The sale of Maltese passports has been marred with controversy ever since its inception. The scheme was not well received by several countries within the European Union and hence had applied a lot of scrutiny. Another argument brought up against this scheme is one related to identity, whereby many complained that Maltese citizenship was being made available to those who could afford it.
In order to ensure that those who acquire Maltese passports make a positive societal and economic impact, a number of criteria were established for these high net worth individuals. One requirement is that such individuals are to undertake a one-year residency period.
It has been recently reported that such millionaires would spend an average of sixteen days in Malta. This has been revealed through a cache of Henley & Partners documents. It is believed that there is a loophole which can be followed to avoid adhering to the one-year residency period. The timeframe could be reduced if such millionaires join a local club, donate to charity, buy a yacht or subscribe to a newspaper.
It is believed that some of these high net-worth individuals had flown out of Malta within a day after they took their oaths swearing allegiance to Malta, its constitution and citizens. In a number of cases, these millionaires would fly out after their physical presence is no longer required. This means that after they open their bank account and sign all the paper work, they would immediately fly out.
The regulator of the citizenship scheme had highlighted that there is no specific metric to monitor and enforce residency as required.
This residency period is an important criterion in building a proper link with the country, and thus not devaluing the relationship to just a few transactions. It is stated that without this genuine link, the European Union’s core principles are being breached.
It is also reported that Identity Malta had advised Henley & Partners to instruct clients to steer away from just the absolute bare minimum in terms of their citizenship requirements, as difficulties would arise if noticed by the regulator.
In certain instances, correspondence shows that the applicants were not interested in seeing the property they are renting, solely looking for the least expensive option that matches the program requirements. In similar circumstances, a power of attorney service is provided, which means that the residents would not need to step into the property that they are renting.
Whilst the scheme is indeed controversial in its own right, it also brought about several benefits for the Maltese community. In a time where the whole world is going through an economic contraction, the additional funds brought about by this scheme have played a contributing role in cushioning the impact in Malta, with the country being dubbed as amongst the first to exit the crisis.
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