Permanent Residence vs Residence Permit: Key Differences in Statuses

Residency statuses vary. Some offer temporary residence, while others provide permanent status. The distinction is crucial for those looking to invest in a country, as each status comes with different rights and obligations. Understanding these differences helps in choosing the right option based on long-term goals.

Vladlena Baranova, Lawyer, AML Compliance officer at Immigrant Invest, certified CAMS specialist, discussed the distinction between temporary and permanent residency options by investment; highlighted the long-term benefits of securing permanent residence by investment.

Difference Between Permanent and Temporary Residency

A residence permit allows temporary stay. It is issued for a fixed period, typically ranging from one to five years. Renewal is usually required, and the conditions may change. In most cases, residence permit holders do not have the same rights as permanent residents.

Permanent residence offers long-term stability. It does not require renewal and allows the holder to stay indefinitely. Some easiest countries for residency grant permanent residence after a certain period of holding a temporary residence permit, while others offer direct access by investment.

Key differences:

1. Duration: temporary residence permits require renewal, while permanent residence is indefinite.
2. Rights: permanent residents have more rights, including easier access to work and social benefits.
3. Path to citizenship: permanent residence is often a step toward citizenship, while temporary residence may not always lead to naturalisation.
4. Exit requirements: some temporary residence holders must spend a minimum number of days in the country annually, while permanent residents often have fewer restrictions.
5. Work and business limitations: in some countries, temporary residents may have restrictions on employment or business activities, whereas permanent residents often enjoy greater economic freedoms.

Where Foreigners Can Obtain a Residence Permit by Investment

Several countries offer residence permits by investment. These programs provide investors and their families with legal residency in exchange for economic contributions. Popular destinations include:

Portugal. The Golden Visa grants a residence permit for investments starting from €250,000 in cultural projects or €500,000 in investment funds. Renewal is required every two years, and after five years, permanent residence or citizenship becomes an option.

Greece. The Greek Golden Visa requires a minimum real estate investment of €250,000. The residence permit is valid for five years and can be renewed if the investment is maintained.

Hungary. The Hungary Golden Visa program allows investors to obtain a residence permit through a government-approved real estate fund investment of €250,000. The permit must be renewed, but it offers a path to permanent residence.

Spain. The Spanish Golden Visa requires an investment of at least €500,000 in real estate. Holders must renew their permit every two years but can apply for permanent residency after five years.

Italy. Italy’s Investor Visa grants residence for two years with an investment starting from €250,000 in innovative startups or €500,000 in an Italian company. It is renewable and can lead to permanent residency.

Where Foreigners Can Obtain Permanent Residency by Investment

Some countries grant immediate permanent residency by investment. This eliminates the need for renewals and provides long-term security. Notable examples include:

Malta Permanent Residence Programme requires an investment in real estate or government contributions. To apply for the Malta MPRP, applicants meet several key requirements:

1. Rent real estate for at least €14,000 per annum or buy a property for at least €375,000.
2. Application administrative fee. Investors pay €15,000 as an initial payment and €35,000 at the final stage, regardless of whether they choose to buy or rent property.
3. Government contribution. Investors must make a one-time, non-refundable contribution of €30,000 to the government if purchasing property, or €60,000 if renting.
4. Donation to a non-governmental organisation. An additional donation of €2,000 is required to a local NGO. This donation contributes to social projects in Malta.
5. Proof of funds. Applicants need to demonstrate assets worth at least €500,000, with €150,000 in liquid financial assets. This ensures that applicants have sufficient financial stability to support themselves and their families.

Cyprus. The Cyprus Permanent Residency Programme grants permanent status through a real estate investment of at least €300,000. It does not require renewal, and holders can apply for citizenship after a specified period.

How to Apply for a Residence Permit by Investment

The application process varies by country. However, most programs follow a structured process:

1. Choose the investment option. Each country has different investment requirements, such as real estate, government bonds, or business investment.
2. Submit the application. This involves providing personal and financial documents, along with proof of investment.
3. Undergo Due Diligence. Authorities conduct background checks to ensure applicants meet eligibility criteria.
4. Receive residence permit approval. Once approved, applicants may need to visit the country for biometrics and other formalities.
5. Fulfil renewal or conversion conditions. Some permits require periodic renewals, while others can be upgraded to permanent residence or citizenship after meeting specific conditions.

Additional considerations:

• residency may affect tax obligations in the new country and the applicant’s home country;
• many programs allow spouses and children to be included in the application, but specific rules apply;
• some residency permits grant visa-free access to certain countries, which may be a key factor for frequent travellers.

Conclusion

Choosing between a residence permit and permanent residence depends on investment goals. Temporary residence suits those looking for flexibility, while permanent residency compared to residence permit provides long-term security. Several European countries offer both options by investment programs. Investors should evaluate legal requirements, renewal conditions, and long-term benefits before making a decision.