Citizenship vs residency in Europe: what investors need to know

For global investors, not all European access is created equal. While both residency and citizenship offer a foothold in Europe, the long-term rights, mobility, and implications of each vary significantly. For families planning generational transitions, entrepreneurs hedging regulatory risks, or professionals building a life across borders, understanding the distinction is essential. In this article, we break down the difference between the two, highlight how it plays out in Portugal, Greece, Italy, and Malta, and clarify the broader frameworks of Europe, the EU, and Schengen.

Europe, the EU, and the Schengen area: setting the map straight

It’s easy to confuse geographic and legal boundaries, but the distinctions matter.

Europe is a continent. It includes countries that are in the EU, countries that are in the Schengen Area, countries that are in both, and some that are in neither.

The European Union (EU) is a political and economic union of 27 member states. EU citizenship grants the right to live, work, and study in any other EU country, and is automatically conferred with citizenship from any EU member state. Countries that are in the EU, but not part of the Schengen travel area include Cyprus and Ireland. 

The Schengen Area is a zone of 29 countries that have abolished internal borders, allowing for passport-free travel. This includes most EU countries as well as a few non-EU members like Switzerland, Liechtenstein, Iceland  and Norway.

So, while residency in a Schengen country like Portugal typically includes visa-free travel within Schengen, that residency does not confer the right to relocate, work, or study in another EU country. Citizenship does.

Strange facts:

Bulgaria and Romania are EU member states that have been partially integrated into Schengen. As of 2025, they have joined the Schengen Area for air and sea travel, but not yet for land borders. However, their status is considered "partial" Schengen membership.

What residency really offers

Residency grants the legal right to live in a country. Residency programs vary across Europe, but for investors, they typically come through real estate, funds, business, or donation-based pathways.

Residency means:

• You can live in the issuing country.

• You may gain access to healthcare, schooling, and financial services.

• You can usually travel within Schengen for up to 90 days in any 180-day period.

What it doesn’t mean:

• You cannot move to another EU country and set up residence unless you obtain a separate permit.

• You don’t have political rights or access to an EU passport.

• Your residency is conditional and must be renewed or maintained.

What citizenship confers

Citizenship is full legal membership in a state. With EU countries, this means more than just a passport.

Citizenship means:

• You can live, work, and study in any other EU country.

• Your children and future descendants inherit the same rights.

• You have full political rights (voting, running for office).

• You are entitled to consular protection abroad.

However, with citizenship comes permanence. It’s typically harder to reverse, and may bring obligations such as taxation, military service, or civic duties.

Country by country: how it plays out

Portugal

• Residency: The Golden Visa remains one of the most flexible, with only 7 days of physical presence required per year.

• Mobility: Visa-free Schengen access.

• Citizenship timeline: eligible *5 years after submitting your application for Golden Visa holders. Language proficiency and integration ties are required.

  *law currently under review

Greece

• Residency: The Golden Visa has no minimum stay requirements, making it appealing to those who prefer minimal physical presence.

• Mobility: Schengen access, but no relocation rights within the EU.

• Citizenship timeline: 7 years of continuous physical residence with integration measures. Very challenging path to citizenship due to language requirements.

Italy

• Residency: Through the Investor Visa or Elective Residency pathways, with a requirement to establish ties and maintain legal status.

• Mobility: Schengen travel permitted.

• Citizenship timeline: 10 years of residency, including consistent physical presence, plus language and cultural integration requirements.

Malta

• Residency: Permanent Residency Program (MPRP) offers a lifetime solution with Schengen travel.

• Mobility: Visa-free Schengen access, but not EU relocation rights.

• Citizenship timeline: MPRP is not a natural route to citizenship. Requires relocation and continuous physical presence of 12+ years to be eligible.

Long-term considerations for global families

Citizenship is about permanence. Residency is about optionality.

Many families begin with residency as a hedge, a backup plan, or a way to test-drive life in Europe. But for those thinking generationally, or wanting full mobility, citizenship becomes the long-term play.

Some key questions to consider:

• Are you looking for travel access or a full relocation option?

• Is this a foundational hedge or a lifestyle choice?

• How important is passing on status to children?

• Do you want flexibility, or a permanent anchor?

What to watch for

• Physical presence: If citizenship is your goal, you may need to live in the country. Most routes require active, consistent time spent in-country (except Portugal)

• Tax implications: Residency can trigger tax residency if you meet time thresholds or establish strong ties. Citizenship alone does not, except in countries with worldwide taxation (e.g. the U.S., not applicable here).

• Reversibility: Residency can be paused or abandoned. Citizenship, once obtained, is for life, unless formally renounced.

What you own, and what you borrow

Residency is a legal allowance to stay. It gives access, not identity. Citizenship is identity. It gives permanence, power, and protection.

One is flexible, the other foundational. The right one depends on your timeline, your needs, and the legacy you want to build.

We can help you navigate either, but knowing which to pursue first is where clarity begins.

Schedule a consultation call to learn more