Deadlines looming as Maltese citizenship scheme nears cap, but extension expected

DOI - Kevin Abela

Those looking to buy their way into EU citizenship through Malta have just one month to sort out residency plans as the government’s Individual Investor Programme is close to reaching its stated cap of 1,800 applications.

Applications for citizenship under the IIP can be made until the end of September, but applications for residence under this programme will only be accepted until the end of July. However, the government is already planning to extend a programme which, while controversial, has proven to be an important source of revenue.

The IIP had been introduced by the Joseph Muscat government in 2014, with Henley & Partners pocketing commissions as concessionaires. Though Henley had lobbied for the programme’s introduction prior to the 2013 election – with both major Maltese political parties – the programme was not included in Labour’s electoral manifesto.

It proved controversial from the outset, with critics deriding it as the base sale of EU citizenship to people who neither have nor will develop any genuine links to Malta. Though residence is a requirement, little appears to be effectively required beyond owning or renting a property in Malta, with former Identity Malta chairman Jonathan Cardona once quoted as stating that people would be fooling themselves if they believed that the new Maltese citizens were going to actually move to Malta.

The European Commission remains wary, with then-Justice Commissioner Věra Jourová emphasising last year that it did not endorse the scheme. However, it had originally contemplated infringement proceedings against Malta before being satisfied that applicants would have to be effective residents of Malta, despite residency requirements remaining vague to the point of being non-existent.

Government favours extension

But the IIP has provided a strong boost to government revenues, and prior to Muscat’s resignation in the face of anti-government protests last year, his government was all but set to extend the scheme once the cap was reached.

During the ensuing leadership contest, Fearne was quoted as saying that he would not reinstitute a form of IIP once the limit was reached until it was discussed with European institutions, to ensure that it did not dent Malta’s international reputation. However, Robert Abela was adamant that he would keep the programme, and along with Parliamentary Secretary for Citizenship Alex Muscat, he repeatedly touted the programme’s financial benefits.

The huge dent in government revenues – and corresponding steep rise in expenditure – resulting from the Covid-19 is also likely to impact the government’s considerations, and as such, the extension of the programme appears to be all but assured. It remains to be seen, however, whether the same conditions would apply.