Got Dh2 million? Best European country to 'buy' citizenship

Malta’s Individual Investor Programme (IIP) has been ranked as the best citizenship-by-investment programme in the world by a residency and citizenship planning firm.

Although it comes at a price, the country offers a reliable route towards citizenship in the European country, says a report by Henley & Partners.

A citizenship-by-investment programme is an immigration option where a passport in a foreign country can be obtained in return for an investment made in the local economy.

Wealthy investors who could benefit from a second or new passport are drawn to such programmes, which offer a business opportunity and a chance to start a new life at the same time.

In the case of Malta, 30-40 per cent of the total programme applicants are from the Middle East, noted Henley and Partners.

The citizenship and residency planning consultancy compared the Malta programme with the programmes of Cyprus, Austria, Antigua and Barbuda, St. Kitts and Nevis, Grenada, and Dominica and ranked it according to reputation, quality of life, visa-free access, processing time, compliance, investment requirements, residence requirements, relocation flexibility, physical visits required and transparency.

The Malta programme was launched early 2014. After a series of changes it finally presented its proposition to the world; for an investment amount of €500,000 (Dh2 million) and a lump sum of €650,000 the Maltese citizenship could be obtained.

Ever since, more than €1bn has been committed to the island nation through the programme and more than 700 applications were received, said Henley and Partners, noting that these numbers indicate the great success.

What's the deal?

The basic requirements of the programme are two-fold; the applicant is required to make a financial contribution to the country, and hold a Maltese resident status for a period of 12 months.

The financial contribution consists of three parts. A one-time lump sum contribution of €650,000 to the Maltese government must be made.

In addition, an investment in bonds or shares in Malta of at least €150,000 must be made, and these bonds or shares must be kept for at least five years. The investment must be sanctioned by the Maltese government.

Finally, a property rental contract of at least €16,000 per year for a five-year period must be signed, or an investment in property of at least €350,000 must be made.

Apart from these large amounts, there are smaller amounts to be paid in fees, and for spouse and dependents who wish to obtain citizenship.

Spouse is charged €25,000, while dependent children and parents may obtain citizenship for the financial contribution of €50,000.

The residency requirement may seem to be a bit of an obstacle to applicants, as there are many programmes in the world where no physical presence in the country is required.

However, it is less burdensome than it seems, explained Yann Mzarek, Managing Partner of the Law Firm M / Advocates of Law earlier.

"Residency status can be obtained when signing a tenancy contract, and does not require the physical presence of the applicant," he pointed out.

Further, the actual waiting time does not have to be 12 months, he explained.

The entire procedure of application for the Maltese citizenship takes 15-18 months to complete. This procedure entails the initial submission, the screening of the applicant by the Maltese government, the submission of the plan of undertaking, and the carrying out of the investment, Yann elaborated.

“However, the citizenship status can be obtained 12 months after obtaining the residency status, and therefore it is wise to acquire residency right from the beginning. Once the procedure has been completed, the applicant will only need to wait for a few more months.

What's the catch?

According to Henley and Partners the investment in Malta is a good deal.

“The real estate sector has shown a steady growth of 5 per cent annually in the past years,” pointed out Marco Gantenbein, Managing Partner at Henley & Partners.

“The property market is buoyant with good quality property being in high demand and short supply so prices are increasing. All the current signs suggest that property investment in Malta will continue to provide a return of around 5 per cent per annum over the coming years.

“The level of interest remains strong and the programme continues to see a high demand from the Mena region. We are pleased to see that many of the early applicants are now starting to make ancillary investments, outside of the IIP, within the country. This will lead to further increased inward investment and the future creation of employment in Malta.”

A Maltese passport holder – as well as residency status holder – is permitted visa-free travel to more than 100 countries, and free access to all Schengen countries.

The island was named one of the world’s top 10 retirement destinations in 2015. It was placed seventh in internationalliving.com’s Annual Global Retirement Index due to its warm weather and low crime rate.

Residents of Malta who are not domiciled in Malta are taxable on a remittance basis only, and no wealth, inheritance, or gift taxes exist.

(Image via Shutterstock)

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