Maltese passport sales to rich foreigners net over €277 million in one year

Citizenship experts Henley have pocketed €19 million from cut on each Maltese passport sold since start of the Individual Investor Programme in 2014

Passport kings: Henley supremoes Eric Major (left) with Christian Kalin (right) and Prime Minister Joseph Muscat (centre)
Passport kings: Henley supremoes Eric Major (left) with Christian Kalin (right) and Prime Minister Joseph Muscat (centre)

A total of €194 million was distributed from Malta’s sale of passports to the country’s national posterity fund, in the 12 months between July 2016 and June 2017.

A further €83.3 million were passed directly into the consolidated fund, which directly funds government spending.

The figures were published as part of the fourth annual report by the regulator of the Individual Investment Programme, the sale of Maltese citizenship to the global rich.

The passports are sold for €650,000 to main applicants, who must also spend some €350,000 in property and a further €150,000 in financial instruments.

The year’s “takings” also generated revenues of €16.4 million for Identity Malta, the agency that runs the IIP, and €13.2 million for Henley & Partners, the so called ‘concessionaire’ that designed the programme in the first place and takes a 4% cut on all successful IIP applications.

That means that since the launch of the IIP up until June 2017, a total of €249 million passed into the National Development and Social Fund, while just over €106 million was passed into the consolidated fund. Henley pocketed €19 million in revenues since the programme was introduced in early 2014.

A further €110 million is still awaiting distribution and is held in a suspense account.

Since 2013, there have been 566 successful main applicants. Considering that the number of successful main applicants, excluding dependents, cannot exceed 1,800 for the whole duration of the IIP, the figure constitutes 31.4% of the indicated target.

As in previous years, the largest number of main applicants originated from Europe, followed by Asia and the Middle East.

The 386 applications received over 2016-2017 included a total of 1,409 persons. Apart from the 386 main applicants there were 294 spouses, 487 minor dependants and 242 adult dependants, meaning that each application contained an average of three dependants.

IIP applicants must also acquire a property having a minimum value of €350,000 or take one on lease for a minimum annual rent of €16,000. Similar to the 2015-2016 period, the vast majority of property, 88%, was leased whereas the remaining 12% was purchased – an increase of 8 percentage points.

The most popular locality for purchased properties was St Julian’s, closely followed by Sliema. This region of localities, together with Swieqi, held 78% of properties acquired by IIP applicants.

Property leasing was spread over 30 different localities. Sliema saw an overwhelming 38% of properties being leased. 4% of the properties were leased in Gozo.

The value of the 46 purchased properties amounted to €35.2 million, an average of €767,000 per property. Globally the value of all purchased property (82) totals €71 million.

In the case of leased property the rental value for the duration of the five-year contract is projected to be €33.6 million, or €99,000 per contract. Globally all 484 leased properties would add up to €51 million, averaging €105,642 per leased property.

The amount invested in stocks between 2016-2017 totalled €58.3 million. The global figure for all IIP applicants now amounts to €85.8 million.