The suspension of the Permanence Residence Scheme in January has created uncertainty in a previously flourishing market, the Labour Party said yesterday.

The scheme, which was designed to attract wealthy foreigners to take up permanent resident status in Malta so that they would invest their wealth in the local economy, was suspended in January after the Finance Ministry said it found a level of incorrectness and abuse of the system.

“The fact the government suspended this scheme without having a viable alternative is a symptom of a tired government incapable of reacting to situations encountered in the administrative process,” Labour spokesman for Economic Development Charles Mangion said.

“It is a situation which breeds uncertainty, gives prospective international investors a bad impression of the country and undermines the national effort to raise the profile of our country as one offering stability and continuity in the financial services sector and similar services,” Dr Mangion said.

The local retail estate industry had promoted the scheme as being among the most generous in the world, with benefits including a flat tax rate of 15 per cent on income brought into Malta.

At the time of suspension, the Finance Ministry had said the scheme was being reviewed so that it could be re-launched along the lines of its original intention to attract wealthy foreigners and investment to Malta.