Courtesy of Malta-based Frendo Advisory, who shared the changes in real-time as they were announced during a briefing session for accredited agents today, IMI can today report that the Malta Residency and Visa Program (MRVP) are conducting consultations with agents and stakeholders to update its regulations. Program authorities emphasized that nothing was yet official and that both political colleagues and, eventually, Parliament would need to be consulted.
Until now, the MRVP’s financial requirements included three core elements:
- Investment in government stock worth EUR 250,000 or other stock/equities listed and trading on the Malta Stock Exchange to be retained for at least five years;
- A property purchase of EUR 320,000 (EUR 270,000 in South Malta or Gozo), or a property lease of EUR 12,000 per annum (EUR 10,000 in South Malta or Gozo);
- A non-refundable government contribution of EUR 30,000 (of which EUR 5,500 constituted an advance payment of the government administrative fee).
Among the changes discussed at today’s meeting was a potential removal of the current EUR 250,000 bond-investment requirement, as well as an increase in the real-estate investment minimums. No changes were proposed for the minimum rent levels.
Potentially counterbalancing the removal of the bond investment stipulation, increases in the non-recoverable government contributions (with amounts tiered according to whether the applicant rents or buys a home) are on the table.
The government is also hoping to introduce an entirely new financial requirement; a mandatory contribution to a Malta-registered NGO.
A better deal, both for investors and for Malta
Somewhat paradoxically, the new regulations could at once both make the MRVP more economical for the applicant and more profitable for the government of Malta.
Under the hitherto prevailing rules, the minimum capital outlay for a single applicant choosing the absolutely cheapest option (renting in Gozo) would amount to EUR 330,000, of which only the EUR 250,000 bond-investment would have been recoverable, and even that only five years later with associated opportunity costs for locking up a quarter of a million euros in relatively low-yielding securities for five years.
Under the proposed new regulations, a single applicant would be able to obtain a residence permit in Malta for a considerably smaller capital outlay, though none of it would be recoverable.
For the government of Malta, such a new deal could make more economic sense; in recent history, all major ratings agencies have considered Maltese government bonds investment-grade, even during the height of the European sovereign debt crisis a decade ago. In other words, Malta has never had trouble getting financing at reasonable rates. Asking MIIP or MRVP investors to assist in this regard, therefore, was never necessary.