are highly qualified or qualify as a special executive - and the Austria Private Residence Program for financially independent individuals. The key requirements for the Austria Private Residence Program are for you as the applicant to show sufficient funds, have documented German language skills at A1 level, have permanent accommodation in Austria (a rental or purchase contract for a property that can accommodate you and any dependents included in the application), and have health insurance providing full cover. In addition, you may not take up gainful employment.

Over and above an exceptional quality of life and excellent transport and communications infrastructure, an Austrian residence permit provides the benefit of right of free movement to Austria, the rest of the EU, and Europe’s Schengen Area without a visa. After ten years of legal residence, and in certain circumstances after six years, it is possible to apply for Austrian citizenship.

Italy – Attractive options for high-net-worth families

A founding member of the EU, the third-largest economy in the eurozone, and strategically located in the heart of the Mediterranean Sea, Italy is an ideal place to live. As a resident, you will enjoy high standards of living, education, and healthcare, and a unique quality of life.

To qualify for residence status in Italy, you can choose to invest in one of two program options. The first option is the Investor Visa Program — ranked joint-2nd in the Global Residence Program Index — where you would need to satisfy one of three requirements, namely, an investment of a minimum of EUR 2 million in Italian government bonds, a minimum of EUR 500,000 in Italian corporate bonds or shares (reduced to EUR 250,000 if investing in innovative start-ups), or a non-refundable donation of EUR 1 million in projects of public interest in Italy. The investment must be maintained during the validity of the visa. Your spouse, children, and dependent parents may also request a visa along with your application without additional investment. The second option is the Elective Residence Program — a further qualifying option suitable for individuals who can prove their stable annual income at a certain quantity from abroad.

Whether you opt for the Investor Visa Program, or the Elective Residence Program, your visa will be granted for two years and is renewable for a further three-year period, provided that the investment is maintained. The process usually takes three to four months, and the investment must be made within three months of entry into the country. To obtain the visa, investors must demonstrate a stable income and the purchase or rental of residential real estate in Italy.

There are special tax benefits for high-net-worth individuals in the form of an optional tax regime that allows new residents to substitute regular taxation on income generated outside Italian territory for an annual lump sum payment of EUR 100,000. Italy also recently introduced a pensioner tax regime that grants significant benefits to new tax residents who receive foreign income.

As an Italian resident, you will have access to excellent medical care and education facilities, and visa-free travel to Europe’s Schengen Area. Successful applicants can apply for a permanent residence permit after five years of legal residence in Italy. There is no minimum number of days of physical presence in Italy required for a residence visa, but permanent residence does require relocation. After ten years from the initial granting of the visa, investors may apply for citizenship by naturalization. EU citizens are eligible after only four years of residence.

Switzerland – An excellent business environment for corporations and entrepreneurs

Ranking among the top countries in which to live, Switzerland is home to many international organizations and is noted for its multi-cultural and plurilingual society and its politically and economically stable environment. While often perceived as a very expensive country to live in, the overall cost of living and of doing business in Switzerland compares favorably with France, Germany, the Netherlands, and the USA.

Many of the world's major companies have chosen Switzerland as the location for their global, European, or regional headquarters, their international finance operations, or research and development facilities. The Alpine country is business-friendly and keen to attract not only large corporations but also small- and medium-sized enterprises and private entrepreneurs, offering a solution for every need and expectation.

Ranked 3rd in the Global Residence Program Index, the Swiss Residence Program is designed to assist non-EU or non-European Free Trade Association nationals to obtain a residence permit. The program requires that you be a financially independent individual who is not gainfully employed in Switzerland but will agree to pay a minimum in net annual taxes of CHF 250,000, dependent on the applicant and the canton of residence. This is seen as granting residence to a potential taxpayer and therefore in the ‘fiscal interest’ of the canton of residence.

In addition to the Swiss Residence Program, there are further immigration categories under which non-EU persons may become resident in Switzerland. As a foreign national, you may acquire residence and a work permit to become gainfully employed in Switzerland if your Swiss employers can prove that you are indispensable for a specific function in the company, that you possess the relevant qualifications for this function, and that no suitable candidate can be found in the Swiss or European labor markets. Alternatively, if as a foreign national you establish and are employed in a senior position by a company in Switzerland, a residence and work permit may be issued under the economic promotion program. If you are a retired foreign national of at least 55 years of age, you may be able to obtain a residence permit if you can show close ties with Switzerland and have sufficient funds.

Henley & Partners’ Swiss offices are best positioned to advise and assist you in all matters regarding doing business in Switzerland and provide legal, administrative, and support services on an ongoing basis.

With a residence permit, you will have the right to live and study in Switzerland and benefit from its political, social, and economic stability, the highly qualified and motivated workforce, its first-class infrastructure and world-class secure banking and insurance facilities, and the possible fiscal incentives for substantial investments.

Access to multiple jurisdictions secures future optionality

Travel freedom has become particularly valuable in today’s globalized world, where the ability to cross international borders is instrumental in determining individuals’ economic opportunities, consumption habits, and social status — and more so today, their safety. Until recently, political disruptions and instability would hardly have been considered motivation for acquiring alternative citizenships among those in stable democracies. Yet today, those democracies have succumbed to those exact vulnerabilities.

Residence programs are able to provide high-net-worth families with the peace of mind associated with knowing that they have the option to relocate should the need arise, and many provide a pathway to citizenship after a certain number of years. Dual citizenship now possesses value even to those holding premium passports — and has emerged as an element of protection with value regardless of your primary nationality. From business opportunities and attractive real estate options to culturally enriched, high living standards, the wide variety of residence by investment programs available can cater to the unique needs of any high-net-worth family.

If you wish to learn more about these or any other investment migration programs, please reach out to Henley & Partners. As the pioneering firm and global leader in residence and citizenship by investment, we are best placed to successfully serve international clients and partners interested in acquiring alternative residence and citizenship options.