A new residence and visa program which will be introduced in the coming months is aimed at attracting more investors to Malta while maintaining current high due diligence standards, Parliamentary Secretary Alex Muscat told parliament on Tuesday February 9th, 2021.
Speaking at the opening of debate on a bill which will regulate the new program, Muscat said the current program, introduced in 2016, had enabled Malta to successfully attract talented investors. More than 2,500 applications had been received, with more than 70% of processes concluded.
Due diligence in Malta was the tightest in Europe, he said, and the number of rejections was the highest.
Still, the current program generated EUR 50,000,000 of which EUR 20,000,000 were generated last year, despite the pandemic. Up to 2019, the current program generated EUR 124,000,000 in the real estate sector, since investors needed to purchase or rent a property. 136 jobs were created directly and 290 indirectly.
A new program was however needed in view of growing competition from all over Europe and the evolving scenario post-pandemic.
The program, he told the House, is different from the citizenship by investment program.
Investors, he said, participated in residence and visa program on the basis of a country's credentials in areas such as reputation, rule of law and political stability.
The aim of the new program was to maintain the high standard of due diligence while managing to attract more applicants who could invest more.
The new program, he said, had been discussed with agents who operated it.
Although costs for similar programs have been dropping in several other European countries, in Malta tariffs will be higher because Malta offered unique advantages. Before one needed to invest EUR 30,000 and it would now be almost EUR 70,000 when one also bought a property and almost EUR 100,000 if one chose to rent. The threshold value of properties was also being raised - to EUR 300,000 for properties in the south of Malta and Gozo, and EUR 350,000 elsewhere.
Investors will henceforth also need to select an NGO to which they will donate not least than EUR 2,000.
He said the old program will expire at the end of March 2021 and be replaced by the new program.
Shadow minister Beppe Fenech Adami said he agreed with the parliamentary secretary that programs such as this were beneficial for the country. Indeed, Malta had residence programs for investors going back to the 1960s. Sta Marija estate in Mellieha had been designated to attract a certain type of foreigners, for example.
The important thing was that such schemes were operated well. Malta had good selling points such as the tax-friendly regime, the standard of living and quality of life and the safe environment. However, the sense of lawlessness in some localities needed to be addressed.
Malta also needed to remain 'affordable'.
Fenech Adami said the government should be careful not to repeat the mistakes made in the citizenship by investment scheme. Rather, it should show it had learnt from those mistakes. The mistakes included the granting of citizenship to several people, including convicted criminals, who are being sought for massive fraud, or money laundering of up to USD $1.3 billion in one case. Those cases belied the claim that Malta had due diligence of a high standard.
Reputation, he said, was key for Malta's success, and this had suffered in the past few years.
Fenech Adami said the opposition agreed with the raising of tariffs in the visa and residence scheme. The scheme in Malta needed to attract the best people and reflect high standards of decency, accountability and quality.
He said the opposition would back this bill, while continuing to insist that Malta must safeguard its reputation.
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Source: Times of Malta