Passport-for-cash programme will be shut down, replaced by new residency programme

Parliamentary Secretary Alex Muscat says the Individual Investor Programme will end in September irrespective of whether the 1,800 capping is reached or not • New residency programme to take its place

Wealthy foreigners wanting to become Maltese citizens will first have to obtain residency and can only apply for citizenship after a minimum of one year
Wealthy foreigners wanting to become Maltese citizens will first have to obtain residency and can only apply for citizenship after a minimum of one year

Malta’s passport-for-cash programme will end by September with a new residency programme that could lead to citizenship taking its place, the government said.

Under the new regime, a foreigner would have to first apply for a residency permit and only be able to apply for citizenship after one year.

Parliamentary Secretary Alex Muscat said the new system was being implemented primarily to placate concerns raised by the European Commission over the past years.

The new system includes higher investment requirements, an increase in the value of property that is to be purchased or rented by the applicant and a mandatory €10,000 donation to a registered philanthropic organisation.

“The new system is similar to many others present in EU countries and although the changes mean that we are more expensive than most, Malta’s reputation is at stake and we cannot afford slip ups,” Muscat said at a press briefing on Friday afternoon.

He ruled out that the changes were linked to the Moneyval assessment expected in October, adding the Council of Europe body did not have a problem with the Individual Investor Programme.

“The changes are being done to address the criticism that the country received because of the IIP programme and to maintain good relations with the European Commission, even though citizenship remains a national competence,” Muscat said.

The new programme has no specific name but offers two roads to citizenship through residency. Before even applying for citizenship, the applicant will have to pass a due diligence test, which is different from the current programme where the checking process is done after the application is filed.

400 per year cap

A person applying for citizenship after one-year residency will have to pay €750,000, while someone applying for citizenship after three years of residency will have to pay €600,000.

Applicants will also have to pay an additional €50,000 for each dependent.

The money distribution will remain, 30% to the government’s consolidated fund and 70% to the National Development and Social Fund.

The minimum value of property purchased is increasing to €700,000 from €350,000, and the minimum annual rent is increasing to €18,000 from €16,000.

Muscat said the number of applicants who can acquire citizenship through the residency route will be capped at 400 per year for a total maximum of 1,500.

There will be no change in the manner by which names of people acquiring citizenship will be published. The names of new citizens acquiring a Maltese passport through the residency scheme will be published along with those of others acquiring citizenship through marriage or naturalisation.

He said the IIP programme will be terminated at the end of September irrespective of whether the 1,800 cap is reached or not. The IIP agency handling the process will also be shut down and a new agency will handle all citizenship routes, including the traditional ones involving marriage and naturalisation.

“The IIP programme has attracted almost 1,500 applicants so far and yielded more than €1 billion for the economy but irrespective of whether the cap of 1,800 is reached or not it will be shut by the end of September,” Muscat said.

Four 'rotten apples' through IIP

He said that from all IIP applicants so far, only four families turned out to be “rotten apples” and while two have been deprived of citizenship, the process is underway to withdraw citizenship to the other two.

Asked what the future of concessionaire Henley and Partners will be in the new residency programme, Muscat said discussions were underway.

He acknowledged that the new programme was different from the changes that were being contemplated to the IIP back in November last year.

The new changes have received Cabinet backing and Muscat hopes the relative laws will be passed in parliament before the summer recess.