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December 18, 2020

Malta’s Investment Migration Industry: The importance of maintaining high standards

The investment migration industry has always been under scrutiny for a number of different reasons and, despite the fact that the number of countries implementing such regulations is constantly increasing, controversy will remain. The important thing for a country like Malta, is to be able to attract the right number and quality of investors to the island. Thorough due diligence processes and transparency are key to ensuring that standards are kept high.

Malta has recently published new regulations in relation to the granting of citizenship for exceptional services by direct investment. Apart from these regulations, Malta has also made a number of key introductions:

Firstly, a new Agency (Komunita' Malta) has been established which will be responsible to administer and process all citizenship applications in Malta, not just the ones relating to exceptional services by investment, but also citizenship by descent, by naturalisation through long term residence and through exceptional services by merit.

New regulations have also been published in relation to licensing of agents. Agents who were previously licensed under the IIP have 3 months from the publication of these regulations to obtain a new license. Agents have now been limited to the following four categories; lawyers, accountants, auditors and financial advisors licensed by the MFSA. Here too, the idea is to continue to raise the standards of the Maltese investment migration industry since agents play a vital role in the quality of investors which are attracted to the island. Agents will also be subject to a strict code of conduct, which has also been published with the regulations and which sets clear parameters, from marketing to the approval of sub-agents and expected application standards.

The new regulations require applicants to be resident in Malta for a period of not less than 36 months, or 12 months, by exception, through a higher investment. The requirement to either purchase property (for not less than €700,000) or lease (for not less than a minimum annual lease of €16,000) has remained, with an increase in the minimum values required. The non-refundable deposit which is paid to the Agency is of €600,000, or if an application for citizenship will be made before 36 months but after 12 months of being a resident in Malta, this must be increased to €750,000. The investment in government bonds is no longer applicable, whilst a donation of €10,000 to a registered philanthropic, cultural, sport, scientific, animal welfare or artistic NGO or society, has been introduced. The age of a child dependant has been increased to persons who have not reached the age of 29, and the child must not be married and is wholly maintained or otherwise largely supported by the main applicant.

The number of successful applicants is limited to 1,500 families in total and a maximum of 400 every calendar year.

Whilst Malta's investment migration industry has always demanded high standards, which also resulted in a high number of applications being refused, the above changes are definitely a step in the right direction and will ensure that these new regulations are not just a tool to increase government revenue but continue to attract the right quality of investors to the island.

This was authored by Nicky Gouder and was first published on PCD Club.

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