Revamped citizenship scheme will require €1.15 million investment per applicant
The controversial Individual Investor Programme requirements changed, up from €650,000 to €1.15 million.
23 December 2013, 12:00am
Jurgen Balzan
Jurgen Balzan
3 min read
A revamped citizenship scheme will require wealthy foreigners to invest at least €1.15 million in order to obtain a Maltese passport. Applicants must also invest in property and government bonds and shares before being granted citizenship.
Moreover, the the scheme will no longer be led by the private company Henley and Partners whose contract will be revised. The programme will be capped at 1,800 successful applications and once this number is reached, the programme will be cancelled.
Addressing a press conference this evening, prime minister Joseph Muscat said "This Government is not proud, it listens and we have talked to all stakeholders. We also listened to the people's concerns."
The scheme will now be led by the governmental agency Identity Malta while the National Development Fund will be overseen by a board of independent trustees.
Asked why the talks with the opposition failed, Muscat said that the main bone of contention was whether citizenship should be granted after a five year residency period or upon the contractual requirements announced tonight.
"I shoulder full responsibility and I admit that things could have been done better. However, we have changed the programme and we have addressed the concerns and the shortcomings in the original programme," Muscat said when asked why the changes were not introduced before the law was approved by Parliament.
Following weeks of negotiations between government and the opposition, the controversial scheme's requirements were changed from the previous €650,000 donation set by government in its initial plans.
"We came to an agreement with all stakeholders, however unfortunately we did not reach an agreement with the opposition, despite coming very close."
He said the governments position changed drastically and was now presenting "a new programme." This he said would make the programme mire attractive and the country will reap more benefits.
The scheme which was put on hold despite being approved by parliament will now require applicants to pay €650,000 which will go to the National Economic and Social Development and the consolidated fund, purchase a property of at least €350,000 and invest at least €150,000 in government issued bonds or shares.
Applicants will also have an option to rent a property for €16,000 a year. In both cases applicants will be contractually bound to keep the property for at least five years, otherwise the citizenship would be revoked.
70% of the €650,000 payment will go into the national fund styled upon the Norwegian sovereign wealth fund. The fund will be used for educational, research, social projects and migration. The other 30% will go to the consolidated fund.
"The total investment of €1.15m will create a bond between the applicants and Malta in a tangible manner," Muscat said.
The Chamber of Commerce, Finance Malta, the MHRA and the organisations representing estate agents all endorsed the revamped scheme and their representatives sat besides Muscat during tonights press conference.
Muscat added that the due diligence which will now have four separate stages will take a minimum of six months due and a maximum of two years.
He said that initially the government and opposition position were very wide apart but in recent weeks we have edged closer and there were similar proposals from all sides.
"We wanted to change the programme while keeping it an attractive one," Muscat said, adding that "had the opposition made a little concession they would have been with us here today. However our door is not closed."
Denying the opposition's claims that the changes went beyond cosmetic changes, Muscat said that the government wanted to have more clarity and transparency.
He added that the social partners urged government to take control of the scheme and to make better used of the funds.
Muscat added that the programme was close ended and the government took on board proposals made by the opposition and stakeholders.
A Legal Notice will now be issued with the announced changes which Muscat said can be challenged like all other laws in parliament.
Jurgen Balzan was a MaltaToday reported from 2011 to 2017.
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truthBtold, do you happen to know some reliable psychiatrists able to cure that terrible condition called "negativity"? (1) That initial purchase of medium priced property foreseen in the scheme would eventually lead to the acquisition of much more higher priced units. Even if only half the applicants follow this line that would be enough. REMEMBER that these initial funds from initial sales would be available to owners or banks to invest and earn interest thereon!!! (2) Renting would equally leave a positive impression on any owner's pockets whilst leaving the owner to acquire for himself any future capital appreciation. (3) Investing in national bonds would allow our Government to capture funds without having to source from new taxes or local sources. No big deal there as well huxx?? (4) Any "remainder", as you put it, would be invested within our economy either to improve our living standards or for social services. Bad as well huxx?? (5) You seem to forget that these new, very wealthy, highly educated families are not normally associated with deprived areas, social benefits, state schooling, and although our medical services are very good, these applicants would normally afford far more expensive private hospitals. Apart from the fact that they are obliged to have a private medical insurance policy covering ALL their family!!!) truthBtold, would you do us a favour and reveal the name of the Business School you frequented; that way we would be able to steer clear!
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@betterfuture. Considering it’s the season for good tidings let’s be kind and understanding to those less fortunate who either are too brainwashed to see the truth or are simply to illiterate to read between the lines. It is absolutely amazing that those who approve of these citizens are only looking at the credit side of the ledger as if the debit side is irrelevant. Maybe there is a medical condition where the imbalance on their brains does not allow them to understand that far. Out of the 1million, One hundred and Fifty thousand euros included in the cost of each Maltese citizen accommodation, 500,000 euros will be returned with interest and property valuation after five years. Another loophole that should be placed on the debit side is the alternative that instead of purchasing property for 350,000 euros, one has the option to rent the property for 5 years for a total sum of 80,000 euros. If the total 1800 privileged citizens choose this alternative, 630 million euros will never visit the Maltese shores. The investment in bonds or financial funds totaling 270 million must be repaid in five years with interest which could amount to 300 million. The rest of the scheme worth 1170 million will have to cover citizens benefits for the chosen1800 and their families for the rest of their lives.
With all due respect betterfuture, somehow your calculator has malfunctioned.
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My first impression from reading your report is that this does not amount to much and changes introduced are very one-sided and in favour of the applicant for Maltese passport rather than Malta,, since the eur 500,000 investment in property and Bonds need be held for only 5 years.
So the changes amount to introducing a 5 year Loan and not to a real investment in the country. Cannot the government come to a scheme which really is of long term benefit to the country and not just a 5 year stop gap? Conditions as set may give ground to abuse and must be amended.
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How much I love that phrase: Ahleb Guz, 2 biljuni, kwazi nofs id-dejn.
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Good God truthbetold, liberate your shoulders from the heavy yoke of those massive chips and try to see reason. Apart from what I have told Mr Vella, I want to remind you that at least €2.5 BILLIONS will be collected from these new citizens, RATHER than from existing taxpayers. There, take that!!
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@ Antoine Vella, very simplistic and down-to-negativity calculations my dear. You have mischievously left out the most important aspect of the whole scheme, i.e. the invisible bond that will attract these new, very wealthy, talented citizens, most probably highly successful persons in their respective fields to our nation. Once there is that vital link, which will enable them to participate within the EU like all other Maltese citizens, then they will realise Malta offers great potential for new and modern businesses marketed at other European countries. Especially when they realise that now we have a business friendly Government in situ. Had this scheme been announced by your party, I am sure we would be partying New Year's festivities till Easter. And then and there, I realise why the Opposition is so negative.
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XMUN Busullotti,EAT YOUR HEART OUT !!!!!!!YOU TRAITOR !!!!
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It's misleading to claim that citizenship will not cost €1.15 million (still low, in any case). The cost can be as low as €875,000 if the buyer rents a house (€75,000 in five years)instead of buying it.
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A special note to the brainwashed followers of Joseph Muscat.
Revamped citizenship scheme will require €1.15 million investment per applicant.
The same shit in a different coloured pot.
Considering the revamp consists of the original 650,000 euros to the government.
350,000 euros to the property speculators.
150,000 euros to the hotel owners and the financial services that float junk bonds and the end result was that the PM was surrounded by those who had something to gain.
What about the Real Maltese citizen and true taxpayer who has everything to loose?
The breakdown to the millionaire that is interested in a tax haven and a citizenship that will give him access to the European Union. Between tax concessions and property valuation and insider trading of investments his 1.5 million euros will create a handsome return with the possibility of a profit. To those brainwashed donkeys who believe what Joseph Muscat is trying to sell them, ask yourself this simple question. What is the reason for such immorality? Could it be that Chinese nationals will gain the privilege to invest in Malta’s entities as citizens of the EU? Where selling your country to outsiders for maybe a few million at best when one considers the financial burdens the new citizens will impose on the Maltese working class, is more important than safeguarding the Maltese as a distinct society. Looks like once again Joseph Muscat and his old senile stooges have decided to shake the chicken to make scrambled eggs.
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One things come to mind, increasing the cost of IIP , means the company or companies that will be involved and who get paid by commission , I understand, would have objected but it seems that they might have a demand on hand and Simon seeing that PL upped the cost knows that it will be a success.
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Jien smajt li 'Imodium' hu 'out of stock mill-zpizeriji. Smajt li zdied ukoll il-bejgh tal-lumi u ilma zahar imhabba ghoqidi fiz-zaqq kagunati minn dijareja kagunata mill-politka. Hafna qed isaqsu jekk f'Alla u Ommu kienx qed isuq Simon Busutill!
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Jekk tfifthu ftiet it T.O.M tifmu ftiet L-UGIEH TA ZAQ li ghandhom il kumentaturi tal PN. Kompli tiehom PRIM. Ghadhom ma nsewx li ma ghadhomx fil Gvern imsieken.Ragel minn jiranga l-izbal mhux minn jivota bil Qalb u stina rasu li b`dak il vot kien qata is -sentenza li il poplu qactu minn hemm.
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Every picture tells a story. Everybody on board except Simon Busutill.
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1800 aplicants @ 1150000euro=2.07BILLION .eat your heart out simon.THATS investment.
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Everybody on board except Cassandra Busutill?
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Simon l-izolat.
