Opposition question Henley's 4% commission when their 'workload has been reduced'

The Opposition questioned why Henley and Partners, the concessionaries of Malta’s ‘golden passport’ scheme, will still earn 4% in commission from every successful citizenship applicant when its workload has been effectively reduced.

According to the original contract between Henley and the government, Henley were rendered the exclusive administrators of the Individual Investment Partnership Scheme. However, following an uproar by local agents, the government signed a second contract with Henley that removed its exclusivity clause and allowed local agents to also sell the scheme. The agents have to be licensed by Identity Malta, a government agency created after the programme’s revamp who are now also responsible for running the scheme.

Earlier this year, the government published the contract and its subsequent amendment, but with 14 clauses- out of a total of 206- blacked out.

Speaking as a witness in the Public Accounts Committee that is scrutinizing the Henley contract, Justice Minister Owen Bonnici confirmed that Henley will still earn 4% in commission for every successful applicant as per the original contract. The 4% commission will be notched up to 5% if 1,800 people successfully apply for the programme.

He added that the 4% will be calculated not only on the €650,000 cost per application, but on ‘some of the other contributions’ that potential citizens would have to make. According to the contract, applicants must buy a house for €350,000 or rent it for five years at an annual €16,000 rent. They must also invest in stocks, bonds or special purpose vehicles identified by Identity Malta for a minimum value of €150,000. When questioned by Opposition MPs, Bonnici refused to expound on which of these other contributions will be taken into account when calculating the 4%.

However, Opposition MPs Mario de Marco, Tonio Fenech, Claudio Grech questioned why Henley’s commission has remained the same, when their workload has been effectively been lowered, with a lot of their original administrative burden now falling on Identity Malta’s shoulders.

Bonnici retorted that the second contract rendered Henley financially worse off than the first one had, as applicants no longer have to pass through them, but through other recognized agents.

“On the ground, the situation is moving so that Henley gives away as much room as possible to Maltese legal practitioners,” Bonnici said. “If 1,800 people successfully apply for citizenship through this scheme, Malta will earn €1.4 billion.”