The country is witnessing a huge investment of millions of euros in housing and healthcare, thanks to the Malta Individual Investor Programme.
There is no denying the extent of the financial benefits Malta is enjoying. Between July 2018 and June 2019, the total contributions, including property purchases, rents and investments, collected through the Programme amounted to more than €271 million. This equates to approximately 2.11% of the GDP relative to the same period. The total contribution collected since the launch of this Programme exceeds €930 million.
Out of these funds, circa €515 million was allocated to the National Development and Social Fund, the autonomous agency established for the purpose of managing and administering 70% of the contributions received from the IIP. One of the commitments the Fund made last year was a €50 million social housing project with 500 new social housing units at 22 different sites.
It also allocated €10 million for the upgrading of 8 health centres and 54 clinics. Previously, the Fund awarded a grant of €950,000 to Mater Dei Hospital’s Cardiology Department to upgrade its two catheterisation suites and €5 million to Puttinu Cares for the construction of new apartments for cancer patients and their families in London.
An additional €220 million was allocated to the Consolidated Fund, the main bank account of the government.
It’s not just investment that Malta is reaping from the scheme. The country is also benefiting from attracting a wealth of talent. In the period under review, the educational level of applicants was very high with 148 applicants having reached Phd, Masters or Degree level of education.
In his annual report for 2019, the IIP regulator reported that the number of applications received was 311, which is down19 on the previous 12 months and reflects a downward trend in IIP applications. The regulator stated that the main reasons for such decline are consistent and highly inconsiderate bad publicity, both nationally and internationally, and competition from similar programmes operated by other countries from almost every corner of the globe including Europe.
Malta adopts a very stringent due diligence process in order to make sure that only reputable applicants are admitted to its citizenship programme. The overall rate of unapproved applications between July 2018 and June 2019 stood at 33% of all applications. The average rate of unapproved applications (that is, applications that failed due diligence checks) for all the years since the inception of the Programme stands at 23%. Given that Malta’s success rate is significantly lower than that of other countries such as Hungary (98.7%), Latvia (97.9%) and the United Kingdom (91.1%), it is logical to conclude that Malta’s checks and controls are stricter.
Malta’s Individual Investor Programme (IIP) is limited to 1,800 successful investors. So far, 1,198 investor applications (66% of the quota) have been approved.
Malta’s Programme continues to remain as highly dynamic as possible, so as to attract the best applicants from around the world. During the reporting period, the applications originated from seven geographical regions. Three applications originated from South America, four from the Caribbean, eight from North America, 16 from Africa, 34 from the Middle East & Gulf, 102 from Asia and 144 from Europe. This programme provides the opportunity to understand Maltese culture and learn all about the traditions that are close to the heart of the Maltese.
When Malta initiated the Individual Investor Programme, some criticised the commoditisation of citizenship, but it is safe to say that, for Malta, the IIP is much more than that and the Maltese are garnering tangible benefits. As well as the big investments in housing and healthcare, over the past 12 months, 36 local NGOs have benefitted from 128 donations, from various applicants for Maltese citizenship. They total nearly €800,000. Among the NGOs that benefitted from these donations are the Puttinu Cares Foundation, the Malta Community Chest Fund, the LifeCycle Malta Foundation, Inspire and Heritage Malta. These are noble causes and this is a reality that is making a big difference in the lives of vulnerable people.
In his report, the IIP regulator stated that the Maltese Programme was miles ahead of similar programmes, operated by other countries. Apart from Austria, Malta is the only country to publish lists of new citizens. Malta discloses details of how much investment has been raised. Apparently, 41% of countries operating a similar programme do not. Whereas Malta takes into account an applicant’s source of funds or wealth when analysing applications, countries such as Cyprus and Portugal do not.
Despite the success and the benefits of this programme, it still attracts its fair share of criticism. We will actively welcome fresh ideas and consider changes and innovations to the Programme with a view to making it even more dynamic, more efficient and more effective.
Alex Muscat is parliamentary secretary for Citizenship and Communities