Obtaining a Passport for Investment: Trends and Requirements

Malta is a small island nation in the Mediterranean, located near Sicily. It is a member of the European Union and the British Commonwealth. This dual status offers Maltese citizens unique opportunities—enjoying all the rights of EU citizens while also benefiting from considerable privileges as subjects of the British Commonwealth. This situation has become particularly valuable following Brexit, the UK's exit from the European Union. Specialists from the licensed agency “Garant.in” explain the benefits of Maltese citizenship, the paths to obtaining it, and the requirements for applicants.

Obtaining a Maltese Passport in 2024

Malta has developed several investment programs of its own. Like many European countries, its government allows the issuance of residency permits in exchange for investments. However, the unique aspect of Malta's programs is that they do not provide a direct path to citizenship over time, as is often the case in other countries.

This fact does not mean that citizens from third countries cannot obtain a Maltese passport. For this purpose, Malta has designed a separate program. Let’s take a closer look and find out how one can become a Maltese citizen in 2024.

Features of Malta's Citizenship by Investment Program

The official name of the program is the Malta Individual Investor Program (IIP). Here’s a brief overview:

• Introduced in 2013;
• Became operational in 2014;
• Initially capped at 1,800 applicants, though due to its success, this number is likely to increase. Some sources suggest that the quota has already been exceeded, though the Maltese government is reluctant to release detailed statistics;
• Due to its transparency, high applicant standards, and clear procedures, the IIP is considered a gold standard among similar schemes and has twice been ranked the best citizenship by investment program globally.

Requirements for Investors

To become a Maltese citizen through investment, applicants must fulfill the following financial requirements:

1. Donate at least €650,000 to the Maltese National Development Fund. This is a non-refundable contribution, essentially the price for the passport, which cannot be recovered under any circumstances.
2. Purchase real estate worth at least €350,000. Alternatively, applicants can lease a property for five years, paying at least €16,000 annually. Unlike other programs (such as in Cyprus), the acquired property cannot be sublet, but it can be sold after five years.
3. Buy government bonds worth at least €150,000. Like the real estate requirement, these bonds can be redeemed after five years, and they will generate around 3% in annual returns for the investor during this period.

These amounts apply only to the primary applicant. If the investor’s family members also wish to acquire citizenship, the costs increase. For example, the non-refundable contribution for a spouse or child is an additional €25,000 each. For adult dependents (such as older children or parents), the extra cost is €50,000 per person.

Advantages of Maltese Citizenship

Only wealthy individuals can afford Maltese citizenship by investment, as it is one of the most expensive programs in the European Union. However, the advantages of obtaining a Maltese passport are significant:

• Free business operations across Europe and the UK, including the ability to open bank accounts easily;
• The ability to quickly change tax residency within the EU;
• Extensive tax benefits in Malta itself, including the option not to become a tax resident and avoid paying taxes on income earned outside Malta;
• Vast freedom of movement—Maltese citizens can travel visa-free throughout Europe and freely enter the USA, Canada, Australia, and a total of 168 countries worldwide;
• Maltese law allows for dual citizenship, meaning investors can retain their original nationality;
• The ability to live in a high-economic country with a developed legal system, and to access education in top European and British universities;
• Citizenship does not require the investor to reside in Malta;
• After five years, the investor’s case is reviewed again by a special commission. If successfully passed, the citizenship becomes permanent and can be inherited by future generations.

In addition, the primary applicant can also extend Maltese citizenship to their family members. Notably, Malta’s definition of "family" is broader than that of other European programs, allowing applicants to include grandparents if they are dependents.

Applicant Requirements

Obtaining Maltese citizenship is not only difficult due to the program's cost but also because of the strict applicant requirements. Applicants must:

• Pass a multi-level Due Diligence check (with an additional fee for this process);
• Have no criminal record;
• Be at least 18 years old;
• Submit a complete and flawless set of required documents.

Due to the thorough vetting process, it can take between one and a half years to process each application.

Recent Trends

As a small island nation, Malta’s citizens do not all welcome the influx of foreign investors. Political debates surrounding the citizenship by investment program are ongoing in the country. The program itself, as well as certain conditions within it, are being contested. For example, the government is considering introducing a residency requirement, which would mandate new citizens to live in Malta for at least 183 days a year. Other demands from opposition parties include:

• Removing the anonymity of program participants;
• Limiting the countries from which applicants can apply;
• Banning the expansion of the quota if it is exhausted;
• Introducing a ban on dual citizenship;
• Holding a national referendum on the issue of selling citizenship.

These debates and political sentiments only underscore the value of Maltese citizenship and, in some ways, encourage investors to act on their interest in securing this coveted passport.

Investment Contributions and Economic Impact

Since its inception in 2014, and up to June 2019 (the most recent period for which full data is available), investments in Maltese citizenship have contributed at least €1.23 billion to the country’s economy. Approximately half of these funds have gone to the National Development and Social Protection Fund.

Revenue from the investment program formally known as the Malta Individual Investor Program accounted for three-quarters of the government budget surplus in 2018 and allowed the country to build up substantial reserves in the National Development and Social Protection Fund, which currently stands at around €600 million.