Malta Citizenship by Investment

2014 Individual Investor Programme of Malta

Dr. Antoine Saliba Haig co-authored with Dr Priscilla Mifsud Parker | 25 Jan 2015

The Malta Residence  Citizenship Programmes  A comparison

The 2014 Malta Citizenship by Investment Programme is the first EU-approved citizenship Programme to be launched in Malta allowing foreign nationals legally resident in Malta for at least 12 months and who make a significant contribution to Malta to apply for Maltese citizenship.  It offers a second citizenship option to families wishing to relocate their personal or business affairs to an EU country.  Citizenship granted through this route to Maltese citizenship is valid for life and it is passed on to future generations by descent.

Being one of the thriving economies in the European Union, the Republic of Malta enjoys a stable political climate and a bi-partisan political scene which is largely convergent on issues of national and economic importance. Together with Germany, Malta has weathered the financial crisis and maintained economic growth during this challenging time.

The country has been a member of the European Union since 2004 and is part of Schengen since 2007. Maltese citizenship grants access to all investment opportunities in Malta and throughout the European Union. As at June 2018, the number of applicants in the Maltese citizenship programme was just over 1,431, out of the cap of 1800 applications in place for the whole programme.

Malta Citizenship by Investment

 


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. The Malta Individual Investor Programme (MIIP) rules provide for affluent persons of impeccable standing and repute to be naturalised and to receive Maltese citizenship on the basis of a contribution to and investment in Malta. Legal Basis for Malta Citizenship by Investment.

 

Benefits of Malta Citizenship by Investment Programme

  • Maltese citizens enjoy significant mobility, with over 180 visa-free destinations, including EU, USA, Canada.
  • Maltese citizens have the right to settle, live, work, study, retire in any of the 28 EU countries, Norway, Iceland, Switzerland & Liechtenstein.
  • Family eligibility includes parents of main applicant and spouse, minor children, unmarried dependent adult children under 27. Descendants automatically entitled to citizenship thereafter.
  • Malta is a neutral, safe and stable country with a friendly people living a European lifestyle but with a Mediterranean quality of life.
  • Citizenship approved after a strict due diligence and processing time of 4-6 months.
  • Applicant investors receive residence permit enjoying Schengen mobility for 18 months while they await the outcome of their application, leading to Maltese citizenship.

 

 

Eligibility for Malta Citizenship by Investment

 

Malta Citizenship by Investment

 

To qualify under the regulations, the Main Applicant for Malta Citizenship by Investment must be at least 18 years of age and must meet the due diligence and residence requirements outlined in this factsheet.

The main applicant may also add dependents to a citizenship application his/her spouse, children and parents or grandparents, under certain conditions, to benefit under the Malta Citizenship by Investment Programme.

Beneficiaries under the Global Residence Programme may also additionally apply for citizenship under this Programme.

Good Health

Applicants must show they do not suffer from a contagious disease and that they do not carry a disease requiring treatment that could impose a burden on the Maltese health system.

Contribution to the National Development & Social Fund

To qualify for Malta Citizenship by Investment, the main applicant is required to contribute at least € 650,000 to Malta. Of this contribution, 70 percent will go into the Fund set up by the Government of Malta and run by a board of trustees. The rest goes to the consolidated fund. Spouses and children are required to contribute €25,000; unmarried children between 18 and 25 and dependent parents must contribute €50,000 each.

This contribution and the investments below need only be made AFTER approval of the applicants' citizenship petition.

'Fit and proper' Test

Applicants must show they are in good standing and repute and will undergo a 'fit and proper' test. The Government of Malta is committed to the highest standard of due diligence to ensure only deserving and reputable applicants are allowed to proceed for the grant of Maltese citizenship.

A four-tier due diligence process is carried out directly by the Government that will assess applicants and will process and approve applications at various stages.

Applicants must demonstrate a clean criminal record, with checks being conducted with the International Criminal Court, INTERPOL and various other authorities and sources. Applicants must provide a police certificate which may be submitted subsequently to the submission of the application but at all times prior to approval.

Property Purchase or Rental

Applicants are required to make an investment in property of at least €350,000 or enter a property rental contract for at least €16,000 p.a. both on five-year contracts.

Investment in Bonds/Shares

Applicants are required to invest at least €150,000 in bonds or shares from time to time approved by the Maltese Government to be kept for at least five years. This investment will need to be made in stocks sanctioned by the government as beneficial to the Island. We are able to assist clients with the acquisition of approved collective investment schemes that invest only in Government Bonds.

Residence Status

The residence requirement requires evidence of the investor's activities in Malta.  Our lawyers advise extensively on meeting the requirements of the programme.  Approved Agents obtain advance written approval from Identity Malta of their clients' proposed links. Citizenship is granted after 12 months from effective date of commencement of the residence in Malta.  Candidates must commit to a minimum physical presence in Malta before citizenship is granted. Persons already resident one year prior to IIP approval already satisfy this requirement.

 

 

Legal Basis

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. The Malta Individual Investor Programme (MIIP) rules provide for affluent persons of impeccable standing and repute to be naturalised and to receive Maltese citizenship on the basis of a contribution to and investment in Malta. Legal Basis for Malta Citizenship by Investment

Taxation of New Citizens

The basis for taxation under the Maltese tax system is based on domicile and residency - not citizenship. The grant of Maltese citizenship to a non-domiciliary of Malta does not of itself, cause the beneficiary to acquire a new domicile of choice in Malta. Residence for tax purposes is established by demonstrating an intention to reside in Malta indefinitely and definitely on the basis of a day count of 183 days.

Tax residents of Malta who are not domiciled in Malta are taxable on a remittance basis. Accordingly, non-doms who are not resident in Malta are not taxable on foreign source income not received in Malta, nor on any capital gains arising outside Malta whether remitted or not. Tax is due only on a sources basis on income and capital gains arising in Malta. A non-resident citizen of Malta is only taxable in Malta on Malta source income.

Sale of Property

After the lapse of the obligatory 5 year period, property in Malta can be sold completely exempt from tax if such property is held for a period of 3 years as the resident's sole and ordinary residence. If sold before the lapse of 3 years, a final property tax of 12% is chargeable on the selling price.

Other Tax Considerations

  • No inheritance or death taxes
  • No estate duty
  • No net worth or wealth taxes
  • No municipal taxes, rates or real estate taxes

 

 

Malta Citizenship Application Process

Application Time Frames & Payments

1. Apply for Residence: applicants who are not already resident in Malta are advised to start the process of residency to set the clock ticking on the 1 year residency requirement. A deposit of only €5,000 is required at this stage on account of the €650K contribution: this covers the main applicant. Additionally, a fee of €1,000 is payable per dependent.
2. Day 0: Formal Application by Accredited Person: An application is formally submitted to Identity Malta with the essential supporting documents. Payments due now include the due diligence fees, passport fees and a deposit of €10,000 on account of the €650K contribution, less any payments made on applying for residency. Evidence of source of funds to be presented.
3. Day 90: Identity Malta confirms if documentation submitted is formally in order, subject to a further month of further verifications.
4. Day 120: In Principle Approval: This is the approval of the process conditional only to the fulfilment of the obligations undertaken under the IIP.
5. Day 125: Formal Request for Contribution: Identity Malta requests payment of remaining balance on contribution.
6. Day 145: Deadline for paying balance on contribution.
7. Day 240: Final Compliance: Provide evidence of Property Purchase / Rental & €150K investment.
8. Day 183; Issue of Certificate of Naturalisation (maximum time to issue: 2 years). Subject to: Oath of Allegiance, 1 Year residence.
Malta Citizenship by Investment Timeline

Grounds for Refusal of Malta Citizenship by Investment

Identity Malta will regard all applications on a case by case basis and may be satisfied that the applicant is still worthy of being considered for approval notwithstanding the presence of any of the grounds listed below, due to special circumstances. In the case of approval, Identity Malta must provide reasoned opinion why the applicant should still be considered for approval and should refer the case to the Minister who has sole authority to approve.

  • Likely to cause disrepute to Malta
  • Denied a visa to a country
  • Providing false information
  • Having a criminal record or being subject of a criminal record
  • Potential national security threat

Grounds for Revocation of Malta Citizenship by Investment

The revocation ("deprivation") from Maltese citizenship is well regulated and is governed by the Maltese Citizenship Act. Legitimate grounds for deprivation of citizenship would be that:

  • citizenship was acquired by means of fraud, false representation or the concealment of any material fact or
  • such citizen had engaged, unlawfully traded or communicated with an enemy or been engaged in or associated with any business that was motivated by willingness to assist an enemy in that war.
  • such citizen has shown himself or herself by act or speech to be disloyal or disaffected towards the President or the Government of Malta.

Various authorities on constitutional law have expressed their position on this subject, largely to the effect that it would be contrary to fundamental human rights for any government to issue a blanket revocation of citizenship based on its grant under the Individual Investor Programme.

 

 

Our Citizenship Services

We offer the following services in relationship to Malta Citizenship by Investment:

  • advising you on your eligibility and your chances of success before filing your application;
  • providing you with pre-immigration legal and tax advice;
  • guiding you with the preparation and forwarding of the necessary documentation;
  • vetting and preparing all supporting documentation for submission;
  • assisting you with the purchase / rental of property in Malta including applications for AIP permits (foreigners need AIP permit to purchase property in Malta), reviews of your contract, liaising with the notary.  Applications for Maltese Citizenship by Investment are to be made to and processed wholly by Identity Malta. Applicants must be represented by an Accredited Person that is a licensed Maltese Authorised Registered Mandatory (ARM).

More info about our Malta Citizenship Applications service:

Official Quality Endorsement

In recognition of the firm's impeccable track record representing thousands of high net worth individuals and families obtain Maltese Citizenship and Residency over the years, the firm was the first to be promoted by Identity Malta from Accredited Person status to Approved Agent status.. The firm maintains a high success rate through the thorough examination of applicants before submissions so that any challenges to eligibility can be identified and addressed appropriately. The firm boasts two partners specialising in Malta Citizenship by Investment and a dedicated team of immigration lawyers specialising in citizenship and residence by investment..

Malta Citizenship Video References:


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