What is citizenship?
Citizenship is a permanent legal status that grants individuals full rights and responsibilities in a country. Citizens can vote, run for public office, and access social benefits like healthcare and education.
Citizenship can be acquired in several ways, including by birth, descent, naturalization, or even through Golden Visas. Citizenship status is usually permanent and difficult to revoke, except under exceptional circumstances. It also carries obligations, such as paying taxes and, in some countries, even military service.
What is residency?
Residency allows a person to work and live in a country for a specific or indefinite period but without the full rights of citizenship. It can be granted through work permits, family reunification, or investment programs. Residents have limited access to public services and they cannot vote or hold political office.
Residency can be temporary or permanent, depending on the visa type, and often requires renewal or adherence to specific conditions. While residents can enjoy many benefits, permanent residency status is less secure than citizenship.
What is a residence permit?
A residence permit is an official document that allows you to live in a country for a specific period. For example, the Portugal Digital Nomad Visa allows remote workers to reside there while working for foreign employers. Temporary and permanent residence permits are usually issued to foreign nationals for purposes like work, study, family reunification, or investment.
What is a permanent resident?
A individual with lawful permanent resident status can live and work in a country indefinitely under certain conditions but they do not have voting rights nor can they hold political office. Permanent residents hold a more long-term status than temporary residents, but they do not have the more secure citizenship status.
Residency versus citizenship: What's the difference?
Citizenship is permanent and offers individuals full legal rights within the country. Those with citizenship status can vote, hold public office, and are entitled to a passport.
Residency, on the other hand, is not permanent as it usually gives people the right to live and work in a country. However, it has restrictions, such as the need to renew permits and the inability to vote or hold political office.
Residency is granted through a residence permit. This official document issued by a country’s government allows a foreign national to legally reside within that country for a specific period, subject to certain conditions.
In short, the most significant difference between citizenship and residence is the ability to apply for a passport for the country in which you reside. Permanent residents do not have the right to apply for a visa.
Key differences between citizenship and residency
Residency | Citizenship | |
Legal Status | Legal permission to live in a country temporarily or permanently | Full legal membership in a country |
Acquisition | Typically through visas, work permits, family reunification, or investment | By birth, descent, naturalization, or investment |
Right to Vote | No | Yes |
Eligibility for Political Office | No | Yes |
Access to Public Services | Limited or conditional access to services like healthcare | Full access to social services like healthcare and education |
Passport | Cannot hold a passport of the country | Eligible to hold the country's passport |
Travel Rights | Restricted; may need visas for certain travel | Broader access to visa-free or visa-on-arrival countries |
Military Service Obligation | Typically no | May be required in some countries |
Tax Obligations | Required to pay taxes if living or earning income in the country | Must pay taxes, even on global income in some countries |
Permanence | Conditional, can be revoked if residency requirements are not met | Generally permanent, can only be revoked under rare circumstances |
Dual Status | Can maintain residency in other countries | May be allowed, depending on the country's laws regarding dual citizenship |
Inheritance | Residency status typically not inheritable | Citizenship can often be passed to children or dependents |
What are Golden Visa programs?
Golden Visa programs are residency by investment schemes that grants foreign investors and their families the right to live, work, and study in a country in exchange for a qualifying financial investment. These investments often include purchasing real estate, creating jobs, or contributing to government funds. While Golden Visa programs provide residency, some programs residency as a pathway to citizenship after a certain period.
Discover the best Citizenship by Investment programs
Pros and cons: Residency by investment vs citizenship by investment
To summarize, residency by investment (RBI) programs grant foreign investors the right to either temporarily or permanently reside in the host country and citizenship by investment (CBI) programs allow foreign investors to obtain citizenship and access the same rights as natural-born citizens.
Let’s dive deeper into the nuanced differences:
Financial Commitment
Even though both programs require an investment, they differ in the amount. Residency by investment’s financial commitment tends to be lower and citizenship by investment is more substantial. This due to citizenship bringing along with it greater responsibilities and benefits so the financial obligation should match these.
Travel Privileges
Residency by investment only provides unrestricted access to the host country and, in some cases, also the territories and other countries forming part of the country’s regional coalition (for example, the EU).
Citizenship by investment grants its applicants a new passport, giving holders unrestricted access to the host country as well as visa-free and visa-on-arrival travel to other countries that natural-born citizens can access as well.
Residency Requirements
Residence permit holders are oftentimes limited to how long they can stay abroad or else they can potentially lose their residency. They may, in some cases, even be required to obtain a re-entry permit when returning to the host country after traveling for a certain period of time.
Citizenship status does not change regardless of where the citizen travels to or how much time they spend outside of the country.
Duration
Citizenship by investment creates a permanent status for its successful applicants and that same status can even be passed on to future generations.
Residency by investment is typically temporary. In some countries the program offers permanent residency but it comes with conditions such as maintaining the investment for a set period of time.
Taxes
Citizenship by investment may result in tax obligations, especially in countries where taxes are based on a person’s citizenship status. However, foreign investors often benefit from more favorable tax laws than others who become citizens through naturalization.
Residents, on the other hand, are usually only taxed on income earned in the country.
Civic Duties
Since citizenship by investments affords individuals the same rights as natural-born citizens, they may be required to fulfil certain civic duties. Depending on the country, they might have to attend jury duty or perform military duties. On the pro side, citizenship affords the individual the right to vote or even hold political office.
Those who go through the residency by investment program don’t have to fulfil these types of duties. They also cannot vote or participate in political activities.
Get the benefits of residency through investment
Residency vs citizenship in the US
The U.S. is worthy of highlighting in the residency vs citizenship context because of its popular green card and citizenship policies. The U.S. green card system allows permanent residency with significant rights, but citizens hold privileges like the ability to vote in federal and national elections, a U.S. passport, and protection from deportation.
Additionally, the naturalization process in the U.S. is pretty straightforward for green card holders, who can become citizens after five years of residency.
Here are the key differences between a U.S. permanent resident vs citizen:
Point of Distinction | US Citizenship | US Permanent Resident Permit |
Ability to apply for a Passport | You can apply for a US passport | US permanent residents do not have the right to apply for a US passport |
Mobility | The benefit of traveling US passport visa free countries | Disadvantage of not having travel access available to Americans |
Working and studying abroad | Enhanced options of choosing from various US institutions and organizations | US permanent residents have more limited prospects of working and studying in the United States |
Protection | The right to US consular assistance overseas | No assistance from the US government when traveling abroad |
Voting rights | US citizens have the right to vote in federal and local electrions | Green Card holders do comprehensive voting rights |
Residency | US citizens maintain citizen status regardless of time spent abroad | US permanent residents are limited in the time they can spend abroad and require a re-entry permit, depending on how long they spend overseas |
Ownership | Citizens can own any type of property or commodity | Residents may be restricted in the types of property they own or may be limited to ownership in specific areas |
Applications for residency and citizenship in the US
While it is similar in many countries, the applications for residency and citizenship in the US are broken down as follows:
Permanent residency status application
- Three years of residency, less than the five years required for citizenship.
- Documentation includes proof of identity, background checks, and evidence of financial stability.
- Applicants retain their original citizenship, so there is no requirement to take an oath of allegiance to the United States.
- Processing times are usually shorter than US citizenship applications and are normally processed within a year.
US citizenship application
- It involves meeting stringent eligibility criteria, including a three-year residency period after obtaining permanent resident status.
- Submission of detailed documentation, including proof of identity, criminal record certificates and proof of continuous residence.
- An interview and citizenship test to prove knowledge of U.S. history and customs and proficiency in one of its official languages is required.
- Processing times take at least 18 to 24 months.
How Can Global Citizen Solutions Help You?
Global Citizen Solutions is a boutique migration consultancy firm with years of experience delivering bespoke residence and citizenship by investment solutions for international families. With offices worldwide and an experienced, hands-on team, we have helped hundreds of clients worldwide acquire citizenship, residence visas, or homes while diversifying their portfolios with robust investments.
We guide you from start to finish, taking you beyond your citizenship or residency by investment application.
Frequently Asked Questions about Citizenship vs Residency
Is permanent residency better than citizenship?
When deciding between permanent residency and citizenship, consider personal circumstances, goals, and preferences. Permanent residency offers limited rights, so it’s important to consider factors like long-term plans, mobility, desired privileges, and commitment to a country.
Does permanent residency mean citizenship?
No, permanent residency does not mean citizenship. Permanent residency grants individuals the right to live and work in a country indefinitely but does not include full citizenship rights, such as voting or holding a passport. While permanent residents may eventually apply for citizenship, they must typically meet certain requirements, including residency duration and other legal obligations.
Are you a US citizen if you're a resident?
US residency and citizenship have different legal statuses. Residency permits living in the US temporarily, while citizenship grants full membership with all its rights, privileges and responsibilities.
Can residency be revoked?
Immigrant visas can be revoked for several reasons such as non-compliance with the minimum period of being physically present in the country, violation of immigration laws, fraud, misrepresentation, and criminal activity.
Do all permanent residents have a Green Card?
In the United States, a Green Card is a permanent residence card granted to foreign nationals, serving as proof of their right to live, work, and establish the US as their permanent home.
Why do people invest in residency?
Investing in residency offers numerous benefits, including the ability to live, work, and study in the country of your choice, increased mobility, and financial and personal freedoms. In most cases, your immediate relatives also qualify.
Who is eligible to apply for a residency program?
Eligibility requirements vary by country but typically include a clean criminal record, adequate health insurance, legal source of funds, minimum qualifying investment, foreign nationality, and passing biometric and regulatory checks.
How does residency differ from citizenship in terms of rights?
A person with citizenship possesses full rights, including the right to vote, hold public office, and fully participate in political processes.
A permanent resident only has the right to live in the country but their rights may not include the ability to vote. There is also potentially restrictions on access to government services and freedom of movement from one country to another.
Can a permanent resident become a citizen?
Yes, a permanent resident can become a citizen through the process of naturalization. This means they have to meet a specific set of criteria such as having been a permanent resident for a period of time and passing a citizenship test (which differs from country to country).
Does residency allow me to work in a country?
Yes, residency generally means you can work and live in a country.
Is residency permanent or temporary?
Residency can be either permanent or temporary. A permanent residency permit allows a person to live in a country indefinitely while temporary residency is only allowed for specific period of time, which is dependent on the type of visa or permit.
Can a temporary or permanent resident hold a passport?
No, you must become a citizen to hold a passport. Permanent residents don’t usually receive a passport as it’s meant to signify citizenship.
What is the relationship between citizenship and voting rights?
Citizenship gives you the full right to vote and participate in other political activities such as holding office. On the other hand, residency doesn’t give you the right to vote in most countries.
Can a temporary or permanent resident own property like a citizen?
Yes, someone with a residence permit can purchase and own property in the same way as citizens of a country.
Can a permanent resident be deported?
Yes, someone with a residence permit can be deported but it’s dependent on certain circumstances.
Deportation can happen if they violate the terms of their permit, are deemed a security threat or commit a serious crime. However, the deportation process will involve legal proceedings and the opportunity to challenge the order.
Is residency by investment cheaper than citizenship by investment?
Yes, in general, residency by investment programs can be cheaper than citizenship by investment as they have lower investment thresholds.
Which option is better for digital nomads - residency or citizenship?
Residency would generally be the best option as it allows for greater flexibility to live in different locations. Residency also gives you access to visa-free travel to more countries, the same as with citizenship.
What are the easiest countries to obtain residency versus citizenship?
The easiest countries to get residency are considered to be Mexico, Belize, Nicaragua and Cambodia because of short processing times and few restrictions.
Some of the easiest countries to gain citizenship in include Portugal, Argentina, Italy, St. Kitts and Nevis, Malta, Ireland, Greece and Grenada. This is due to few requirements or short processing times.
Residency vs citizenship - how do healthcare and eduction benefits differ?
Citizens have access to a wider range of economic and social benefits like healthcare and education but a temporary or permanent resident has limitations placed on them depending on specific requirements.
Which option is better for business owners — residency or citizenship?
Permanent residency is better for business owners than citizenship as they can establish their business in a new location without the full commitment of citizenship.
You have lower investment requirements and can still enjoy the benefits of property ownership and access to local banking facilities.
Are there any risks in choosing residency over citizenship?
Residency has less stability than citizenship. You run the risk of losing residency if you don’t meet continuous requirements, fail to renew your permit (where applicable) or violate immigration laws.
