Resident scheme is not working

I was not surprised to read recently in Times of Malta a story about the possible revival of a Permanent Residence Scheme for non-EU citizens. The previous government had revived it already through Legal Notice 317 for EU, EEU and Swiss pensioners, calling it the Malta Retirement Programme (MRP).

Regarding these residents, EU regulations guarantee proper compensation for treatment on the Maltese national health service. And Maltese residing in other EU countries may be treated by the local health service too. It is a complex matter.

In any case, the Government already requires that new residents are properly insured, including non-EU nationals. So, this does not apply to health immigrants, unless they reside here illegally.

After replacing the original Permanent Residency Scheme in 2001, the so-called High Net Worth Individuals Scheme became a total failure.

Malta killed a goose with golden eggs. What “fundamental weaknesses” had to be eliminated remains a question.

Greed is not the best motivator to attract foreign residents. Therefore, I predict that the new MRP will be a failure too. Former contractants will not return and new applicants will hardly turn up.

First, Malta puts a knife to applicants’ throat by asking for €2,500 in administrative fees to be paid in advance. I wonder if that amount will be paid back if the application is turned down.

Second, one is required to pay out considerable minimum expenditures for real estate, at least €800 a month in rental fees if living in Malta. This is outrageous. Beneficiaries are not free to make their “primary residence” available to anybody else. Not for one day or free of charge.

That is a serious impediment for the contractant’s freedom and privacy. I exclude of course sharing the residence with another MRP contractant. That stands to reason.

Contrary to the origional PRS, the new MRP does not allow the contractant to decide completely freely about the number of days he wants to actually stay in Malta.

That was a basic advantage compared to similar residence schemes elsewhere that Malta must compete with.

Last but not least, if one does not bring in at least over €50,000 p.a. income, the mentioned flat 15 per cent tax rate is increased. That limit used to be about €30,000. In summary, the new MRP is hardly interesting for the target group and the same would apply to a similar PRS for non-EU citizens.

You cannot have your cake and eat it. Malta should think twice about MRP conditions sufficiently attractive for both country and foreign resident.

Moreover, all those changes and different schedules will produce confusion and make their promotion complex and expensive.

Finally, one should not leave this matter more or less in the hands of the local real estate lobby.