The Malta Independent 1 December 2022, Thursday
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Citizenship: Government presents ‘a radically changed scheme’

Malta Independent Monday, 23 December 2013, 19:39 Last update: about 9 years ago

Announcing details of the amended citizenship scheme, which Prime Minister Joseph Muscat stressed was concluded in agreement with constituted bodies after having listened to their concerns and those of the people, the government has presented “a radically changed scheme”.

Addressing a press conference this evening, he said the Opposition disagreed on a minor point of principle.

Pointing out details, Dr Muscat said the total package value will go up from €650,000 to a minimum of €1.15million.

€650,000 must still be paid as a national contribution – which amount Dr Muscat noted, is much higher than what the average citizen contributes in taxes. A total of 70% of these funds will go to the National Economic and Social Development Fund which will be managed in a similar way to Norway’s sovereign wealth fund.

Its scope will be to carry out projects linked to education, innovation, job creation and the implementation of the jobs plus strategy, social projects and ones regarding public health. The project will be led by a board of trustees and individuals who are super partes and can therefore decide at liberty on how funds are to be spent. The fund will be on the same level as the Central Bank, Dr Muscat said.

Another 30% of the revenue will go to the consolidated funds as a tax contribution.

The second pre-requisite is investing in property of a minimum value of €350,000. Prospective citizens can alternatively rent property at a minimum of €16,000 annually and must have a contract for a minimum of five years.

A total of €150,000 needs to be invested in stocks or bonds which will be sanctioned by the government and which will benefit the island. Such investment needs to be for five years at minimum.

The government certainly believes this is a better way to create a more tangible and long term connection with the island. The intention has always been to attract individuals of a high reputation.

He said the difference between what the Opposition proposed and what was decided is a very simple one. Citizenship will be granted when the residence contract (for at least five years) is signed while the opposition insisted on granting it at the end of the fifth year in residence.

“This proposal – although seemingly only slightly different – would have led us to lose the competitive edge and made the programme like any other in Europe,” Dr Muscat said.  

The government made it clear the contractual obligations need to have been signed before a citizenship can be granted and the constituted partners have agreed with the government’s suggestion, he said.

The government and opposition were at first far apart in their suggestions but eventually similar proposals, backed by ones from the Chamber of Commerce and Prof. Bannister, who moderated talks, were put forward.

The government accepted the call for compromise while keeping the scheme attractive, Dr Muscat explained.

While not commenting on the Opposition’s stand as such, he would have preferred it  to be at the same table with the government and stakeholders yet the government’s call for the opposition to accept the scheme remains open.

Dr Muscat highlighted the proposed programme has been radically changed and includes totally new elements. People expected things to be clear and transparent and the government acted on this. A programme managed by the government was called for while the link between prospective Maltese citizens and the island was necessary. The use of revenue generated from this programme needed to be clear and the programme was to have a clear term by when it ends. The need for better investment was also highlighted. 

Asked to clarify Henley and Partners position, Dr Muscat said the company, with which a contract had been signed, will be complying with the new criteria. Henley and Partners remain the government’s consultants on the scheme while the agency managing it will be Identity Malta.

All operators approved to promote the scheme will be able to apply directly with Identity Malta, Dr Muscat said.

He also pointed out that a four tier diligence process will be applied. Two government companies will assess applicants, following which process the government needs to give the go-ahead itself.  The Malta Financial Services Authority will also be overseeing the process. This will take place within a time frame of between six months and two years between when the request for citizenship is filed and granted.

As previously announced, the secrecy provision will also be removed and although this meant that certain markets will be closed, a conscious decision was made.

Capping will also be introduced to the scheme in totality. A maximum of 1,800 applications will be taken. The length of the programme depends on when the maximum take up is reached. He pointed out that at the moment, the island gives on average 1,000 citizenships a year to those who marry Maltese people among others.

Asked by The Malta Independent on reactions following the changes and whether the government had started to market to amended scheme, Dr Muscat said once the government was criticised for launching its marketing programme before an agreement was reached in Parliament, the mistake was not repeated.

He added the easiest option for the government was to leave the scheme unchanged however took the announced steps in favour of more economic growth.

Referring to January’s discussion at the European Parliament, Dr Muscat said the theme is not Malta’s scheme but on European schemes in general. Noting that he shoulders responsibility for the mistakes committed, he said foreign competitors will continue to criticize our scheme despite the changes yet he does not expect Maltese people to badmouth the island abroad. 

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