Malta is set to launch a revamped Malta Individual Investor Program with significant changes from September 2020.
Major changes include higher real-estate investment, two contribution option, and a mandatory charitable contribution.
Two Minimum Contribution Options
Taking a leaf out of the UK’s Tier 1 Investor Visa, the revamped Individual Investor Program offers a faster route to citizenship provided investment immigrants are ready to pay more.
The new IIP will have two options to contribute to the National Development and Social Fund.
National Development and Social Fund Investment Options
|Minimum Contribution||Minimum Residence in Malta|
The requirement of residence in Malta is not new. The existing IIP requires 12 months of residence as a requirement to qualify for citizenship. However, this rule is not strictly enforced and applicants’ presence in the country is not monitored.
Further, the minimum 12-month residence period begins upon submission of the IIP application, which means the processing period is considered when calculating the period of residence in Malta.
This is unlikely to continue in the new program since an investor choosing the lower contribution will have to live in Malta for three years before qualifying for a Maltese passport. So, even those contributing more may face stricter scrutiny of whether they were actually present in the country.
Double the Investment in Real Estate
The existing IIP requires the investor to either buy a property for €350,000 or lease a residence for annual rent of at least €16,000.
This is set to increase to €700,000 and €18,000 respectively.
This represents a sizable increase in minimum investment even for those choosing the €600,000 contribution option.
Mandatory Charitable Contribution
Once the revamped IIP comes into force, applicants will also have to donate at least €10,000 to charity to qualify under the program.
The Malta Individual Investor Program Agency will be replaced by a new agency that will regulate and supervise all citizenship applications in Malta, including those made through the IIP.
The new program will have an annual cap of 400 applications and an overall cap of 1,500 applications.
Implications for Investment Immigrants
A quick comparison of the existing and revamped IIP shows a significant increase in the cost of fast-track acquisition of the Maltese passport.
Before and After: Malta IIP Changes
|Existing IIP||Revamped IIP|
|Real Estate Investment||€350,000||€700,000|
|Real Estate Lease||€16,000 per year||€18,000 per year|
|Investment in stocks/bonds/other investment vehicles||€150,000||€150,000
Expected to be removed but not announced yet
The big question is whether Malta will strictly impose the physical-residence requirement. Lax enforcement of this rule has been one big reason why CIPs offered by Malta and Cyprus were repeatedly criticized by the European Parliament and other agencies and authorities.
Going ahead, investors must be prepared to pay more, face stricter due diligence, and spend more time living in Malta to acquire EU citizenship.General Information: Contact us to receive more information about this article.
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