The Government of Malta may stop issuing citizenship to investors if the European Parliament accepts the proposals from the report. We analyze the situation and give a forecast of what may await investors who want to obtain a Maltese passport.
Malta is the only EU country whose legislation allows investors to obtain citizenship on exceptional service. Outward investment helps the state to support the economy in a crisis.
Exceptional services are investments of €690,000 or more in the country's economy. But it is not enough to have the necessary amount - investors have to pass a strict due diligence check.
Why the European Parliament opposes Maltese citizenship by investment
The EU has always criticised the investment programmes and called on countries to abandon them. In October 2020, the European Parliament issued a formal notice of default to Malta and Cyprus under the principle of sincere cooperation.
In November 2020, Cyprus closed its programme and Malta amended its nationality law.
Malta has a new mechanism for granting citizenship – Naturalisation for Exceptional Services by Direct Investment.From November 2020, Malta will only grant citizenship to investors after 1 or 3 years after obtaining a residence permit.
Head of the Malta office, international and economic law associate
On 21 October 2021, the European Parliament published a report on EU investment programmes. This document is advisory in nature and is intended to help MEPs assess whether citizenship programmes comply with EU law.
The report looks at issues that the European Parliament believes violate EU law and the principles of fai ess, discrimination and sincere cooperation. There are also risks of poor investor vetting and of making citizenship and residence permits a marketable commodity.
Some 130,000 people have been granted a residence permit or citizenship by investments in the EU over the past 10 years, according to a report by the European Parliament. Countries with programmes have earned more than €21.8 billion.
What the European Parliament is proposing
The Research Unit of the European Parliament proposes changes to EU legislation. To close all investment immigration disputes, the Parliament recommends one option for the programmes:
- Phase out all investment programmes.
- Impose an additional tax on countries that grant citizenship and residence permits by investments. There are no specific tax proposals in the report, but the Maltese newspaper Times of Malta cites a rate of 15% per annum, citing a government source.
- Make countries accountable for programmes in the European Parliament to increase transparency.
- Add a minimum presence requirement for investors in the country to the terms of the programmes.
- Restrict investors' access to the EU.
Malta reacted to the European Parliament report: Alex Muscat, parliamentary secretary for citizenship, said that each state should regulate its own citizenship and taxation policy.
There is also a legal dispute between Malta and the European Commission over the granting of Maltese citizenship to investors. The Maltese government has twice given explanations, but the parties have not yet reached a solution.
We advise against postponing the decision to obtain Maltese citizenship. This may no longer be an option in the near future due to the requirements of the European Parliament.
Head of the Malta office, international and economic law associate
How to become a Maltese citizen in 2021
Becoming a Maltese citizen is only possible through naturalisation. One option is for Exceptional Services by Direct Investment. The investor first receives a residence permit and after a year or three years can apply for citizenship.
Investors undergo stringent due diligence and comply with the mandatory conditions of the Maltese citizenship law:
- Make a contribution to the economy of the country - from €600,000.
- Rent or buy real estate - from €16,000 or €700,000.
- Make a charitable donation to any non-governmental organisation in Malta - from €10,000.
Examples of investment property in Malta
Maltese citizens are entitled to live, work and do business in the European Union and travel visa-free to Schengen, the UK and the USA.
Immigrant Invest is a licensed agent who helps you obtain Maltese citizenship. If you wish to become a Maltese citizen, seek advice from the experts at Immigrant Invest.
