Updated Guide to Malta Citizenship by Investment in 2024

The island country of Malta has long been a destination for people the world over. With approximately 500,000 people and a size of 122 square miles, it is a tiny country, yet it has so much to offer.

If you have been looking for a way to improve the value of your passport and gain access to more countries through visa-free travel, investing in Malta is a unique way to do so. There are significant benefits to owning a Maltese passport, and by investing in the country, you can have one, too.

Key Takeaways

• The Malta Citizenship by Investment program, updated in February 2023, requires significant economic contributions in return for citizenship. It also provides dual citizenship and offers visa-free travel in many countries.
• Eligibility criteria for the program include being 18 years or older, meeting investment requirements, and passing extensive diligence checks to ensure credibility and a clean criminal record. The program has different investment options and includes a thorough application process with stringent due diligence checks.
• Advantages of obtaining Malta citizenship include visa-free access to 186 countries, the right to live, work, or study anywhere in the EU, a high-quality living environment, and favorable tax implications for investors.

Understanding Malta Citizenship by Investment

The Malta Citizenship-by-Investment program, formally known as Naturalization for Exceptional Services by Direct Investment, is a program developed by the Maltese government to attract investors. It provides an opportunity for international individuals, including American investors, to obtain Maltese citizenship.

Considered the most exclusive Citizenship by Investment program globally, it requires a substantial economic investment in Malta. The program, acknowledged as the Individual Investor Program (IIP), was most recently updated in February 2023.

One advantage of this program is that Malta offers dual citizenship. This means that you can retain your original citizenship while reaping the benefits of being a Maltese citizen. The Malta passport, also known as the Maltese passport, is seen as a ticket to the world.

Key Features of the Program

The Malta Citizenship by Investment program requires a contribution to the National Development and Social Fund, purchasing of stocks or bonds that are sanctioned by the government, and a real estate investment. This combination of financial commitments ensures that the investment benefits both the country and the investors.

The program offers a lot of flexibility in terms of the real estate investment. Investors can choose to lease residential real estate with a minimum annual value of €16,000 for at least five years. Alternatively, they may purchase a property for a minimum value of €700,000 to be retained for the same duration.

In addition, a donation of €10,000 is required to be made to a registered non-governmental organization or society approved by the Community Malta Agency.

How It Differs from Other Programs

The Malta Citizenship by Investment program holds an edge over many other similar programs. The program enables investors to:

• Conveniently reside and work in the country
• Enjoy the benefits of being part of the European Union
• Experience a stable political environment
• Be part of a growing economy
• Access reliable banking institutions

These advantages are appealing to investors from all over the world.

Malta also offers a Permanent Residence Programme (MPRP) which grants permanent residency without citizenship but the Citizenship by Investment provides a path to citizenship.

Eligibility Criteria for Malta Citizenship by Investment

To be eligible for the Malta Citizenship by Investment program, there are certain criteria that applicants must meet. Applicants must be at least 18 years old and meet the investment criteria, including property investment and a donation to an approved group.

The Community Malta Agency conducts thorough due diligence on applicants, including:

• extensive background checks
• validation of legally inherited capital
• ensuring a clean criminal record
• assessing good character
• evaluation of personal documents like birth and marriage certificates.

Personal Background Requirements

The personal background checks for Malta Citizenship by Investment are stringent and comprehensive. Applicants must have a clean criminal record to be eligible. A background check is conducted on all applicants regardless of investment ability.

Financial Requirements

The financial requirements for the Malta Citizenship by Investment program are some of the largest in the world. Investors must invest a minimum of €600,000 with a residency period of 36 months, or alternatively €750,000 for a residency period of just 12 months, to qualify for Maltese citizenship. Each additional dependent included in the citizenship application requires an additional investment of €50,000.

Eligible investments for the Malta Citizenship by Investment program include:

• A €700,000 minimum investment in real estate
• Leasing of property with an annual rental value of at least €16,000
• Investing in government-sanctioned securities

The Application Process: Step-by-Step Guide

The process of Malta citizenship by investment includes the following steps:

1. Initial preparation phase (2 months): This phase involves gathering documents and applying.
2. Processing time (about 4 months): Application and background checks are reviewed.
3. In Principle Approval: After the processing time, the applicant receives an In Principle Approval.

Applicants can utilize a fast-track option, which enables them to obtain a Residency Card within 1-3 weeks, expediting the residency part of the process. The final steps include compliance with the investment, donation, and property requirements, which typically take approximately 4 months, followed by citizenship approval.

Preparing the Application

During the preparation phase, applicants need to arrange for documents to be signed by a Maltese Consul. Applicants can give power of attorney to a lawyer to act as their legal representative or agent in the Malta Citizenship-by-Investment application. Doing so makes the entire process quicker and easier.

Required legal documents must be provided by applicants, which include police criminal records and proof of the source of funds and wealth. The Eligibility test is a crucial step in the Malta citizenship application process that determines whether an investor’s application will be approved or not.

Submitting the Application

Applicants for Malta Citizenship by Investment must:

• Contribute financially to the National Development and Social Fund
• Support a charitable organization with a donation
• Purchase or lease property in Malta

During the application process, applicants need to maintain residency in Malta, which can be for a period of 12 or 36 months, depending on the investment amount.

The application process for obtaining a license involves several steps:

1. The involvement of a licensed agent who acts on behalf of the applicant.
2. Several tiers of due diligence that check the accuracy and completeness of the application.
3. Thorough background checks are conducted by the Community Malta Agency.
4. Any discrepancies or false information can lead to the rejection of the application.

After fulfilling all requirements, the applicant is invited to Malta to take the Oath of Allegiance, which is followed by the receipt of the Certificate of Naturalization and the Maltese Passport.

Obtaining Residency and Finalizing Citizenship

Obtaining residency is a prerequisite for applicants, which can be expedited through a special option that processes a Residency Card within 1-3 weeks. There is then a 12-month waiting period that is necessary to complete the naturalization process and become eligible for citizenship.

Finally, to maintain Maltese citizenship status, new citizens are required to have a residence in Malta for at least five years from the date their citizenship is granted.

Advantages of Malta Citizenship by Investment

The Malta Citizenship by Investment program offers many advantages, including:

• One of the most valuable passports in the world
• Visa-free travel and automatic access to the Schengen Area
• The ability to live, work, or study anywhere in the European Union
• Enjoying all European passport privileges

In addition to these benefits, Malta Citizenship by Investment offers:

• Excellent business opportunities
• A high-quality living environment
• Clean air
• Property rights
• Freedom of speech
• Modern infrastructure, robust internet services, and secure banking

Visa-Free Travel Opportunities

The Maltese passport ranks as the 12th best passport in the world according to the Nomad Capitalist Passport Index. The Malta Citizenship by Investment program offers visa-free travel to 171 destinations and provides citizenship within 12 to 36 months.

A Maltese citizenship holder, obtained through the Maltese Citizenship Act, enjoys visa-free travel to 186 countries, covering various global regions such as:

• the Middle East
• Africa
• Asia
• most countries in North, Central, and South America

Dependents included in the Malta Citizenship by Investment application can also take advantage of visa-free travel to the same 186 countries, including the United States and Canada.

Access to the European Union

Access to the European Union is another significant advantage of Malta Citizenship by Investment. Maltese citizens can enter and move freely within the 26 countries that form the Schengen Area. This freedom extends to living, working, or studying in any EU country, too.

Family members included in the Malta Citizenship by Investment also gain the right to live, work, or study within the European Union.

Quality of Life in Malta

The quality of life in Malta is one of the top reasons why many choose to apply for Malta Citizenship by Investment. With clean air, property rights, freedom of speech, and modern infrastructure, the country offers an ideal living environment. The benefits of the Malta Citizenship by Investment program include:

• Access to the highly-ranked Maltese healthcare system
• Living in one of the safest countries in Europe
• A secure environment, making it an ideal place for raising children

Tax Implications of Malta Citizenship

Malta’s taxation system is designed to be investor-friendly, with specific rules concerning maintaining residence. Investors are entitled to a credit against Maltese tax liabilities for any taxes paid abroad, preventing double taxation and financially benefiting those with cross-border investments.

Returns on foreign investments, as well as the capital, can be brought back to Malta without additional taxes, providing a clear financial incentive to invest internationally.

Malta’s Tax System

In Malta, personal income tax is based on a residency and domicile system. Here are the key points:

• An individual who spends more than half a year in Malta is considered a tax resident.
• Those whose permanent home is in Malta are deemed domiciled there.
• Non-domiciled residents of Malta are taxed only on income and capital gains arising in Malta and on income arising outside Malta that is remitted to the country.
• Non-residents in Malta are taxed solely on their Maltese-source income and capital gains.

Personal income tax rates in Malta are progressive up to 30%, while capital gains are considered taxable income. Malta offers tax exemptions on property sales after a mandatory 5-year holding period and does not impose inheritance, real property, net wealth, or municipal taxes.

For more on Malta’s tax system from the official website see this link.

Tax Benefits for Investors

In terms of benefits for investors, Malta offers numerous investment tax credits and special tax incentives, including:

• Tax benefits administered by Malta Enterprise to various industries
• Incentives for the use of special-purpose vehicles
• Tax credits, cash grants, and subsidies on loan interest rates

Start-ups and investors benefit from schemes like the Malta Government’s new grant schemes for enhancing SME competitiveness and the Seed Investment Scheme. This offers a 35% tax credit on qualifying investments.

Family Inclusion in Malta Citizenship by Investment

One of the attractive aspects of the Malta Citizenship by Investment program is the inclusion of family members. Eligible dependents include:

• Spouse
• Children younger than 18
• Dependent children up to age 25
• Parents and grandparents over 55

Immediate family members are also eligible for Malta citizenship, and applicants can pass on their citizenship to their children.

In order to include family members in the Maltese citizenship process, the primary applicant and any dependents must first apply for a Maltese residence card. Then, a donation of €50,000 is required for every dependent acquiring citizenship.

Benefits for Dependents

Dependents included in the Malta Citizenship by Investment application also enjoy numerous benefits, including:

• Access to Maltese public schools and universities
• The opportunity to receive quality education and pursue academic aspirations
• Free education at the University of Malta for dependent children who are Maltese citizens

Due Diligence and Compliance

The Malta Citizenship by Investment program is known for its rigorous due diligence and compliance procedures. Malta has introduced a stricter due diligence process and other requirements for its Citizenship by Investment program.

Due Diligence Process

A four-tier due diligence process is paramount to Malta’s approach, featuring multiple levels of checks to detect any potential problems.

Each candidate’s financial resources and wealth are rigorously evaluated during the due diligence process, which also includes extensive source of funds and background checks.

Any detected false information within the application can lead to its denial, so taking the time to ensure accuracy is imperative.

Ongoing Compliance

Ongoing compliance is another significant aspect of the Malta Citizenship by Investment program. Investors are required to sign an annual declaration confirming they have retained the investment that initially qualified them for citizenship. Maintaining a genuine link with Malta is obligatory for citizens who have gained their status through investment.

Citizens must report any significant changes, and non-compliance may lead to revocation of citizenship under the regulations of the Malta citizenship program.

The Maltese government also conducts periodic audits that can trigger consequences for non-compliance, ranging from penalties to citizenship revocation.

Alternatives to Malta Citizenship by Investment

While the Malta Citizenship by Investment program offers a wealth of benefits, it’s worth noting that there are similar programs in other countries. These include the Portugal Golden Visa and the Cyprus Citizenship by Investment. Countries worldwide with investor programs aimed at attracting foreign investments include Portugal, Spain, Greece, St. Kitts and Nevis, Antigua and Barbuda, Dominica, and Turkey.

European countries with residency by investment programs include Greece, Spain, and Portugal—each with its unique benefits and investment requirements.

Portugal Golden Visa

The Portugal Golden Visa program was launched in 2012, offering a pathway to residency. Investing in real estate is a mandatory step to achieving residency in this program. As of November 2021, the Portugal Golden Visa program has attracted over €6.2 billion euros in investments from over 10,000 investors.

Cyprus Citizenship by Investment

Cyprus had offered a Citizenship by Investment program that was aimed at high net-worth individuals but has now been discontinued. It enabled investors to gain citizenship through:

• real estate investments
• government bonds
• Cypriot businesses
• a combination thereof

Summary

The Malta Citizenship by Investment program has a number of unique benefits, but its requirements as well as the application process can be expensive and difficult to navigate.

The program offers a unique opportunity to acquire one of the most powerful passports globally, providing visa-free travel to 186 countries, access to the European Union, and a high-quality living environment. Although it is not the easiest citizenship to attain, the privileges and opportunities it offers are well worth it for many people.

Frequently Asked Questions