Chamber of Commerce welcomes changes to IIP scheme

The Malta Chamber of Commerce has welcomed proposed changes to the Individual Investor Programme (IIP), but has warned that it will artificially inflate rental prices.

In an announcement made yesterday evening, the government said that Malta’s cash for passports programme will end by September with a new residency programme that could lead to citizenship taking its place.

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.

In a statement on the changes, the Chamber referenced calls it had made in January about the need to seriously review the existing programme as saying that “in broad terms, the Chamber has always maintained that the economic developments in Malta had shown that there is undoubtedly an important economic need for inbound migration, more so for persons with special talents and world-class business management expertise and entrepreneurial abilities.”

Whilst acknowledging the “extensive” due diligence and quality management of the IIP programme, the Chamber suggested that there was a need for a clear distinction between the previous IIP scheme and the new programme. For this reason, the Chamber had argued that a temporary suspension of the programme was needed until the second version was up and running. This was adopted in the new government position.

“The Chamber appreciates that action has been taken with four successful applicants to the programme who have brought disrepute to the programme and consequently to the Maltese jurisdiction and are in the process of being stripped of their citizenship.”

One missed opportunity in the previous programme, said the Chamber, was the fact the country “did not fully tap into the wider opportunities most of these applicants could have brought in terms of potential investment or expertise to the local economy and social wealth.”

Despite the good intentions behind the objective to increase the rental value from the present €16,000 to €18,000 per annum, the Chamber said it believed that this will not serve to separate the rental market for IIP investors from that of the average wage earner who usually rents at the same value. “The Chamber believes that this will only serve to artificially inflate rents for the rest of the rental market and hence prejudice industry competitiveness. This will be a shame.”

Instead, the Chamber had suggested to remove the minimum rental value and replace it with a requirement for a property which is adequate and suitable for the IIP applicant and his/her dependants.

Expressing satisfaction at yesterday’s proposals the Chamber reiterated its commitment to working to improve the quality of local standards and “repair the damage to the Country’s reputation internationally by promoting ethics, professionalism and integrity with credibility.”