As published on independent.com.mt, Monday 18 January, 2021.
Malta’s residency programme is being revamped, and the fees that have to be paid by beneficiaries are being more than doubled, Parliamentary Secretary Alex Muscat said on Monday.
The new programme will be called Malta Permanent Residence Programme (MPRP). It is an updated version of the Malta Residency Visa Programme (MRVP), which was operated between 2017 and 2019. The MPRP is distinct from Malta’s citizenship-by-investment programme.
Muscat said the amendments to the residency programme seek to attract more investment to Malta. It is linked to the purchasing or renting of property in Malta, but beneficiaries must make substantial payments, which will now go directly to government coffers.
Around 20 European countries operate similar schemes.
The main reasons why third country nationals seek residency in Malta and elsewhere is usually due to economic or political upheaval in their home country, or to seek better living, working and education opportunities. Many of the beneficiaries of the previous scheme were Chinese.
MPRP gives beneficiaries permanent residency rights, and are entitled to reside, settle or stay indefinitely in Malta with their registered dependents. They also benefit from movement across the Schengen area for 90 days out of 180.
There will be a slight increase in the property price. Beneficiaries must rent a property for a minimum of €10,000 in the south of Malta or Gozo, or €12,000 in the rest of Malta.
If they choose to purchase a property, they have to buy a property worth at least €300,000 in the south or in Gozo, or a minimum of €350,000 in the rest of the country.
All beneficiaries need to pay an administrative fee of €40,000, with €10,000 being payable upon application. The remainder can be paid over a period of two months within receiving the letter of approval.
The personal contribution is also being increased. Those who rent a property now have to pay €58,000, while those who buy a property need to pay €28,000.
When added to the €40,000 administrative fee, this adds up to €98,000 for those who rent, and €68,000 for those who purchase property. The amounts are effectively being more than doubled from the old scheme. Currently, beneficiaries have to pay €30,000.
In order to be eligible, applicants must be in receipt of stable and regular resources sufficient to maintain themselves; be in possession of a valid travel document, have health insurance, have assets of no less than €500,000, with at least €150,000 being financial assets.
The fee for dependents is also being increased to €7,500 per additional dependent.
Applications must be submitted via an accredited agent.
Investment will now go directly towards the government’s consolidated fund, with investment in stocks and bonds removed.
The agency leading the programme – the Malta Residency Visa Agency – will be investing a portion of the funds directly into Corporate Social Responsibility (CSR) projects. Applicants will also be required to give an additional €2,000 donation to a charity or NGO.
The amendments will be moved for the first reading in Parliament on Monday and a debate will be held in the coming weeks.
During a press briefing, it was explained that the previous programme generated a one-off injection of financial capital of just under €50 million. The effect of consumption expenditure by beneficiaries in the economy generated over €17 million in 2019 alone.
The programme directly created 136 jobs, mainly in the financial services and ICT sectors.
The contribution to the Government’s Consolidated Fund was over €24 million.
2,542 applications have been received to date. 70% were approved and 10% were rejected. Around 2% of applications were withdrawn. The remaining applications are being processed.
12% of beneficiaries chose to buy property, while 88% chose to rent. The new scheme makes it more attractive to buy, rather than rent. The average investment in purchased property was €510,144. The average amount paid in rent annually was €14,400.
Applications take between 4 and 6 months to be processed.
Applicants need to have a clean criminal record and cannot have any pending charges related to terrorism, money laundering, war crimes and others. All approved applications are subject to ongoing monitoring and a “rigorous” four-tier due diligence process is carried out on receipt of applications.
The other countries in Europe with similar programmes are: Portugal, Spain, Hungary, Bulgaria, Cyprus, Austria, Latvia, Greece, Ireland, Belgium, Andorra, the United Kingdom, France, Italy, Jersey, the Isle of Man, Luxembourg, Monaco and the Netherlands.
It is so far unclear whether the European Commission will have any issues with the programme. Last year, the Commission warned it could take action against Malta and other countries over their passport sale schemes. Muscat said the EC letter also seemed to include residency schemes. The Maltese government has told the Commission that it will not cede its citizenship rights, which fall under national competence.
Asked if any future court action could hinder the residency programme, Muscat said it depends on a number of factors. This includes whether the EC actually takes Malta to court, and whether, if that is the case, it sues the country only on its citizenship scheme or also on its residency programme.
There have been no updates since the government wrote to the EC towards the end of last year.
Muscat explained that the citizenship programme is already operating and there is “significant” interest. No applications have been approved so far since the new programme requires a minimum of one-year residency in Malta before becoming eligible.