Corruption claims on the sale of Maltese passports has dented the reputation of the scheme, according to research carried out by the Financial Times, but the country still managed to climb up one place in the rankings.

The conclusion stems from a detailed comparative analysis among 13 countries that offer citizenship through investment programmes. Known as the CBI Index, this exercise ranked Malta’s so-called Individual Investor Programme in eighth place with a host of Caribbean countries dominating the top end of the table.

Compared to 2017, Malta gained one place.

The evaluation was based on seven key indicators with Malta scoring full points in the freedom of movement index due to its EU and Schengen Area membership.

This translated into access to 19 top business centres and more than 180 destinations without a visa or with a visa-on-arrival.

The highest score was also obtained for the due diligence process in place for the IIP, which was based on the ability to perform background checks on applicants.

Another key indicator in which Malta placed top of the list, together with Austria, was the standard of living index. 

The highest score was also obtained for the due diligence process in place for the IIP

The study also drew comparisons on the ease of processing applications. Though Malta fared relatively well in this aspect, the mandatory purchase or rental of property dictated by the IIP conditions resulted in hefty paperwork, which, in turn, made life more complicated for applicants.

Despite these positive indicators, Malta’s overall position suffered in view of the low score obtained in three areas.

From a financial perspective, the island’s programme was deemed rather expensive with the main applicant having to fork out at least €880,000, nine times that of Dominica and St Lucia, which are selling passports for €100,000.

In this respect, only Austria and Cyprus have a costlier programme.

Malta fared worst in the mandatory travel or residence indicator due to the IIP’s so-called “genuine link”.

This states that the main applicant must prove to have resided in Malta for a period of 12 months before the certificate of naturalisation is issued. In view of this, Malta’s scheme was perceived as being too stringent.

In Antigua and Barbuda the residence requirement is just five days in five years.

This affected the score obtained for the overall time needed for the application to be processed. While in Dominica and Vanuatu it takes less than two months to obtain citizenship, in Malta the process lasts over a year though not as long as in Austria and Bulgaria.

Looking at the overall picture, the IIP obtained an overall score of 63 per cent, which translated to eighth place.

Dominica topped the list with 90 per cent as Cambodia placed bottom with 53 per cent.

In its concluding remarks, the report notes that Malta “suffered” from low scores in a number of key indicators due to the “reputational damage” suffered as a result of the IIP being singled out for investigations by global anti-corruption groups.

During last year’s election campaign, the passport scheme was at the heart of allegations of kickbacks involving the Prime Minister’s chief of staff, Keith Schembri.

Simon Busuttil, who was then leader of the Opposition, had claimed to be in possession of documented evidence showing that Mr Schembri had received commissions to the tune of €100,000 on the sale of passports.

Mr Schembri denied Dr Busuttil’s allegations which are now the subject of a magisterial inquiry.

Overall passport schemes ranking

Source: A guide to global citizenship – The 2018 CBI Index, FT Specialist