Sun, May 03, 2015 - Page 14 News List

Malta offers citizenship and
all its perks — for a price

The government aims to boost economic growth with the program, but critics say Malta, which saw 3.5% growth last year, is not an economic basket like other countries offering similar programs

By Jenny Anderson  /  NY Times News Service, VALLETTA

US yacht Shockwave, French yacht Team Jolokia and Hungarian yacht Wild Joe compete at the annual Middle Sea Race in Valletta’s Grand Harbour in Malta on Oct. 18.

Photo: Reuters

As wealthy foreigners rush to get citizenship in Malta under a new program, the residency requirement is taking many forms.

Russians rent high-end villas, then stay in five-star hotels when they visit.

A US financier plans to live in Switzerland, but occasionally vacation in Malta.

One Vietnamese businessman, eager to start the clock ticking on the 12-month timetable for residency, sent the paperwork on his private jet to expedite renting a property he had never seen.

“They come twice, once to get a residency card and once to get a passport,” immigration lawyer Mark George Hyzler said.

Malta’s citizenship program, which offers a passport to those willing to pay 1.2 million euros (US$1.34 million), has been controversial since it was introduced more than a year ago. However, the residency requirements, meant to make the program more palatable, are only increasing the consternation among critics, who say the program has resulted in the sale of citizenship to the global 0.1 percent.

Applicants must show they have rented a property in Malta for 12 months, but they do not necessarily have to spend any time in the Mediterranean island nation, raising the question of what genuine links they are establishing.

“It is questionable how the residency requirement is being applied,” Maltese MP Tonio Fenech said.

Lawyers, accountants and real-estate agents say the citizenship program has catapulted Malta onto the radar of the global elite. Applications are pouring in and the program aims to raise 2 billion euros, more than a quarter of Malta’s GDP.

“We want to attract individuals who can add value to our country because of their ideas, and their networks and their businesses and their talent,” said Jonathan Cardona, CEO of Identity Malta, which administers the Individual Investor Program.

Housed in a sprawling, fortresslike 16th-century building once used as a hospital, the Malta citizenship program nods to the country’s multicultural past, punctuated over the years by invasion. Maltese, the official language with English, looks and sounds Arabic, but its speakers are primarily Roman Catholics who pray to Allah.

The citizenship program also reflects Malta’s present. The country, which covers 316km2 and is about 80km south of Sicily, has few natural resources and a population of just 424,000, about half that of South Dakota. Malta counts on the reliable sun and shimmering blue sea to attract tourists. Beyond that, it has had to be creative to keep the country’s coffers filled.

The tax system, in particular, has been a boon. Some foreign companies can be structured to pay 5 percent in corporate taxes. Malta also has double taxation treaties with 65 countries, allowing individuals and businesses to avoid being taxed in two places.

Significant tax advantages and a pro-business regulator have created a booming financial services industry. It now represents 12 to 15 percent of the country’s GDP, up from 6.3 percent in 2004. Online gambling companies have flocked to the island, as have hedge funds.

With a strong corporate base, Malta sailed through the economic crisis relatively unscathed. The economy grew 3.5 percent last year. Unemployment is 5.8 percent, the fourth-lowest in Europe.

Malta was looking to expand that economic growth through the citizenship program. Under the initial plan in 2013, the newly installed Labor Party government proposed selling passports for 650,000 euros, with few other requirements for citizenship.

This story has been viewed 2281 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top