The Malta Residency Visa Agency (MRVA) today published the final version of its updated terms for the Malta Residency Visa Program (MRVP) – henceforth referred to as the Malta Permanent Residence Programme (MPRP), along the anticipated lines as discussed in last week’s article covering the initial stakeholder meeting.
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).
Going forward, the EUR 250,000 bond-investment requirement has been done away with in its entirety, while the real-estate investment minimums have increased to EUR 300,000 in the South of Malta and on Gozo and EUR 350,000 in the rest of the country, investments that must, in either case, be maintained for at least five years. No changes were made to minimum rental prices.
The government will make up for the removal of the bond investment by raising the amount required for the non-recoverable government contributions; for those who lease properties, the minimum contribution will amount to EUR 58,000, while those who choose to buy will need to contribute EUR 28,000.
Whether they are buying or leasing, all applicants will need to pay an administrative fee of EUR 40,000 of which a quarter is payable prior to approval-in-principle.
All applicants will also be subject to a mandatory EUR 2,000 contribution to a “local, registered philanthropic, cultural, sport, scientific, animal welfare or artistic NGO registered with the Commissioner for Voluntary Organisations, or as otherwise approved by the Agency.”
Applicants must further control assets valued at no less than EUR 500,000, at least EUR 150,000 of which must be held in the form of securities.
“Ups the game”
The new regulations, said the MRVA in a statement, would “build on the sound platform already established by the MRVP but ups the game in terms of Malta’s proposition while maintaining its momentum against competitor residency programmes in Europe and beyond.”
In last week’s article, we surmised that the new regulations would make the program both more economical for the applicant and more profitable for 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.
The new rules mean that, in practice, a single applicant might now obtain a residence permit in Malta for a non-refundable contribution of EUR 150,000, as compared to the previous capital outlay of EUR 330,000 of which most was recoverable.
New program data published
The MRVA has helpfully provided a media Q&A and summary notes on the new program, in which it also revealed a variety of illuminating economic data:
- The programme generated a one-off injection of financial capital of €29.98m net (2017-2019).
- In 2020 a further injection of €19m was registered.
- The effect of consumption expenditure by beneficiaries in various sectors of the economy generated circa €17.57m in 2019 alone.
- Total economic impact including both indirect and induced effects is estimated to be a value added of circa €18m in 2019.
- The Programme generated human capital estimated at €5.9m in knowledge economy and other high skills sectors in 2019…
- …and directly created 136 jobs (290 jobs when considering all multiplier effects). The jobs were predominantly in the finance and ICT sectors in 2019.
- As for real estate, whilst investment in this sector is important, the investment undertaken is relatively small in comparison to the entire market and the impact is estimated to be trivial especially during a time when the sector is booming. However, this investment would have helped boost the sector in an economic downturn.
The program’s direct contribution to the government’s Consolidated Fund had amounted to EUR 24.3 million during the first few years of operations. The accompanying document further confirmed consolidated application and approval statistics since the program’s inception:
To date, the MRVA has received 2542 applications, 70% of which have been approved and with a 10% rejection rate, commensurate with industry standards. Withdrawals represent 2% of the total.
The remaining applications are in process pending further information from Agents, as requested by the Agency.
A: The majority of applications have traditionally come from China. China is by far the largest market for residency-by-investment programmes worldwide. However, there is increased interest from other countries such as South Africa, Turkey, Russia, Vietnam, India and the Middle East.
88% of applicants had chosen to rent rather than buy their properties, said the statement. Among the 12% that bought, the average purchase price had amounted to EUR 510,144, while the average rental price was EUR 14,401, both figures well above the mandated minimum.
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