Citizenship and residency by investment programs have exploded in popularity in recent years, but the coronavirus pandemic and ensuing government lockdowns have raised fears in some circles that governments may choose to terminate or restrict these popular programs. Fortunately, early signs from most jurisdictions suggest that such programs have not lost favor with authorities. On the contrary, governments around the world have acknowledged that these programs can be a powerful tool for reviving national economies and sourcing much-needed investment for countries that have been badly hurt by the economic slowdown.

In the most recent example, the government of Malta confirmed that it will launch a new and improved version of its popular citizenship by investment program once the quota of 1,800 applications is reached later this year. Recent statements from the Parliamentary Secretary for Citizenship and Communities Alex Muscat suggest that over 70% of that quota had already been filled.

The Malta Individual Investor Program (MIIP) is one of the most popular programs of its kind in Europe. It allows high-net-worth individuals who make investments in the country to acquire citizenship in Malta, a country with one of the strongest, most stable economies in the EU. Benefits of the program include free movement within the EU, visa-free travel to 168 countries worldwide, a fast-track to citizenship for the entire family, a favorable tax regime, and quick processing.

Any concerns regarding continuity of the program once the quota has been filled have now been laid to rest by Mr. Muscat and Maltese Prime Minister, Andrea Abela, who indicated that further reforms are being considered, and that the Maltese government has already begun discussion with European institutions and stakeholders in that regard. Therefore, rather than terminating or suspending the program as some had feared, the Maltese government plans on improving the program to keep it at the forefront of the investment migration industry.

Most observers feel that the MIIP has had a net positive effect on the Maltese economy, raising over EUR800M since 2014. Funds generated by the Program have been used to finance a variety of key government projects, including more recent measures to reduce the impact of COVID19 on the Maltese economy.

Possible Changes

While nothing has been finalized, speculation regarding possible changes include:

• an extension of due diligence obligations to accredited agents or other changes to bring more transparency to the program, which is already considered an industry leader for transparency and integrity;
• an increase of the Real Estate investment amount, which, despite market appreciation, has remained stable since the program was launched;
• an increase of the Government contribution amount, possibly with respect to family members and additional dependants of the principal applicant;
• a rebalancing of the structure of the investment, such as doing away with the requirement to invest EUR 150,000 in stocks or bonds, or increasing the required real estate investment while reducing the government donation amount.

With increased competition from countries such as Montenegro, Turkey, and Cyprus, we expect the new version of the MIIP to be even more attractive and competitive. We could once again see the MIIP setting trends for the entire industry.

Investing in a second Citizenship or Residency in your chosen jurisdiction offers a range of benefits to high net worth individuals and their families, and provides freedom and flexibility in these unpredictable times. Should you be interested in pursuing citizenship or residency by investment, including through Malta through the IIP program, please do not hesitate to contact us.