Offshore

Malta Opens Door For HNW Passport Regime; Controversy Continues

Tom Burroughes Group Editor London 19 November 2013

Malta Opens Door For HNW Passport Regime; Controversy Continues

Legislators in the Mediterranean island of Malta, have voted to approve a scheme allowing high net worth individuals from outside the European Union, such as from Russia and the Middle East, to become Maltese citizens. The matter, however, threatens to cause a row among EU lawmakers, media reports have said.

The move, which has stirred considerable controversy due to whether issuance will incur rigorous identity checks on applicants, has been approved by the Maltese parliament. The measure has been brought in by the Labour-led government, which won power in national elections by a wide majority earlier this year.

Citizenship, under the scheme, is granted to investors contributing at least €650,000 ($878,000) and who undergo certain checks. Spouses and minor children can also become citizens for a sum of €25,000 in each case.

The Individual Investor Programme has certain features in common with other countries’ citizenship programmes for high net worth individuals, such as the Investor and Entrepreneur visas operated in the UK. However, such policies are controversial: in the UK, the influx of wealthy foreigners has been cited as a reason for sky-high residential property prices in London.

The issue also highlights how Malta, which as an EU member state now strenuously denies the tag of “offshore”, is nevertheless keen to promote its status as a welcoming place for foreign investors and businesses. Malta has avoided the worst of the credit crisis in the eurozone in recent years; it nevertheless competes against other European jurisdictions such as London and Switzerland. The island is also keen to develop its profile as a wealth management location.

Malta’s attempt to attract wealthy foreigners will strike some of its domestic population as ironic, and perhaps questionable, because the country has also had to tackle a major problem of immigrants fleeing strife-torn North Africa in recent years; in some cases, many migrants coming by sea have drowned making the hazardous sea passage.

David Casa, a member in the European Parliament of Malta’s opposition Nationalist Party, has said he and fellow MEP Roberta Metsola will seek to stop the government's citizenship scheme, which he said has alarmed other MEPs concerned about its impact.

In Malta, opposition leader Simon Busuttil said that if his colleagues take part in a monitoring committee scrutinising who receives the passports, he did not rule out the idea of publishing such a list.

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