Chetcuti Cauchi: Consensus-based legislation in Maltese Investment Migration

July 14 00:43 2020 by The Editor Print This Article

Past Governments of both political hue carry under their belt many wins for Malta’s attractiveness for foreign direct investment: financial services, online gaming, maritime, pharma and biotech to name but a few.  In the area of Malta’s attractiveness for the world’s affluent, Malta has built on the 1966 Permanent Residence Scheme with subsequent revisions, the Highly Qualified Persons schemes, the Retirement Scheme, the Global Residence Programme and the Residence Programme, all investor migration programmes designed to help Malta attract clean capital and gain familiarity with the talented and the successful.

Attracting global talent, clean capital and entrepreneurship

These are areas of national interest and have always enjoyed political consensus, and so should they.  Apolitically, we should applaud not begrudge the continuation of this success in building Malta as a financial centre attractive to the most successful global citizens, by adding to the island's array of attractions an investment migration programme with the most premium investment threshold in the world.  With the single highest financial contribution in all investment migration programmes in the world, including the USA's EB5 programme, the UK's Tier 1 Investor Visa, Portugal's Golden Visa and Cyprus' Investment Programme, all of which lead to citizenship, Malta's Individual Investor Programme has gone on to raise Malta's profile in international business spheres, with its new citizens claiming the highest positions of the Forbes Rich List, to Malta's honour and benefit.  Politicians from all political camps should be proud that any successive government continued building on past steps in shaping Malta's international profile, and should be claiming joint credit for this success, despite policy disagreements on any aspects of an investment programme serving the national interest.

Malta: Compliant, Transparent, Sincerely Cooperative

Malta's reputation as a compliant member of the international community, transparent in its dealings in the global world of finance and investment, is one of Malta's most valued assets.  It is needless to say that this is another area of national interest that merits a consensus driven approach to development.  Maltese governments should continue pursuing the development and improvement of already award-winning due diligence standards applied in Malta's investment migration programmes, applying the necessary resources, training and system to ensure immigration agents stay abreast of the compliance and risk management best practices and industry standards.  This is a track record built not in one legislature but over decades of development of Malta's reputation as a clean, well regulated and well supervised financial centre, enthusiastic but selective in its ambitions to attract the world's affluent. No due diligence infrastructure is perfect and God knows that prominent countries larger than Malta have found themselves the subject of EU infringement procedures for their failures in implementing AML legislation and found their financial systems the victims of abuse for money laundering and funding of terrorism purposes.

In its introduction of new provisions in its citizenship law, Malta has demonstrated a track record of dialogue with the European Commission on a number of occasions, in the spirit of sincere cooperation, despite citizenship falling squarely in the sovereign legislative authority of the member state.  In January 2014, Malta and the European Union came to an agreement on the introduction of a residence requirement in the Malta Individual Investor Programme that secured EU endorsement for Malta's Citizenship by Investment programme. Again in July 2020, Malta discussed with the European Commission the introduction of a new Malta Investment Programme with a view to addressing concerns expressed in European quarters over the IIP.   At this momentous junction in Malta's impressive investor migration record, a bipartisan consensus has never been more critical when it comes to negotiating Malta's position on such key matters of national interest with the European Union and with the wider international community.

"Malta's FDI Attractiveness is a matter of national interest and should enjoy bicameral support. It should be pursued with fierce but constructive parliamentary debate and once a democratic decision is taken, backed by bi-partisan consensus, it should enjoy full support across Malta's political divide."

Maturity and a healthy democratic process

The holding to account of Government is an inherent responsibility of any opposition and should continue to be exercised, but in the spirit of transparency, accountability and good governance. This role should be performed mindful of the importance to preserve at all times Malta's hard earned reputation as a transparent and compliant jurisdiction.  In this sense, the politicisation we have witnessed in the last years of the financial sector and the high net worth investment sector is a rude stab in the back of financial services practitioners like myself and other colleagues who have invested so much in backing Malta's financial centre ambitions, not least on the wave of the Individual Investor Programme.  

At this junction in the Island's post-independence history, Malta deserves political maturity. Are we up to the challenge?

Dr Jean-Philippe Chetcuti is the managing partner of Chetcuti Cauchi Advocates, an international law firm facilitating inward investment by the world's most successful business families and entrepreneurs, in financial services, alternative energy, technology, sustainable development and hospitality.