Malta is seeking to build on impressive numbers including €50 million capital in two years, 136 jobs, and the attraction of human capital worth €6 million with its revamped Malta Permanent Residence Program.
Malta’s citizenship by investment program — the Individual Investor Program — may dominate headlines but the country’s permanent residence by investment program also has an impressive record of attracting foreign investment.
Introduced in 2016, the Malta Residency Visa Program (MRVP) creates jobs and attracts financial and human capital to Malta, including during the pandemic-hit year of 2020.
Strong Numbers for the MRVP
An economic impact study done prior to the program’s renewal threw up important details of the program’s impact on the Maltese economy.
Between 2017 and 2019, the program attracted foreign financial capital of around €30 million with an additional €19 million inflow in 2020.
Boost to consumption expenditure due to this program is estimated at €18 million for 2019 with an additional €18 million estimated in direct and indirect value addition.
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The study estimates that the program contributed around €6 million to Malta’s human capital and knowledge economy and created 136 jobs in the country. Finance and Information and Communications Technology were the primary sectors that saw job creation.
Real estate investment is a mandatory requirement under the MRVP. However, with close to 90 percent of all MRVP applicants choosing to rent properties, the overall impact of the program on Malta’s booming real estate sector has been negligible.
Revamped MRVP is now Malta Permanent Residence Program
Under the previous program, an investor had to fulfill the following requirements to qualify for permanent residence in Malta.
- €250,000 investment in bonds or listed equities for a period of five years.
- Property purchase of €320,000 or lease of €12,000 per annum.
- A non-refundable government contribution of €30,000.
Investment requirements under the revamped program are:
- Property purchase of €350,000 or lease of €12,000 per annum.
- Non-refundable government contribution of €28,000 for those buying property and €58,000 for those choosing to lease property in Malta.
- An administrative fee of €40,000.
- €2,000 contribution to charity to a local NGO registered on Malta
Further, applicants must own assets worth at least ₹500,000 out of which at least €150,000 must be held in the form of securities.
Removal of the €250,000 bonds investment requirement has reduced the overall cost of the program. However, the investor could recover this after a holding period of five years. So, while the absolute investment figure has come down, the program has actually become more expensive since the applicant cannot recover the property lease costs or the government or charitable contribution.
The MPRP has a four-tier due diligence process with rigorous checks on source of wealth and funds owned by the applicant and his/he family members.
Malta’s new citizenship by investment program attaches a lot of importance to physical presence before an investor can qualify for the EU citizenship. Considering this, investors may look to the significantly-cheaper permanent residence by investment program to qualify for citizenship of Malta and the EU in the long run.