Citizenship by Investment in Malta
Malta Individual Investor Program (IIP) was announced in October 2013 and after some consultations with the European Commission was amended and then approved by the European Commission. Applications started to be accepted from the 1st of March, 2014. The program offers full citizenship in an EU country that is stable, neutral and highly respected. Malta gained independence from the United Kingdom in 1964 (now it is part of the Commonwealth of Nations) and became a republic in 1974. Malta was admitted to the United Nations in 1964 and to the European Union in 2004; in 2008 it became part of the Eurozone. Malta is also member of Schengen Agreement (since 2007). Citizenship obtained under the new program is a full citizenship for life and can be passed on to future generations by descent.
Key Benefits of Maltese (EU) Citizenship:
- Free travel, residence, and work within the EU (28 countries, including UK),
- All family members (spouse, children under 18 years, adult dependent children over 18 years and up to 25 years, and parents above 55 years old) can obtain Maltese citizenship together with the investor,
- No requirement to physically reside in Malta before the application or after obtaining the citizenship. No language test. The requirement to maintain 12 months of residency before naturalization is met by purchase or rent of property.
- Favorable tax regime. No taxation if the investor does not relocate to Malta and does not actually reside in Malta for more than 183 days per year.
- Dual citizenship is recognized. No need to renounce your previous citizenship before acquisition of Maltese citizenship.
Legal Basis for the Program
Malta Citizenship by Investment may be granted under an amendment passed in November 2013 to the Maltese Citizenship Act, Chapter 188 of the Laws of Malta. These amendments provided the framework for the enactment of LN 47 of 2014.
Eligibility for Maltese Citizenship by Investment
To qualify for Maltese citizenship main applicant must be at least 18 years of age and must be in good health. Main applicant and all family members must show they do not suffer from contagious diseases. Naturally, they must demonstrate a clean criminal record. Due diligence of the background will be thorough.
Financial Conditions of the Maltese Citizenship by Investment:
- Investor must maintain property and valid address in Malta. Applicants are required to make an investment in property of at least EUR 350,000 or enter a property rental contract for at least EUR 16,000 annually. This investment must be made before the approval of the applicant’s citizenship application.
- Investment in Bonds. Applicants are required to invest at least EUR 150,000 in bonds approved by the Maltese Government. Investment must be kept for at least five years. This investment must be made before the approval of the applicant’s citizenship application.
- Contribution to the National Development & Social Fund. To qualify for Maltese citizenship the main applicant is required to contribute at least EUR 650,000. Spouses and children are required to contribute EUR 25,000; unmarried children between 18 and 25 and dependent parents older than 55 years old must contribute EUR 50,000 each. This contribution is to be made after the approval of the applicant’s citizenship application.
Due Diligence Fees
Due diligence fees are as follows: EUR 7,500 for main applicant; EUR 5,000 for spouses, adult children and parents; EUR 3,000 for each child between 13 and 18 years old. Due diligence fees are non-refundable even in the case when citizenship application is not approved.
Physical Residence Requirement
The law does not specify the concrete minimal number of days applicants must spend in Malta before the citizenship is approved. At the same time it requires evidence of a genuine link with Malta which can be demonstrated by purchasing or renting property, opening bank account, visiting Malta, etc. Approved agents obtain advance written approval from the relevant Ministry (Identity Malta) of their clients’ proposed links. If the proposed link is not approved the clients will be asked to strengthen their case. Citizenship is granted after 12 months from effective date of commencement of the genuine link with Malta.
Grounds for Refusal of Citizenship Application
- Providing false information in the forms
- Having a criminal record or ongoing investigations
- Denied a visa to a country with which Malta has a visa-free entry
- Potential national security threat
- Likely to cause disrepute to Malta
Taxation of New Citizens
Maltese citizenship does not cause taxation. Taxation is based on domicile and actual residence. Residence for tax purposes is established by demonstrating an intention to reside in Malta more than 183 days annually.
Comparison with Other EU Countries
Citizenship by Investment program of Malta is currently one of the best in Europe. It requires from a qualified investor EUR 650,000 of donation and EUR 500,000 of investment totaling in EUR 1,150,000. The only another EU country that has a similar fast and direct citizenship by investment program is Cyprus but the minimum threshold in Cyprus is EUR 2,500,000 for collective investments and 5,000,000 EUR for other investment options. Other EU countries (like Slovakia and Austria), where it is also possible to apply for citizenship based on significant investments, cannot boast of programs with concrete eligibility criteria. Decisions on granting Slovak or Austrian citizenship to significant investors or philanthropists are made on case-by-case basis which makes the whole process risky because of involving subjective factor. To summarize, the application process in Malta is efficient and eligibility criteria are clear-cut. The outcome of the application depends mainly upon results of due diligence (background and source of funds).
It is announced that the application processing will take up to 18 months. Citizenship is granted to investors and their family members who hold resident status in Malta for a period of twelve months immediately preceding the day of issuing of the certificate of naturalization.
Providing of services regarding participation in Malta Individual Investor Program is subject to licensing. We can recommend you a reputable company in Malta that has status of approved agent and has a practical experience of assisting clients with citizenship applications. The level of legal fee will depend upon the family composition and will be discussed individually with interested investors. The services include full support with allocation of investment, purchase of property, and preparation of citizenship application and supporting documentation. After citizenship is granted Approved Agent shall assist with the process of obtaining a Maltese Passport for each person included into application.
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