The Individual Investment Programme is part of the scheme whereby Maltese Citizenship can be purchased for a flat rate one-time payment. This law was passed by Parliament by virtue of the Maltese Citizenship (Amendment) Act 2013 and is to be enabled by means of a legal notice.
Whilst the actual regulations have not yet been published or implemented, the Government has described the IIP as follows:
Important features of the Maltese Citizenship (Amendment) Act:
This scheme is intended to be put into effect in the year 2014 when Malta will be celebrating it’s 50th Anniversary from gaining Independence and it’s 40th Anniversary from becoming a Republic. We feel that not only is the programme inappropriate but it is an insult to the hard work of our forefathers and of the historical leaders of both political parties, namely Gorg Borg Olivier and Dom Mintoff.
It is somewhat of concern that this scheme was not mentioned in the electoral manifesto of the Labour Party in the run-up to the election. That they then rushed this scheme through Parliament, without considering any of the proposals being made, heightened that concern.
Furthermore, the Government permitted, and even assisted Henley & Partners, through the very presence of the Prime Minister at international events, to promote the scheme before it even was implemented into law in Malta. This showed an utter disregard for democracy in Malta.
At an international level, this move has created a huge stir with newspapers across the world causing untold damage to Malta’s reputation.
Malta has also managed to upset the other Member States of the European Union and the EEA as effectively Malta is selling EU citizenship on terms determined solely by the Maltese State with benefits only to Malta.
Moreover, the lack of a residency requirement gives the new citizens to right to live and work anywhere in the EU, so Malta takes all the benefits, with other countries having to shoulder the burden of the new citizens.
The introduction of this scheme could weaken Malta’s position on burden sharing with request to the immigration issue.
The fact that Malta has taken advantage of being a member of the European Union and also of the Schengen area, with total disregard for the spirit of the relevant Conventions, may result in other member states applying pressure for Malta to lose access to Schengen which of course will have a consequence on all Maltese citizens.
Furthermore, to date the US Embassy has remained non-committal as to whether this could result in a withdrawal of the right of Maltese citizens to visit the USA without a visa. Again any action in this regard would have a negative effect on all Maltese citizens.
Individuals who originate from countries which do not allow dual citizenship (such as China) would have to renounce to their original citizenship. This means that they would become Maltese without having ever set foot in Malta.
This scheme has thrown a bad light on Malta with many international newspapers speculating that Malta is in financial trouble, thus causing damage to the financial services industry where reputation is everything; this so soon after the Cyprus aftermath. The comparisons to Caribbean jurisdictions have pushed us back into the bracket of offshore jurisdictions which is only of benefit to our competitors and certainly not of benefit to Malta.
Malta was for many years considered a red flag country and it has taken a long time to disentangle ourselves from being considered an offshore jurisdiction to one with a sound and reputable financial services industry.
Malta has the largest shipping register in Europe and the economy is indeed stable. This industry contributes Eur300million into the Maltese economy and anything done to disturb that could cause irremediable damage to the Maltese economy and consequently every person living in Malta.
The discussion of citizenship should be much broader than this.
This is not the case. By joining the EU, people from other EU states did not automatically acquire Maltese citizenship. What was acquired was the free movement of persons and of goods with the EU. Never was citizenship up for sale.
The EU cannot rule over the sovereignty of a country. This is the reason why there has been an outpour of outrage from other member states of the EU since the EU Commission is helpless in the face of the introduction of this scheme.
Yes, there are other countries which offer citizenship. However, it is not correct to liken this programme to any one of those offered by other EU countries, save for one of the Cypriot options were the “investment” level is set much higher. If anything, it is more like the ones offered by certain islands in the Caribbean like St. Kitts & Nevis. However here again the latter also require a certain element of investment– unlike the IIP.
Even then, not even the Government of St. Kitts accepted Henley’s proposal to be the sole concessionaire, recognizing the intrinsic conflict of interests that such a proposal brings with it.
The following table shows how this scheme which has been announced by the Government of Malta is not like any other programme available in other European countries and other jurisdictions:
Country |
Citizenship |
Residence |
Belgium |
Depending on individual circumstances citizenship can be obtained after 5 years of legal residence. |
Most residence applications concern persons who wish to establish business ties with the country. |
Portugal |
After 6 years of residence it is possible to apply for a passport and citizenship. |
Residence may be acquired under the Golden Residence Visa Program. By doing one of the following:
|
Austria |
Minimum of €3 million in Austrian economy (public project or private project of public interest, recognized as providing extraordinary benefits). or Direct minimum investment of at least €10million in the Austrian economy. |
|
U.K. |
OPTION 1 Investor is free to invest the remaining £250,000 in whatever he likes. Financing option is available but investor has to prove that he has at least £2 million in assets. For investments over £5 million, ILR is received after 3 years, and for investments over £10 million, ILR can be received after 2 years. OPTION 2 Applicant to work full time running his business, paying taxes, paying salaries to the above-mentioned two new employees of his for the whole 5 year period. |
RESIDENCE: or Has not spent more than 90 days outside the UK in the 12 months preceding the application. CITIZENSHIP |
Cyprus |
This Citizenship-by-Investment programme grants citizenship under one of the following options:
In all cases except the last option, the applicant must hold a property worth at least €500,000, not including V.A.T, and must have a clean criminal record |
Permanent residence permit may be granted provided that the following requirements are met: (i) residential or other property with minimum market value of €300,000 purchased in Cyprus; (ii) secured annual income from abroad and from sources other than employment in Cyprus; (iii) funds transferred from abroad and deposited in a Cyprus Bank in a 3-year Fixed Deposit Account. |
The above table is meant for comparative purposes only for the purposes of comparing it to the IIP proposed by the Maltese Government. It is not meant to be a comprehensive description of all available programmes or the specifics of each one.
Buyers of the scheme should be aware that some of the very advantages that are attracting them to ‘purchase’ Maltese citizenship are not dependent on the Maltese Government and that effectively the Maltese Government is ‘selling’ something which is not its own to give. Namely:
The Opposition party in Malta has announced in Parliament that when it is elected to office, it will cancel the scheme and all passports granted under it will be withdrawn.
Legal opinion on this matter is divided. However, the fact is that a law that has been implemented as an ordinary law that only requires a simple majority in Parliament, can also be revoked by a simple majority.
It is our position that on an issue as delicate as the granting of citizenship, consensus should be sought in the House so that there is stability and certainty on the matter.
Henley & Partners are a firm who claim to be leaders on citizenship and residence programmes.
They also have interests in various other aspects of financial services from the incorporation of companies, the establishment of trusts, ship registration, and so on.
At a local information seminar, Chris Kalin, a partner at Henley & Partners, claimed that their interest is solely on promoting and managing the citizenship programme, stating as an aside that they only have a small subsidiary involved on other matters.
This is simply not true. The following are the companies that Henley has incorporated in Malta. This list may not be exhaustive. As one can see their interests range from citizenship and residency programmes, to trusts and the incorporation of companies and provision of tax advice, as also the selling of property.
|
Company Number |
Incorporated on |
Registered Office: |
Main Shareholder/s: |
Directors: |
IIP Malta Ltd |
C62190 |
10th October 2013 |
Level 4 Aragon House, Dragonara Rd St. Julians. |
Henley & Partners Holdings Europe Ltd (C58006) |
Michael Lucas |
IIP Processing Ltd |
C62539 |
7th November 2013 |
Mediterranean Conference Centre, Triq l-Isptar, Valletta |
Henley & Partners Government Services Ltd |
Hugh Morsehead |
Henley & Partners Holdings Europe Ltd |
C58006 |
26th October 2012 |
Level 4 Aragon House, Dragonara Rd St. Julians. |
Henley & Partners Holdings Plc |
Hugh Morsehead |
Henley & Partners Malta |
C62191 |
10th October 2013 |
Level 4 Aragon House, Dragonara Rd St. Julians. |
Henley & Partners Holdings Europe Ltd (C58006) |
Michael Lucas |
|
Company Number |
Incorporated on |
Registered Office: |
Main Shareholder/s: |
Directors: |
H&P Corporate Services |
C48074 |
30th October 2009. |
4 Independence Square, Valletta. |
H&P Trust Holdings AG
|
Hans Fraats |
|
|
|
|
H&P Private Equity Partners AG |
|
|
|
|
|
Daedalus Ltd |
|
H&P Structured Solutions |
C58289 |
12th February 2013. |
4 Independence Square, Valletta. |
H&P Structured Solutions |
H&P Corporate Services (Malta) Ltd |
H&P Trust Company (Malta) Ltd |
C54186 |
20th October 2011 |
4 Independence Square, Valletta. |
H&P Corporate Services (C48074) |
Josianne Cardona Gatt |
|
Company Number |
Incorporated on |
Registered Office: |
Main Shareholder/s: |
Directors: |
Henley Estate Holdings Ltd |
C64609 |
30th May 2013. |
Level 4 Aragon House, Dragonara Rd St. Julians. |
Hugh Trelawny Morsehead |
Hugh Morsehead |
Henley Estates Iberia Ltd |
C60780 |
12th June 2013. |
Level 4 Aragon House, Dragonara Rd St. Julians. |
Henley Estate Holdings Ltd (C64609) |
Andrew James Taylor |
Details of individuals involved as Directors/Shareholders: