New Investor Route to Maltese Citizenship under Maltese Law

November 20 00:00 2020 by The Editor Print This Article

Having reached its quota of a total of just 1,800 families in 6 years, Malta's Citizenship by Investment Programme, or the Malta Individual Investor Programme, is being replaced by a new investment migration route introduced by amendments to the Maltese Citizenship Act last July 2020. 

"The Maltese Citizenship Programme is succeeded by Provisions for Naturalisation for Exceptional Services by Direct Investment in Malta "

This marks an end to a citizenship programme that sparked fierce opposition from critics of the incumbent government.  In response to a notification of possible infringement proceedings in relation to a programme that is now defunct, the Maltese government took a fierce stance fending off any incursion in its sovereignty in matters concerning nationality as enshrined by the European treaties, vowing to defend its position all the way to the European Court of Justice if necessary.  The original programme launched in 2014 and completed in 2020 generated approximately €1.5bn (£1.3bn, $1.8bn).  The latest legislative event concerning Maltese citizenship to be granted for exceptional services by direct investment in Malta mark a tactical move designed to remove any controversial elements and strengthen existing nationality laws to ensure such matters remain within the island state's sovereignty in matters of nationality.  

Benefits for Malta

Economic stimulation noted a significant increase not least due to the attraction of the worlds elite to the Individual Investor Programme.  This has encouraged the wealthiest families and the most successful entrepreneurs, who have passed the program's rigorous four-tier due diligence process, to locate more of their financial and business affairs in Malta.

In contributions from approved Maltese citizenship applicants, the sovereign fund receiving these significant injections of capital, the National Development and Social Fund (NDSF) raised approximately €1.5bn (£1.3bn, $1.8bn).   The spending of NDSF funds in Maltese society has included a €1m investment in the upgrading of the cardiology department at Mater Dei Hospital allowing more than 3,000 patients to get a more effective treatment, a €6m contribution to Puttinu Cares Foundation helping this charitable organisation develop new accommodation units in London, these will be used by families suffering from Cancer while receiving medical care in the UK.  Malta’s Primary Health Care system has been donated with €10 million being invested in the upgrading of the global health centres. The investment will be spread over eight health care centres and 54 district clinics where better medical services shall be given to our community. €60 million have been invested to support the building of a thousand new units around the Maltese islands giving a home to a thousand in 22 different sites based on social profiling, spread over 12 localities to ensure that the demand is adequately catered for.  €6 million are being used to upgrade Malta’s national strategy for Sport and Physical Health by developing sport facilities and recruit international coaches to ameliorate our local talent.

Besides the NDSF, beneficiaries of Maltese citizenship have made more than 625 donations to various NGOs around the island with a total value exceeding €4 million, in the fields of art, culture, heritage and philanthropy, with the amount being at their sole discretion. The new regulations set a minimum charitable donation at €10,000, which is significantly below average donations made in practice by new Maltese citizens.

Benefits for Investors

Beneficiaries of Malta's investor route to citizenship have benefited in a second home for their families in the heart of the Mediterranean Sea, a thriving European Union member state that enjoys a strong European tradition and a rich multi-cultural history.  

Investment Requirements

Malta's new investment migration programme will allow applicants to apply for citizenship after a 3 year or 1 year residence period.  Applicants who reside in Malta for 3 years will be required to make an investment of €600,000.   Applicants who reside in Malta for 1 year will be required to pay an investment of €750,000.  In addition, an investment of €50,000 is to be paid for each dependent added to the application.

Industry reaction

International lawyers we spoke to regarded the second legislative attempt to an investment naturalisation route to be notably better than the first.  An American lawyer we spoke to expressed relief that all aspects of the programme have been retained by the appropriate national bodies without undue involvement of foreign consultants in the implementation of the programme, thereby ensuring the utmost transparency of process and the highest standards in governance.  He further added that these Maltese citizenship amendments raise the bar on already high standards of due diligence set the old IIP and welcomed the restrictions of authorised agents to licensed legal and financial professionals.

We reached out for comment to Dr Jean-Philippe Chetcuti, senior partner at Maltese law firm Chetcuti Cauchi Advocates, a recognised expert in nationality law and a fervent ambassador for investment promotion in Malta:

"We are pleased that the new rules on naturalisation for exceptional services enjoy a rigorous structure for due diligence, new risk and reputation management measures to protect Malta and the Maltese, and a continuation of the high quality treatment deserved by exceptional contributors to the science, arts, sports and the direct investment in our Island."

Fellow lawyer Dr Antoine Saliba Haig, a specialist in nationality law and investment migration noted:

"Above all, in contrast with the style adopted by the legislator in the original IIP that resembled citizenship by investment programmes in countries outside the EU, we now have conventional routes to Maltese citizenship more akin to naturalisation rules prevalent across the European Union. I would say this is a good balance of investment attraction that also following the spirit of international law."