How investing in bonds to get permanent residency is a better option than real estate

investing in bonds

Citizenship by investment is a process through which you can get citizenship in any country by investing in its economy in the form of bonds or real estate or any other form permitted by the government of that country. To know more about citizenship by investment, you can speak to the global mobility experts at SmartMove Immigration.

The benefits of having a second passport is huge especially when it comes to expanding your portfolio as an investor. Taking the business global is every entrepreneur’s dream and goal and getting citizenship in a country of your choice accelerates the process of achieving it. There are several other benefits too such as better health care facilities and access to quality education at affordable rates. You can get citizenship by investing in bonds or real estate however investing in bonds is a better option than real estate.

Read – What is an Investor Visa?

Benefits of investing Bonds

Bonds have various advantages when it comes to investing and they are listed as follows:

  • Bonds help in spreading out risks – One of the basic principles of fundamental investing is to spread out your risks, which bonds facilitate.
  • Diversification of Portfolio – A diverse portfolio is what an investor needs the most which bonds provide you with.
  • Protection from market swing – The unpredictability of the market is always a fearsome uncertainty. Bonds may do well when other types of investments like real estate and stocks fall which give an additional security to the investor.
  • Bonds can provide steady income – Buying a bond is essentially lending money to an entity and betting that they will pay your money back. Since bond issuers repay debt over time, it generates a steady income flow however choosing a low risk bond becomes very crucial here.
  • High interest rates on bonds – The interest rates on bonds are often higher than savings rate at banks or CDs.
  • Bonds perform well when stocks fall- When the stock market declines, interest rates fall and bond prices rise in return.
  • No transaction cost – Bonds can be bought or sold without a substantial transaction cost which increases the return on investment.
  • Liquidity – Bonds can be bought and sold for a profit in a matter of seconds which makes it highly liquid.
  • No travel requirements – You don’t need to travel to gauge your investment.
  • Citizenship – You can start your second residency without leaving the premise of your house.

While investments are always subject to market risks, investing in bonds is still a safe option which also diversifies your portfolio. Real estate is also a way to invest for citizenship but it is more risky than bonds. Experts at SmartMove Immigration will give you more details if you are considering citizenship or permanent residence by investment.

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Disadvantages of Real Estate Investment

Downsides of investing in real estate are the risks it brings along and the liabilities it generates. Following are the drawbacks of investing in real estate:

  • High transaction cost- Transaction cost for trade for real estate is very high and therefore it can significantly impact the value of the investment and will make it difficult to turn profit.
  • Low liquidity – Properties cannot be bought or sold quickly without a substantial loss in value therefore it is illiquid when compared to stocks and bonds that can be bought or sold for profit in a fraction of seconds.
  • Maintenance and management – If the property sits empty for a prolonged period of time, liabilities such as management fees, maintenance costs, insurance etc. quickly start mounting.
  • Unique risks – Real estate has unique risks such as buying the wrong property, liabilities due to any accident etc.
  • Travel requirement: You need to travel to the location of your property to make an informed decision of buying a property and whether or not it is profitable in the long run.

While the investment amount for citizenship for both property as well as bonds is the same, yet investing in bonds becomes a better and preferred option.

Investment in Government Bonds for Citizenship

  • Bulgaria offers permanent residency through investment of € 1.02 million in government bonds. The government bond portfolio is for an investment duration of five years.
  • Malta offers permanent residency through investment of €250,000 in government bonds. The investment has to be for at least a period of 6-9 months.
  • To know more about citizenship through investment program, you can speak to experts at SmartMove Immigration for further information and details.

Conclusion

Getting a second passport and permanent residency is an opportunity that shouldn’t be missed. It helps you expand your investment portfolio and diversify it. It also gives you more business and entrepreneurial avenues. The citizenship by investment program gives you this lifetime opportunity. Investing in bonds and real estate are the popular ways of investing however investing in real estate isn’t as good due its risks and disadvantages. Bonds provide liquidity and freedom while real estate generates many liabilities without liquidity. Hence bonds should be preferred over real estate while investing for citizenship.

At SmartMove Immigration we are offering unique investments in Bonds to get citizenship by investment. Our clients in UK or India can speak to any of our Global Mobility experts based in London | Dubai | Hong Kong| Mumbai | Delhi | Gurgaon | Chandigarh | Vadodara | Bangalore. Give us a call on +91 8657 516 866 / +91 9819 127 002 or email us at investor@smi.legal and book your appointment with our Investor Visa Experts.