The Maltese authorities have passed a law last fall enabling 1,800 foreigners to obtain Maltese citizenship of the Mediterranean island – and thus ¬ membership in the EU and the Schengen zone, as the right to move freely – without other consideration than the payment of EUR 650 000 per person. This first sum is then injected into the national development fund through the Malta Individual Investor Program (IIP), created for the occasion. In addition, the candidate must acquire a property of more than € 350,000 – or rent a residence for 16 000 euros for five years – and pay USD 150,000 in a financial instrument approved by the local government. Before Malta, other countries of the European area already use related methods, whose main goal is to bail out the public finances by attracting wealthy investors.
In this context, the Labor Prime Minister Joseph Muscat hopes to raise 30 million euros in the first year, with the 45 “high value” applicants and up to € 1 billion in five years. Henley & Partners, the company responsible for organizing and managing newcomers’ administrative formalities expects for its part 200 to 300 annual applications. Interested parties have the opportunity to be joined by their spouses, children or parents; provided that they pay a fee ranging from 25,000 to 50,000 euros for each, or stay home because the big innovation is that they do not have the obligation to reside on site.
Those developments mark a new step in the “notoriety” of European citizenship, encouraging foreign investors to enter Europe by a welcoming offshore jurisdiction. With this measure, Malta has positioned itself as a pioneer in the attraction of foreign capital benefiting the whole Euro area. The project enchants business people who see in it a considerable advance of their island which saw foreigners flocked both for holidays and investment destination since five years.
Authorities only prolong a policy of attracting foreign capital which is now dedicated and offers a range of tax incentives to entrepreneurs via offshore companies. The choice of openly monetize nationality seems to have moved the discussion to another level. One thing is certain: the first results will be followed with great attention and interest at a time when capital shortages in the euro area, the pro-Malta see here an extra chance to see the financial crisis curbed in Europe by attraction of funds.