The Office of the Regulator of the Individual Investor Programme has published the sixth annual report on the IIP programme, revealing that up till the end of June 2019, there had been 1,054 total successful main applicants to the IIP programme since it was launched.

The IIP scheme has long been a subject of controversy in Malta, and each year the regulator publishes a report containing statistics, including the number of applications, and information as to where the applicants are from, among other things.

The recently published report read that the number of applications received between 1 July 2018 and 30 June 2019 (the latest period under review) amounted to 311. 144 of these applications came from Europe, 102 from Asia, 34 from the Middle East and Gulf regions, 16 from Africa, 8 from North America, 4 from the Caribbean and 3 from South America.

The number of dependants included in the 311 applications amounted to 758 of which 232 were spouses, 368 were minor dependants and 158 were adult dependants (either adult children or parents/grandparents).

Information was also provided in terms of the outcome of the applications, however the report states that the figures quoted in this sub-section do not tally with those recorded in terms of applications received, the reason being that there is a time-lapse during which an application is processed and therefore a significant number of the 311 applications received between July 2018 and June 2019 would still be in the initial or due diligence stage (and thus their outcome would be recorded in next year's report).

The amount of applications which were approved (i.e. applications for which the due diligence has been positively concluded and a letter of approval in principle has been issued) was 237, an increase of 14 from the previous reporting period (which stood at 223).  

In terms of applications that were not approved, which includes applications which were either rejected or withdrawn, stood at 115.

"Taking into consideration all the decisions (approvals or otherwise) taken during the period in question, it transpires that the overall rate of such unapproved applications stood at 33% of all applications. There was a significant increase from the figure recorded in the 2018 report (25%) and from the one pertaining to the year previous to that (16%). The average of all such unapproved applications for all the years since the inception of the Programme has now increased to 23%."

"Further to the above the Regulator is informed that there are additional cases in which the process, leading exclusively to an IIP application, would have started but were subsequently discontinued at pre-IIP application stage. This would either be officially withdrawn by the Agent during such pre-IIP application stage (since initial verbal enquiries with the MIIPA would have revealed that the applicant might face serious problems at an eventual due diligence stage) or would have failed the security checks carried out by the Malta Police at Residency Card Application stage. During the period in question there were 13 applications which were withdrawn at such early stage."

221 applications had reached the final stage

The report also notes that during the period in question 221 applications had reached the final stage (i.e. when the naturalisation process was completed). In total (since the launch of the Programme), up till the end of June 2019, there have been 1,054 successful main applicants.

"Considering that Regulation 12 of the current version of the IIP Regulations stipulates that the number of successful main applicants (excluding dependants) shall not exceed 1,800 for the whole duration of the Programme, the aforementioned figure constitutes 58.6% of the indicated pre-established target."

These 221 applications included a total of 768 persons (there were 547 dependants distributed as follows: 164 spouses, 263 minor dependants and 120 adult dependants.)

Property

As indicated in the IIP Regulations, main applicants are obliged to invest in a residential immovable property in Malta, either by acquiring and holding one having a minimum value of three hundred and fifty thousand euro (€350,000) or by taking one on lease for a minimum annual rent of sixteen thousand euro (€16,000). In this regard, during the period in question there were 221 properties that were either purchased or leased. Similar to previous reporting periods the vast majority of property - 92% - was leased whereas the remaining 8% was purchased. Between July 2018 and June 2019 the value of the 17 purchased properties amounted to €13,747,186, averaging €808,658 per property.

Globally (taking into consideration all the properties purchased since the launch of the IIP), the value of all purchased property (144) totals €141,374,459.33 (averaging €981,767.08 per property).

"In the case of the 204 leased properties, the rental value for the duration of the 5-year contract is projected to be €19,150,136 averaging €93,873 per contract. On an annual basis this translates into an average of €18,775 per lease. Globally (taking into consideration all the properties leased since the launch of the IIP), all 910 leased properties add up to €89,718,085.11, averaging €98,591.30 per leased property which, in turn, translates into an annual average rental value of €19,718.26," the report reads.

The report also highlights that IIP regulations require an applicant to make a minimum investment of €150,000 in Malta Government Stocks. In this regard, the amount invested in such Stocks between July 2018 and June 2019 totalled €33,751,826.03. Taking into consideration all investments made since the launch of the Programme, the total amount adds up to €159,767,368.53, the report read.

During the period under review, the contributions collected by the Malta Individual Investor Programme Agency amounted to €162,725,000.

 "When the amount of contributions collected during the period covered by this Report is added to the contributions previously collected by the MIIPA since the launching of this Programme this would result in a grand total of €834,750,000 contributions collected by the MIIPA in respect of this Programme.

Accredited agents

The total number of Accredited Agents as at the end of June 2019 now stands at 134, a decrease of 25 when compared with the amount registered a year before.

These 134 Accredited Agents were subdivided into four main categories, namely: one Concessionaire, 46 falling under the legal category, 55 under the financial fiduciary and trust category, 21 under management and consultancy, and 11 under property consultancy.