The End of Malta Citizenship by Investment Programme?
The European Commission (EC) has recently expressed concerns over Malta’s citizenship by investment programme, claiming it poses certain risks of money-laundering and corruption. In the latest letter sent to the Maltese government the EC recommended to “phase out” the present scheme. Didier Reynders, EU Justice Commissioner, confirmed that the Commission urged Malta, along with Cyprus and Bulgaria, to step back from the current citizenship schemes, though he acknowledged that they nonetheless remain matters of national competence.
In response to the EC statement, the government of Malta issued a reply pointing out that it had made a clear decision to restart the Individual Investor Programme (IIP) once the existing one has reached its cap limit, while it would be “open to ideas that could further improve the programme”.
According to Edward Scicluna, Finance Minister of Malta, 80% of the IIP revenue will be used to support the island’s economy and business during the Covid-19 pandemic. In comparison, only 30% of the programme financial resources is usually credited to the state Consolidated Fund. The current Coronavirus pandemic and economic distress happening all over the world have increased Malta’s dependence on the IIP more than ever before.
Malta has been running the IIP for foreign nationals who are willing to obtain the island’s sought after citizenship since 2013. Throughout this time, the programme has been extremely successful among UHNWI worldwide. The minimum investment threshold for participation in the scheme is approximately €1 million. The overall investment amount consists of a non-refundable contribution into a designated Government fund, a purchase of property or a property rent for a minimum of 5 years, and an investment in Maltese government bonds. Among other requirements in order to qualify for Malta IIP, investors are required to pass a strict four-tier due diligence assessment and show their genuine interest in Malta as a place to live in. Citizenship of Malta through the IIP can be granted in around 14 months from the date of application.
It is expected that, once the present IIP reaches its capacity, the investment threshold of the revised programme will increase. This incentivises interested private clients to make haste on their decisions to become Maltese citizens. Malta has one of the fastest-growing economies in Europe, a strong national health system and good-quality education. It is strategically located in the centre of the Mediterranean Sea and has a warm and mild climate. Malta offers all its citizens many benefits including the opportunity to live, study and work in any EU country. Maltese citizens may also relocate to the UK as long as the Brexit transition period is still ongoing.
