A high net worth individuals scheme was launched by Finance Minister Tonio Fenech this morning to replace the permanent residence scheme, which was suspended abruptly at the beginning of the year.
Mr Fenech said the new scheme will not attract people to come here simply to buy property but people who would also contribute to the local economy.
Under the new rules, the property bought by foreigners had to be worth a minimum of €400,000, up from the previous minimum of €116,000.
Moreover, people buying property under the new scheme had to spend a minimum of 90 days per year living in Malta.
Mario Borg, from the Inland Revenue Department, explained that there were going to be two sets of rules, one for EU nationals and one for third country nationals.
EU nationals had to spend a minimum of €400,000 on the property or €20,000 a year in rent.
They had to have health insurance recognised across Europe and pay an application fee of €6,000 to cover fees the government will be incurring through a sub-contracted international firm to do the 'fit and proper' test to check whether the applicant is 'desirable'.
The application forms can only be submitted by Maltese warrant holders registered with the inland revenue department as authorised people.
They had to reside in Malta for a minimum of 90 days per year and pay 15 per cent tax on foreign income and normal tax on any local income. The minimum tax payable was €20,000 a year and €2,500 tax per dependent.
Non-EU residents also had to keep renewing their visa every three months or enter into a contract with the government with a financial bond of €500,000 and €150,000 per dependent, to effectively purchase permanent residency after five years, when the money will become the government's.
Their minimum tax payment will be € 25,000 a year.
Existing permanent residents, Mr Borg said, will not lose their status unless they sold their property.
Applications received or copies of promises of sale signed before yesterday and which were not processed because the scheme was suspended will have the €6,000 application fee waived.
Mr Fenech said that the previous scheme was designed 25 years ago and it was being abused.
There were people who purchased property and never visited. These were not contributing to the economy. There were also situations of people, Chinese, renting property to each other. The biggest problem was that the scheme was being marketed wrongly with some even promising EU citizenship.
Its name had been creating legitimate expectations under EU laws on what it meant to be a permanent resident. It also meant that people who purchased property were entitled to other rights given to Maltese citizens.
The potential future liabilities were great and detrimental to the country. The situation had not been acceptable and although nine months to come up with a new scheme was a long time, a scheme that was in Malta's best interests had now been drawn up.
Mr Fenech said that there is going to be a rigorous process and strict control measures to ensure that people attracted to Malta are 'desirable'.