Malta – an Oasis of Opportunities
Maintaining the integrity of Malta’s economic citizenship programme is perhaps the greatest challenge that the country faces, writes Parliamentary Secretary for Reforms, Citizenship and Simplification of Administrative Processes Julia Farrugia Portelli.
Faced by political and socio-economic instability in their countries, a growing number of wealthy private individuals are looking at investment migration as a way of giving themselves, and their immediate family members, the opportunity to live a better life in a more stable environment.
Nowadays, more high-net-worth individuals are seriously weighing their options of resorting to global mobility in order to expand their business interests.
This created an economic niche for residence and citizenship-by-investment programmes. Countries like Malta, which have embraced this opportunity, are attracting a wealth of talent and economic prosperity.
Yet, despite this win-win situation, these programmes attract their fair share of criticism. When Malta initiated the Individual Investor Programme, some criticised what was only viewed as the commoditisation of citizenship, but it is safe to say that for Malta, the IIP has been much more than that.
Malta’s Value Proposition
We took up this challenge and turned it into an opportunity, by designing a programme that is intended to take Malta to the world, to expand our horizons and bring to Malta people not only willing to invest, but who believe in our potential despite the fact that we are a small island nation.
Our island has a lot to offer – Malta’s geographical position makes it the ideal location for business firms to conduct trade between Europe and North Africa.
Over the last five years, we have attracted foreign direct investment from all around the globe, ventured into new industry sectors and are now fully focused on becoming a leader in digital innovation technology; already being the first to push forward a regulatory framework for Blockchain technology.
Malta is experiencing an unprecedented economic boom, with GDP growth surpassing that of the big guns in the EU, the first budget surplus in a generation and an all-time low unemployment rate of 3%, which is lower than that of Germany.
However, our biggest strength lies in our people – our ambition, determination and can-do attitude are attributes that we know will continue to attract foreign investors to our country.
The residence and citizenship-by-investment programmes will help to further strengthen our pool of talented people.
The benefits of investment migration are fairly well documented. However, we need to be very diligent in the way we grant individuals the right to become global citizens. We have to keep in mind the interest of other countries as well.
In the Spotlight
Countries like Malta, who offer such programmes, are continuously in the spotlight, with strong calls from stakeholders for stringent due diligent processes; often the result of misconceptions or lack of knowledge about the industry.
The reality is somewhat different.
Due diligence is the cornerstone of every citizenship-by-investment (CBI) programme. For obvious reasons, CBI Units tend to keep confidential information under wraps and do not disclose what actually happens behind the scenes during those months that the applicants are waiting for a decision.
This lack of information has often been misinterpreted, or even worse fuelled speculation. In truth CBI Units (CIUs) employ very thorough and unparalleled due diligence systems which are often looked-up to by their peers in the financial services industries.
This is where we are lacking. We need to explain to the people that we do not take this process lightly. The last thing we want is to attract shady characters to our shores. And our programme is designed to avoid that.
Today, our programme is widely perceived to be the leading one in the industry. This goes down to our approach. Our modus operandi is different – it is not simply based on a business transaction. It is a holistic approach, taking into consideration different facets in order to safeguard the interest of the applicant, our country and even that of other countries to which the application receives right to entry.
We have put a lot of time, effort and resources into developing a robust multi-layered due diligence system which sifts the successful applications from those that do not merit citizenship. We have different levels of checks and balances in place, in order to ensure a solid and transparent process.
This has not gone unnoticed – in fact, we are continuously contacted by other governments and units to share our knowledge and experience in this field.
Notwithstanding, we will not rest on our laurels. We will continue improving our systems to reflect the ever-changing market landscape.
We need to keep advocating transparency and good governance in the way we administer the programmes. An application gone wrong can jeopardise the whole industry.
Responsibility and Reputation
Maintaining the integrity of the economic citizenship programmes is perhaps the greatest challenge that we face. A stringent due diligence framework is essential to impede security risks. We need to have all the safeguards in place in order to detect any possible abuse of investment migration programmes for money laundering or criminal activity. Good practice, accountability and transparency will definitely enhance the reputation and sustainability of such programmes.
All stakeholders involved in the application cycle carry a lot of responsibility on their shoulders. Agents have to make sure that they do their own due diligence on the applicants to guarantee that they only put forward reputable individuals, whilst countries have to put monetary interests aside and seek the best interests of their own jurisdiction and partner countries.
All interested parties should come together to safeguard the industry’s reputation.
It is with this principle in mind that Malta took the initiative of organising the first citizenship-by-investment due diligence conference. Our aim was to bring together industry practitioners and promote best practices.
Ultimately, improving industry standards also serves the country well. Experience has shown that reputable applicants feel more comfortable in knowing that they will become citizens of a country of good standing.
I firmly believe that Malta has come a long way, especially in light of the fact that our programme has only been in place since 2014. This success is due to our determination and diligence, as well as the strong and resilient character of our country and its people. I am confident that this trend towards success and positive reputation will persist and gain even more momentum, if we keep working together for the common good of this industry.