Malta: Citizenship by Investment

by Lucy Duncan

Over the summer I was visited by a family who are participating in Malta’s “Citizenship by Investment” programme that aims to provide Maltese citizenship, and therefore access to the European Union and the Schengen Area, to those who are considered financially eligible (Malta Immigration, 2018). In order to be eligible for the programme applicants must be able to contribute €65,000 upfront along with investing similar values into real estate and bonds. However, this is the lowest contribution required – if the applicant is married or has dependent family members further contributions are necessary (ibid). This report will examine the reasons that both the Maltese government and aspiring citizens were eager for this scheme to be available, as well as the negative consequences of the programme as perceived by the EU. Furthermore, it will explore how the option for high and ultra-high net worth individuals to gain EU citizenship reflects an ease of transmigration for more “elite” migrants (Beaverstock, 2005).

Malta is a small archipelago consisting of three islands off the southern coast of Europe, sustaining 400,000 people (Malta Tourism Authority, 2018). Upon joining the EU in May 2004, the significance of being a citizen of Malta increased as Maltese citizens were able to access 182 countries without a visa, making it the 7th most desirable passport in the world (Visa Restrictions Index, 2018). 10 years after joining the EU, the Citizenship by Investment programme was officially functioning and has provided approximately €162.5 million (Chetcuti, 2018) through investment alone (this is assuming each of the 1000 applicants provides only the minimum of €65,000). To an economy that is largely reliant on tourism, a shipment refuelling trade that is diminishing due to increasingly longer range ships, and industry centred around electronics and textile, the extra capital generated from the programme is vital for sustaining high quality of life and maintaining its status among 32 other countries as an “advanced economy” (IMF, 2018). Clearly providing economic advantages to the country, the programme continues to be considered successful by the Maltese government as they retain control over the acceptance of applicants, allowing the rejection of any persons considered to pose a potential threat to the economy or security of Malta; the government asks for 4 different types of data to ensure a clear criminal record as well as medical records to be certain that individuals will not be a drain on resources (Malta Immigration, 2018). The benefits to those applicants with sufficient funds to make the program feasible are obvious; EU citizenship to allow the right of establishment in any of the 28 EU countries, the opportunity to relocate business affairs to an EU country, and Visa-free access to 182 countries and states. The rights to study, live and work in the EU are also passed down to all future generations of the families which is cited as a major incentive by many of the programme’s participants (ibid). 

While citizenship can be taken at face value and defined as simply a legal, political and social status which provides rights such as voting, freedom and welfare within a certain community (Clarke, 1993), it has previously been a concept produced by partaking in social practices and in the day to day exchange of commodities that sustains communities (Mansvelt, 2008). In today’s society the term citizenship often takes both of these definitions, implying at least some social integration into a community; in the UK applicants have to take and pass a citizenship test that includes knowledge on the country’s history and traditions (Zile, 2016, cited in Cooper, 2016). In the citizenship by investment programme, however, integration is by no means required and the Malta Immigration website even states that there are advisors on the scheme that are trained in “assisting non-English speaking clients” (Malta Immigration, 2018). In this case, it is clear that citizenship is taken to include simply the legal implications of the definition and no integration into the country and overall community is necessary. This is claimed to be potentially damaging to the transnational space that the EU has attempted to create as the immigrants are unlikely to have any real connection to the communities they live in. Critics of the programme suggest that the scheme could pose some security threats to both Malta and the EU as it can and has been used (particularly by Russians) simply to bypass sanctions imposed on certain countries. Furthermore, some argue that the scheme undermines the concept of European citizenship (Cooper, 2016). However, contrary to this, it may be argued that the EU does not provide a truly transnational space as the majority of its citizens continue to align themselves primarily with their nation-states and, while borders may be frequently crossed, social bridges are not usually created (Struver, 2005).

Furthermore, the scheme highlights an already apparent trend in transnational movement whereby elite or highly skilled workers face far fewer barriers, and often much more encouragement, when migrating globally (Beaverstock, 2002). By allowing people to essentially buy citizenship, Malta is ultimately encouraging this divide as the opportunity for citizenship is only available to those with enough money. Along with much of the increased movement of the wealthy elite, Maltese citizenship brings into question how transnational these people actually are. By defining transnationalism as living “stretched across borders” including “multi-stranded social relations” (Basch et al, 1994), it is difficult to view those who achieve citizenship through investment as truly transnational; there tend to be few links between a place of origin and settlement as scarcely any applicants actually live for any significant period of time in Malta and there tend to be no emotional ties created (Cooper, 2016).

In conclusion, the “Citizenship by Investment” scheme in Malta is mutually beneficial for the government and successful applicants as it provides the former with increased income with minimal effort, and the latter with full use of the resources of the EU and access to numerous other countries. However, the programme is criticised for its lack of integration efforts and brings into question the transnational status of the migrants and the suitability of giving them the status of an EU and Maltese citizen. However, Austria also provides a Citizenship by Investment programme (with access to 184 countries visa-free) meaning that criticism is highly unlikely to cause any cancellation of the programmes (Visa Restrictions Index, 2018).

 References

 Beaverstock, J. V. (2005) Transnational elites in the city: British highly-skilled inter-company transferees in New York city’s financial district. Journal of Ethnic and Migration Studies, 31, 245-268.

 Chetcuti, J., 2018 Malta Citizenship by Investment. Chetcuti Cauchi Advocates [online] <https://www.ccmalta.com/publications/malta-citizenship-investment> [Accessed 10 September 2018]

 Clarke, p. (ed.), 1993. Citizenship: A Reader.

 Cooper, H., 2016. Malta slammed for cash-for-passport program. Politico [online] <https://www.politico.eu/article/malta-cash-for-passports-program-individual-investor-programme/> [Accessed 10 September 2018]

 Henley and Partners, 2018. Passport Index. Henley and Partners Group Holdings Limited [online] <https://www.henleyglobal.com/files/download/HPI2018/PI%202018%20INFOGRAPHS%20GLOBAL%20180518.pdf> [Accessed 10 September 2018]

 Malta Immigration, 2018. Citizenship by Investment Malta. Malta Immigration Citizenship by Investment Programme [online] Available at: <http://www.maltaimmigration.com> [Accessed 20 August 2018]

 Malta Tourism Authority, 2018. Modern Malta. VisitMalta [online] <https://www.visitmalta.com/en/home> [Accessed 10 September 2018]

 Strüver, A. (2005) Spheres of transnationalism within the European Union: on open doors, thresholds and drawbridges along the Dutch-German border. Journal of Ethnic and Migration Studies, 31, 323-343.

 

 

 

 

 

 

 

 

 

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