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Different programs for different needs, learn the main difference between the Portugal Golden Visa and the Turkish CIP
The rapid globalization of the world has driven more of the globe's investors to seek out a second home, be it for them and their families, their wealth, businesses, or otherwise. This enlightenment has increased the demand for residency and citizenship by investment (RCBI) programs, which have become extremely popular in the past two decades.
Any investor exploring RCBI programs will undoubtedly come across Portugal's golden visa, one of Europe's most interesting and popular residency by investment schemes, and they will also likely hear about Turkey's widely popular citizenship by investment program, a route to obtaining Turkish citizenship in exchange for an investment in the country's economy.
However, coming across both of these options may lead to what experts call analysis paralysis, as choosing the most suitable one between them may seem like a difficult task at first, but going into the details shows that while both programs are great, they can be quite different in terms of how they benefit each certain individual. This piece will explore the differences in depth, giving interested investors the information they need to choose the program most suited to their needs.
The most glaring difference between the golden visa and the Turkish Citizenship by Investment Program (TCIP) is the status each one grants.
Starting with Turkey, its program gives applicants the chance to become full-fledged Turkish citizens through investment. This means they will obtain a certificate of naturalization and a Turkish passport, which provides visa-free travel to 111 destinations worldwide.
The golden visa awards successful applicants with a residency permit, which allows them to live, work, and study in Portugal.
While the residence permit is not a travel document, holders of the golden visa can access the EU visa-free due to Portugal's status as a member state.
The difference between residency and citizenship congregate in two main issues; the first is the rights granted to each. A residence permit holder usually has all the rights granted to a citizen except political privileges, such as the right to vote or run for office.
The second main difference is the travel mobility granted through a passport. However, in this case this issue is highly mitigated, as a golden visa grants visa-free entry into the entire EU, while the Turkish passport grants visa-free entry to 111 destinations worldwide, none of which are in the EU realm. Hence, in terms of immediate travel ability, the better option highly depends on where the person wants to travel, if it is to EU states then a golden visa is a better option, but if it is a country in South America or Africa, the Turkish passport can get the job done.
It is also worth noting that the golden visa, while not a direct citizenship by investment program, can be described as an indirect one. Successful golden visa applicants can qualify for citizenship after five years if they only spend 14 days every two years in Portugal, which totals just five weeks over the five year period, to qualify for EU citizenship.
In terms of global mobility at that instant, the Portuguese passport trumps its Turkish counterpart, offering visa-free access to 186 destinations worldwide, including the EU, UK, USA, Canada, and many more.
So those looking for a robust passport and are willing to wait a while longer, or those undertaking the venture for their children and future generations, are better off going with the Portuguese option.
In terms of the investment options, both the golden visa and the TCIP offer applicants various investment ventures to choose from. Portugal requires investors to hold their investment for five years, while Turkey has set a three-year holding period.
Both have a real estate option, allowing investors to acquire real estate from the open market to qualify for their respective programs. In terms of cost, Portugal's option proves more economical, with the minimum investment threshold for real estate set at 280,000 euros (approximately 293,000 USD).
Turkey's real estate option had a rollercoaster ride in terms of price, starting at 1,000,000 USD in 2017 before dropping to 250,000 USD, and most recently set to rise to 400,000 USD on June 12th, 2022.
When it comes to liquid investments, both offer various options. Portugal's most popular liquid investment option, and the one that is quickly becoming the most popular overall, is the mutual investment fund option for 500,000 euros. This provides investors with a safe, simple, and easy-to-liquidate option that proves great value for money. Portugal
Turkey allows investors to make deposits, purchase government bonds, or invest in real estate investment funds for no less than 500,000 USD. While approximately similar in price, the Turkish liquid investment options do come with one major risk - they have to be made in Turkish Lira, a currency known for its volatility and turbulent nature. Holding an investment in Turkish Lira for three years is unexpected, as an investor could profit, break even, or concur massive losses at the end of the tenure.
Both the golden visa and the TCIP have streamlined programs. The premise is simple, make a qualified investment and obtain status in the country.
The Turkish program does have slightly quicker processing, taking on average six months compared to Portugal's nine. However, Portugal does edge out the Turkish program in terms of adding dependents, as while the TCIP allows investors to add their spouse and children below 18, the golden visa allows them to add their spouse, dependent children regardless of age, and the dependent parents and grandparents of both the main applicant and their spouse.
This inclusivity makes the golden visa a viable option for large families and investors looking to obtain status for as many family members as possible under the umbrella of one investment.
In terms of obtained benefits, each option provides a similar set in principal, but it comes down to the details.
Both Turkey and Portugal are outstanding places to live, full of amazing culture, mouthwatering cuisine, excellent healthcare, outstanding education institutes, and great living standards.
The main difference boils down to the regions they are in. Turkey, of course, bridges the West and East, a connection between Europe and Asia, and is influenced by Middle Eastern, Asia Minor, and European cultures.
Portugal, on the other hand, is purely European and is a member of the EU. Its status as a major EU member state does play a massive role in the benefits it offers, as those who obtain an EU residency or passport can benefit from the entire Union, opening up the doors to 27 countries instead of just one.
So in truth, the difference in benefits comes down to each investor's personal preferences and where they want to cement the foundation for their children's future.
Both the golden visa and the TCIP are amazing programs in their own right, and as is the case with all RCBI programs, neither is better on its own, but is better suited for each specific individual.
If you are interested in finding out which program suits your needs better contact us today to book a free, comprehensive consultation with one of our experts.
Optylon Krea is an investment management and real estate development company that caters to the needs of international Golden Visa investors, with €1.8 Billion managed to date from Portugal to Turkey.
We have been the first to explore the Golden Visa eligible fund route in 2018 and are currently leading that market segment with more than € 200M under our advisory.
We strongly believe that Portugal is shifting from a mass tourism destination to a luxury resort. That is why we are bringing momentum to the main cities by developing high street retail and prime serviced apartment projects.