Today, foreign nationals can choose between Malta’s three investor programs and ultimately obtain a temporary or permanent residence permit, or citizenship. Which program suits your particular situation, what purposes does each of them serve, and what are the differences between them? In this blog entry, we’ll spill all the secrets, plus throw in some thorough visuals that will help you better comprehend the nuances.
Malta’s residence permit, permanent residence, citizenship: Grasping the essentials
What makes one become interested in obtaining another country’s residency status? Higher quality of life, medical and social services, better developed economy, more comfortable business management conditions are just a few of the reasons that capture the attention of high-net-worth individuals, and the desire to relocate to a more stable polity is completely understandable. We would advise you to consider one of the options put forward by Malta and exchange certain amount of investment for a residence permit, permanent residency, or a second passport.
What is a residence permit? It is a status that allows its holder to reside in the country that issued the permit. There are two types of this status in the world, and in Malta specifically:
- Residence permit (temporary residence): Allows one to reside in a foreign country for a fixed amount of time, usually from 1 to 5 years. One of the quickest ways to obtain such a permit in Malta is to take part in the Global Residence Program (GRP) that the Maltese authorities have designed for foreign investors. This case requires investing in real estate: minimum €220 thousand while purchasing, and €8.75 thousand while leasing.
- Permanent residence: Allows one to reside in a foreign country for longer periods of time, usually up to 5 years, without extending the permit, offers a slightly wider selection of benefits. Malta has the Malta Residence and Visa Program (MRVP). Similarly to the other options listed here, MRVP sees the wealthy foreign national getting the permit in exchange for a minimum investment of €290 thousand in government bonds, property lease, and government fees.
The main feature of both programs mentioned above is allowing the investor to reside in Malta all year round and travel to Schengen Area visa-free. As for the differences, MRVP costs slightly more and has to be extended every 5 years, while GRP has to be renewed once a year.
Also, by applying for the MRVP, the investor has the opportunity to obtain residence permit in other European countries via a lighter procedure.
Now, on to Malta’s citizenship. What are the benefits of the Individual Investor Program (IIP)? A holder of the Maltese passport can reside and work both in Malta, or anywhere in the European Union, with over 160 countries easily accessible via the visa-free regime. Such liberty does come at a rather substantial starting point of €800k, but opportunities for global mobility, tax planning and handling multi-national business are virtually endless.
It is not by luck or coincidence that Malta’s IIP ranked first in the Global Residence and Citizenship Programs 2017-2018 report. The country’s citizenship by investment program scored top points for ease and speed of application processing, Malta’s good name in the worldwide community, financial requirements, candidate screening, etc. This isn’t the first time Malta has ended up at the top of world’s best CBI program ranking, either, having proved its high standards in 2015 as well.
Since the government has imposed a quota of maximum 1.8k approved IIP applications (that is, a maximum of 1800 issued Maltese passports), over 1.5k applications have been approved as at October 2017. It is yet to be seen if the limitation would be lifted, or the quota increased; nevertheless, Malta’s MRVP popularity grows as the more reasonable and more simple alternative.
The cost of getting Malta’s residence or citizenship
Out of the three Malta’s programs that each offer a certain level of convenience for a non-EU resident, the GRP (a one-year extendable residence permit) is the more affordable one. To qualify, the applicant is expected to:
- Purchase or rent a government-approved real estate object. Have in mind that the property location somewhat affects the price: the minimum investment amount is 220,000 euros for an object located in Malta’s south, 250,000 euros for the island of Gozo, and 275,000 euros elsewhere in Malta; as for lease, it’s 8,750 euros for both Malta’s south & Gozo, and 9,600 euros in any other location;
- Pay the one-time administration fee of 5,500 euros for realty objects in Malta’s south & Gozo, or 6,000 euros for other locations;
- Have a European sickness insurance (covering all the applicants);
- Pay a minimum of 15,000 euros in annual tax (covers the whole family).
The permit is issued for a year. To renew it, the applicant must continuously retain the real estate for personal use only (no renting out or sub-letting), provide proof that all the previous requirements were met and will be met within the upcoming year.
What are the principal conditions of obtaining MRVP in exchange for investment?
Malta’s permanent residence requires a larger amount of investment, but the good news is that it is possible to get the most part of funds back:
- Investment in government bonds, starting from €250,000;
- Purchase or lease of real estate, starting from €270,000/€10,000 per year, respectively;
- One-time administration fee – €30,000;
- Government fee of €5,000 per person that was included in the principal’s application prior or after its approval. This last point gives Malta’s permanent residence advantage over other statuses, as newest family members may be included in the application after the the processing is over (for instance, grandchildren, new or adopted children, children-in-law).
The investor is obliged to retain the real estate objects for at least 5 years, after which they can choose to sell them or break the contract without losing the status.
Price geography: Malta’s passport
Though Malta’s citizenship is not the priciest among Europe’s citizenships, the amount of investment is quite substantial:
- Contribution to the National Economic and Social Development Fund, at a minimum of €650,000;
- Purchase of government bonds, at a minimum of €150,000;
- Purchase or lease of real estate objects, at a minimum of €350,000/€16,000 per year, respectively.
NOTE: As mentioned above, the applicant is to purchase a residential real estate object only, and it cannot be rented or sublet. Only the investor’s family is to use the property for personal purposes. Maltese government bonds can be considered profitable, providing up to 3% annually.
Maltese real estate, a smart investment
Last year, Malta’s economy has shown growth close to 5%, which is a solid significative for a European country. According to Knight Frank global consultancy firm, Malta ranks third out of the 10 countries with the fastest-growing real estate market prices (14.6% annual price increase). As for real estate rent prices, WorldFirst reports a 7% increase and places Malta second it its rating of countries where leasing property pays best. Malta’s real estate agencies report that a 30% increase in rent rates has happened within the last 4 years.
European real estate experts say the growth will continue. What is the reason for the indexes going upwards?
- Shortage of land for new construction projects. The number of those interested in purchasing real estate in Malta is building up, which prompts price changes for already completed projects.
- European quality of life. Research done by the British think tank The Legatum Institute placed Malta in top-30 countries out of 149 in its Prosperity Index.
- Malta’s unemployment rate is low, the country is constantly improving and developing its medical and social spheres.
- Stable economy. Moody’s rating agency affirmed Malta’s highest A credit ranking several years in a row.
How long will it take to finalize my new status as Malta’s resident/citizen?
Malta’s GRP usually takes 3-4 months, when applicants for Portugal’s Golden Visa program, also essentially a residence permit, have to wait for 6-8 months.
In contrast, Malta’s citizenship application processing is one of the longest among available competing offers, taking up to 14 months, with a thorough due diligence check and stricter residence requirements.
Once again, the MRVP emerges as the most sensibly-priced, least time-consuming option with less complicated conditions, though, truth to be said, one can get Cyprus residence permit within 2 months.
Malta’s residence: Unlimited travelling around the globe
As a member state, Malta enjoys the full spectrum of privileges available to the Schengen Area and the European Union countries. With Malta’s residency or passport, you will forget about travelling documents for most strategically important countries on the world map. Unlocked world borders gain you additional status points, talkless of personal and business liberties. And Malta’s passport is the ultimate signifier of global freedom, since it would allow you to reside in any EU country of your choice.
What makes Malta’s residence permits and citizenship so appealing?
Why choose Malta out of other available offers? Our answer is: There are several reasons, and aspiring foreign investors should study the impressive list of opportunities opening before them.
Interested in more detailed information about Malta’s programs? Contact us!
- We offer free consultations, understanding how important it is for the client to make the only correct decision.
- We work only in the field of investment immigration, integrating gained experience into the investor’s goal.
- We work only with official programs of the European Union and Caribbean countries.
- Before signing the contract, we inform our clients about all additional fees and expenses.
- We conduct a screening to assess the investor’s chances of obtaining the desired citizenship.
- We oversee the process at each stage and work exclusively towards the result.
- We are in touch 24/7.