Investing in real estate have been a top priority for many investors seeking a second passport. Many real estate developers offer a buyback shares option for the purpose of citizenship by investment and golden visas (residency). These developments can range from residential towers, five star hotels, resorts and other commercial office structures.
Property developers raise money to build large scale real estate developments issuing shares to investors. For example a property developer could issue $200,000 per share and can issue upto 200 limited shares to raise equity capital $4m. These shares are again purchased back by the same developer after 5-6 years (guaranteed) making it a refundable investment for you. This way your money is safe and wisely invested without being wasted.
The Buyback share option from the same developer is super interesting, considering you dont have to struggle with buying a titled property, and save yourself hassles searching for a new buyer, which consumes a lot of time.
The biggest advantage of investing in shares is during the invested period, you get to become a citizen or permanent resident. You investment also yields 3-4% from the date the development is completed by the developer. After redeeming your share, you get to still keep your citizenship or residency for life. Buying a share might be cheaper tax wise compared to buying a real property with title deed. You do not get to live in the property by subscribing to shares. Some developers permit 2 week vacation in a year for share holders.
Growing Companies with good value buys its own outstanding shares to reduce the number of shares available on the open market (invest in themselves). Companies do buybacks for various reasons, including company consolidation, equity value increase, and to look more financially attractive.
Remember the minimum investment required for CBI programs is $200,000 and for Golden visa (Portugal) is slightly higher 280K euros.
Citizenship by Investment
A number of Govt approved property developers building five star resorts offer the buyback shares option in these countries. It is important to remember that only investing in government approved developments will make you eligible for citizenship, else you will be wasting your money. (You wont get passport)
If your country legally permits dual citizenship you can confidently invest in Caribbean real estate programs in these below countries, else think investing in Golden visa residency schemes.
- Grenada – $200k
- Antigua and Barbuda – $200k
- Dominica – $200k
- St Kitts and Nevis – $200k
- St Lucia – $300k
- Montenegro – €250k
Remember with this option you get instant citizenship with passport within 4 months.
These are residence programs with the possibility to invest in five star hotel shares. Golden visa also leads to citizenship after 5 years in case of Portugal.
- Portugal – 280K euro
- Greece – 250K euro
Portugal has number of hotels that offer buyback shares with yields that comes with golden visa package. If EU citizenship is your goal after 5 years (without compulsory living), then look no further than Portugal. With new changes for 2022 looming, the minimum required investment will jump from 280K euros to 350K euros (only in inner regions) from 2022. The hotel buyback share investments in Portugal are almost sold out and we expect a huge last minute rush likely at the end of 2021.
How to invest safely?
Real estate investments including buyback shares are subjected to risks. Do your homework and invest wisely. We give you important tips before investing, especially during the Covid period. If the developer goes bankrupt, it is likely the whole investment is gone..
- Reputation and track record of the developer
- Look into balance sheets, debt, cash flows. (dont believe in projections)
- Hire a lawyer to looking into the legal aspects of the development including valuation report.
- Be clear with the property and other taxes involved.
- Check for Government approvals to be listed in the approved projects.
- Do not invest in schemes promoted by agents that undercut than minimum specified by government. Protect yourself from scams
If you think investing in real estate is risky during covid period, then investing in government bonds may also calm your nerves.