Malta’s controversial IIP sale-of-citizenship scheme is no more, with the government set to terminate it as of September.
With the scheme fast approaching its 1,800 successful applicant cap, parliamentary secretary for citizenship Alex Muscat said the government has decided not to renew it but to launch a residency programme that can lead to citizenship instead.
Investors can apply for a residency programme that can lead to citizenship against a €600,000 fee, but they will have to live in Malta for three years before applying for citizenship. Those who invest €750,000 will be able to apply for citizenship after one year of residence.
They will also have to pay €50,000 for every dependent and purchase a property costing at least €700,000, up from the current €350,000, or rent one for at least €18,000 a year, up from the current €16,000. They will also have to provide an architect’s report stating that the property is indeed worth what it was bought or rent out for, an attempt to clamp down on abuse in the current system.
A €10,000 philanthropic donation to NGOs will be made mandatory, with applicants getting to choose their own NGOs, granted they are registered and regulated.
Before applying for citizenship, people will first have to pass through an eligibility assessment, involving due diligence and background verification reports.
Successful citizenship applicants will be capped at 400 a year and 1,500 for the entire scheme and their names will be published.
The current Individual Investor Programme Agency will close and be replaced by a new agency responsible for the administration of all paths leading up to Maltese citizenship.
Agents will be limited to a set of professions who are familiar with laws related to anti-money laundering and financing of terrorism, while a legal notice will be introduced to regulate them.
Launched by former Prime Minister Joseph Muscat in 2013, the IIP allowed foreign nationals to purchase Maltese citizenship at a cost of €650,000 and has generated an estimated €1.6 billion to the Maltese economy over the years. However, it has often been criticised by the Nationalist Party and the European Commission, with EC vice-president Vera Jourova recently stating it amounts to the monetisation of the rights enjoyed by EU citizens.
When campaigning for Prime Minister last December, Robert Abela said everything must be done to preserve the scheme as it had brought a lot of wealth into the country, although he was open to introducing more due diligence. And the scheme took on a new context in the wake of the COVID-19 pandemic, with the government stating the funds it generated proved crucial in helping the economy.
However, in April, the government announced it will launch a revised programme once the IIP’s 1,800 person limit has been reached.
Alex Muscat said the new scheme isn’t being launched to appease Moneyval, which is set to decide next October whether or not to place Malta on its financial ‘grey list’, but rather to improve the island’s reputation with the European Commission.