Functional address and a yacht club membership makes good IIP resident

Identity Malta chief executive officer says applicants for the IIP need not be physically present on the island for 365 days, but at least two visits to Malta have to be made.

A 12-month residence status that is meant to create a “genuine link” between the country and applicants for the €650,000 passport being sold under the Individual Investment Programme, will require at least wo visits to Malta rather than an effective, 365-day stay.

Identity Malta’s chief executive officer Jonathan Cardona said that applicants for the IIP – who must be resident in Malta for 12 months prior to being issued with a certificate of naturalisation – will not need to be physically present on the island throughout the entire period. 

“It doesn’t mean the person has to be present in Malta for 365 days, even due of the principle of free movement,” he said, adding that the applicant must make at the very least two visits to Malta.

That might be easily arranged for the global rich interested in acquiring a passport: one visit to Identity Malta’s offices to pay their €650,000 contribution, and another visit to take their oath of allegiance to become Maltese and EU citizens.

In between, one of the over 50 accredited agents for the IIP will handle the other requirements – purchasing a €350,000 property or arranging a €16,000 annual property rental, and the acquisition of €150,000 in financial bonds.

The onus of proving Maltese residence will be on the applicant, but Cardona offers insight on how residence is acquired: obtaining e-residence (a status common to all foreign residents in Malta) or enrolment in the Global Residence Programme, having a functional residence, as well as being the member of social clubs, philanthropic initiatives, engaging with professional bodies.

So for example, enrolling a family doctor, membership with a yacht club, or participating in philanthropic activities, will bolster candidates’ portfolios at proving a genuine link with the island.

“We’ll judge these proposals as as adequate or not, on a case-by-case basis,” Cardona told MaltaToday.

Interest in the IIP

Identity Malta has received 19 applications from individuals whom Cardona says have “huge business backgrounds” – people from India, a Palestinian living in the UK, China, Russia, America, and Canada. “They live across the globe but some of them intend bringing their family over to Malta to plant their roots here.”

Cardona says the European Commission’s main concern of Malta’s IIP was that the sale of citizenship would not turn into a “passport by mail order” programme.

“I think [Brussels] was misinformed about the programme. We showed them that we had been in contract with embassies all over Europe discussing our plans. All agreed that this was a sovereign matter. The EU wanted a genuine link, and we agreed,” he said.

Cardona says the government’s cap of 1,800 naturalised people through the IIP is still in force.

Once applicants deposit a non-refundable €10,000 the application process is kick-started and four tiers of due diligence come into play: basic checks by the approved agents; due diligence by financial regulator MFSA as well as the Lotteries and Gaming Authority; a risk assessment by Identity Malta; and a criminal background check. The process can take up to four months.

Identity Malta then issues a letter of approval ‘in principle’, and applicants must deposit the remaining €640,000 contribution within 25 days. They must also have their property element and €150,000 in government stocks in place, within four months.

Henley subsidiary

A Henley & Partners subsidiary – IIP Processing Ltd – is still occupying an office at the Mediterranean Conference Centre, adjacent to the offices of the government agency Identity Malta, which runs the Individual Investor Programme.

Henley & Partners were chosen as the IIP’s concessionaire in 2013 to act as the sole introducers of prospective applicants to purchase Maltese citizenship for €650,000.

Since then however, over 50 new accredited Maltese and foreign agents were allowed to promote the IIP along with Henley.

But the government is unwilling to publish the full details of a rental agreement for Henley’s subsidiary, IIP Processing, to occupy an office a few steps away from Identity Malta.

“This contract is of a private and commercial nature. Originally, IIP Processing was going to handle the risk assessment and part of the due diligence process for each applicant, and it had been decided to locate it in close proximity to Identity Malta,” Identity Malta’s chief executive officer Jonathan Cardona told MaltaToday.

Identity Malta has a rental agreement with MCC for its offices.

Now that the full processing and due diligence is the full responsibility of Identity Malta, IIP Processing’s role is “primarily of an accounting nature”, Cardona said – namely reconciling the accounts between Identity Malta and Henley & Partners.

But Cardona also said that Henley, although still the IIP’s concessionaires, “are on the same footing as approved agents”, who can now introduce applicants to the IIP and carry initial due diligence checks. Henley is now “first among equals”, in the words of Cardona, with approved agents working in parallel to Henley.