Important factors to consider in residence planning
Malta’s Individual Investor Program (IIP) has received more than 400 applications from more than 40 nations and demand is set to remain strong in 2015, say leading advisors and agents.
The IIP citizenship program has already attracted more than €450million (US$530million) in Foreign Direct Investment since its launch in early 2014 and the country is now starting to see added benefits, says Henley & Partners.
Applicants applying for citizenship have to invest at least €350,000 on a property for at least five years or rent an immovable property for a minimum €16,000 a year over the same time period. They also have to contribute €650,000 to Malta’s National Development and Social Fund and fulfil other investments and obligations.
Andrew J. Taylor, Vice-Chairman of Henley & Partners, says, “The level of interest remains strong and we are pleased to see that many of the early applicants are now starting to make ancillary investments (outside of the Individual Investor Programme) within the country. This will lead to further increased inward investment and the future creation of employment in Malta.
“The main geographic areas from which applicants originate are the MENA Region, Russia and China & South East Asia, yet the interest and applications to date are very broad based, and now cover over 40 different nationalities.”
This foreign direct investment, made up of real estate as well as deposits, bonds and other elements, is the equivalent of around €8.5million (US$10million) per week.
The first letters of citizenship approval-in-principle have been issued, and the first applicants will be issued with their certificates of naturalisation soon after their contribution, investment and residency requirements are fulfilled.
The Prime Minister of Malta, the Hon. Dr. Joseph Muscat, speaking at a Henley & Partners Seminar at the Malta High Commission in London in late 2014, says, “Success lies in innovation. We believe that the concept of citizenship is fast evolving, and we want to be at the forefront of this innovation. That is why we came out with the ground-breaking Individual Investor Program, the only citizenship-by-investment program which is sanctioned by the European Commission.
“It can be explained in one word: talent. We want to enhance our competitiveness by increasing our talent pool and by increasing our global network. We believe that these are the new borders of a brave new world.”
The IIP is aimed at ultra-high net worth individuals and families worldwide and is marketed internationally by Henley & Partners for the Government of Malta.
Mr Taylor says, “Our firm understands the finest details of the IIP because we designed and created it with the Government of Malta.”
Leading agent, Frank Salt Real Estate, Malta, says it has seen growing demand for overseas investors to purchase property for permanent residency or citizenship.
Marketing Manager, Nick Bilocca, says in 2014 getting on for half of its clients (46%) were foreigners with around a third looking for property connected with the IIP and other schemes.
Most demand came from wealthy Russians and the political unrest in the country increased their urgency. There was also high demand from Middle Eastern clients and some from Chinese investors, although not as much as expected.
Other interest came from the United States, Canada, India and Eastern Europe. Frank Salt expects that there will continue to be strong demand in 2015.
The IIP grants citizenship to qualified, reputable foreign individuals and families who make a significant contribution to the economic development of Malta. The program has strict Due Diligence standards.
The program intake is limited to 1,800 main applicants, after which the program will close, making this the most exclusive program in the world.
Henley & Partners says it created the concept of residence and citizenship planning in the 1990s. The firm also runs a leading government advisory practice. It has raised more than US$4billion in foreign direct investment and been involved in strategic consulting as well as the design, set-up and operation of several of the world’s most successful residence and citizenship programs.
Malta has just been named one of the world’s top10 retirement destinations in 2015. It was placed seventh in InternationalLiving.com‘s Annual Global Retirement Index due to its warm weather and low crime rate.