The Minister for Finance last week presented in Parliament the amended Permanent Residents’ Scheme which is now being proposed instead of the system which was in force until late last year before it was suspended indefinitely. The Minister is proposing five different schemes to replace the existing scheme based on the experience gathered over the years.

The current permanent residents’ scheme has been suspended for the past six months, since 24 December 2010, even though it had been working perfectly before government flagged perceived irregularities through which foreigners allegedly ‘abused’ of the scheme. The five new schemes will now be put up for consultation, with stakeholders, before being enacted into law. The Minister indicated that despite the heavy workload in Parliament he wishes to have the updated scheme implemented before the house rises for the summer recess, which this year is happening later than usual due to the Divorce legislation debate.

While updating the scheme is an exercise which should reflect the realities of today, both as a European country which is updating its laws rather than the present decades old permanent resident’s scheme and also in terms of the residents that the country is attracting as permanent residents.

Nevertheless, the fact remains that the scheme has been suspended for nearly six months and a concrete time-frame still has to be established before the new scheme comes into force. In this regard, the country has lost valuable points in its credibility especially with potential residents who had either made the necessary arrangements to move to Malta, such as purchasing property and paying all the taxation duties requested by the authorities, or were considering Malta as their place of residency. Letting down these people is a potentially embarrassing situation and a few were actually put off from making the move due to the fluidity of the situation. As was reported in newspapers, foreigners who had made the necessary arrangements were having second thoughts on relocating to Malta citing government’s unilateral decision to suspend the scheme after accepting all their taxes and withholding their resident’s permit without a valid reason at law. Moreover, the people caught in this interim period doubted the stability that Malta offers fearing future changes to the scheme which could negatively affect their status. Even though the property market does not depend on the scheme due to the relatively low percentage when compared to the overall sales figures, high net worth individuals are not expected to be patient with a country which suspends a scheme and requires six months to start consultations with stakeholders on a revised scheme.

Thus, the present situation is potentially damaging to the reputation of the country. The five new schemes proposed, even though at first glance look complex should be transposed into the law as soon as possible to avoid the potentially embarrassing situation of being unable to accept high net worth foreigners wishing to relocate to Malta.