There is no doubt that the controversial Individual Investor Programme will become law. The Government has a nine seat majority and may bulldoze the Bill through. The Government is dead set on it. It is not clear, however, whether it is dead set on its original form or whether it will take heed of advice to make some fundamental changes.
The controversy has not emerged from the usual government-opposition squabbles but there are to my mind very legitimate questions about the implementation of this programme.
The Individual Investor Programme (IIP) seems to be a simple transaction: you give me €650,000 and I will give you citizenship.
However, in the light of today’s geo-political complexity, citizenship should not be that simple. Anything connected to migration is not straightforward. Residency is not straightforward and neither are work permits.
The finish line is preceded by a number of hurdles before one is allowed into the global residence programme or for one to obtain a work permit. The criterion in both is a genuine link with these islands.
The reality is that these individuals are not interested in Malta, the Maltese or the Maltese economy
The IIP is being promoted as a win-win scheme which will bring to Malta many riches and rich people in our midst. But will it?
Certainly the fee for one to obtain Maltese citizenship is hefty and according to the Government’s calculations, over 40 individuals will be more than ready to go for Maltese citizenship. This will contribute €30 million to Malta’s coffers. Is there any more? Not necessarily. IIP is not tied to anything else. Not to residence, not to investment, not to community contribution.
Therefore, technically an individual who is interested in obtaining a Maltese citizenship may merely apply and that’s all.
There is no fiscal incentive in this programme. As thousands of other Maltese citizens who work and live abroad, they do not pay any taxes in Malta because they are not domiciled in Malta. Therefore, IIP beneficiaries need not pay one cent to the Maltese income tax department.
Furthermore, the impression that these new Maltese multimillionaires will buy up the upmarket real estate may not be correct. These may remain in Mayfair, Paris and Milan and avoid the visa section when they want to travel to Capri and Nice to sip champagne in the Mediterranean sun. There is no need for them even to visit Malta, apart from the initial interview. Even here it is not sure if interviews will take place in Malta.
The Chosen Ones have offices in Vienna, Antwerp, Quebec, Nicosia, Hong Kong, Amsterdam, London, just to mention a few and therefore, their staff may do all the travelling at application stage.
The reality is that these individuals are not interested in Malta, the Maltese or the Maltese economy. They made their millions elsewhere. This is a simple transaction. All they are interested is in citizenship, pure and simple. If they were interested in the Maltese economy they would visit the Malta Enterprise offices, not those of Henley and Partners.
There is undoubtedly a market for EU Malta citizenship. But where is this market? One market could be made up of third-country nationals who already operate in the EU but are legal aliens at law. They may have strong roots, financial or family, in the EU, so the Maltese IIP would give them an opportunity to complete their settlement in the bloc if they can afford it.
There is another market for those who operate in volatile jurisdictions and need a safety net when things get hot under the collar. EU citizenship would be magic because if the need arose, the person and his or her family would have the right to relocate quickly to the EU, even if questions were asked.
The Leader of the Opposition has warned that once in government it may withdraw passports from IIP beneficiaries. The Attorney General in a rare move disclosed his advice to the Government, saying that this would be unconstitutional. Although legal experts may beg to differ, Prime Minister Simon Busuttil would certainly face legal difficulties, especially if an individual has renounced a previous citizenship to obtain a Maltese one. An individual cannot be stateless.
But such a legal position should not calm the waters and give an even stronger green light for the Government to go ahead.
The fact that in certain cases the situation is irreversible puts more of an onus on the Government to come up with a more acceptable structure.
A structure that does not depend on a private operator’s internal Chinese wall procedures, a structure which and does not depend on one salesman. More importantly, a structure that allows a genuine link between the Republic of Malta and its new citizens that goes beyond a financial transaction.