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No Exclusive Marketing Concessionaires for New Malta PR Program, Says Agency-Boss Mizzi

In conjunction with the launch of the brand new Malta Permanent Residency Program (MPRP), the country’s government has established a new agency – The Residency Malta Agency (RMA) – that will oversee the program’s operations, due diligence, promotions, and agent appointments. The MRA will have many of the same functions – and largely the same management – as the Malta Residency Visa Agency (MRVA), which oversaw the MPRP’s predecessor program, the Malta Residency Visa Program MRVP.

Charles Mizzi will continue to serve as the head of the agency, now under a new brand and with new investment terms.

At a minimum capital outlay of EUR 150,000 for a single applicant, none of which is recoverable (at least for applicants who lease rather than buy property), the MPRP has among Europe’s decidedly lowest capital requirements.

This raises the question of the program’s competitive position relative to other European residency programs that have much higher (but also more recoverable) capital requirements. Speaking to IMI, Mizzi indicates he believes the program’s new structure gives him the best of both worlds: A program that’s simultaneously more attractive for clients in terms of capital requirements but one that also, ultimately, brings more direct revenue to Malta than under the MRVP, which had a EUR 150,000 bond-investment element.

“We believe that the MPRP proposition is competitive in comparison to other programmes even though the capital is not recoverable,” says Mizzi. “At the same time, the new requirement of making a direct government contribution means more revenue for the Maltese government than was possible under the MRVP model.”


Read also: Malta’s New Permanent Residence Program Open as of Yesterday


By the time it expired, the MRVP had received 2,452 applications, of which 70% had been approved as of January 18th. Questioned as to his forecasts for the MPRP’s performance, and whether it will match or exceed that of of the MRVP, Mizzi is hesitates to prognosticate.

Under the current volatile circumstances resulting from the pandemic that has really not spared any country in the world, it would be bullish to share accurate projections,” he says. “However, even before the launch of the MPRP, we were experiencing increased interest in the Programme. Now with the official launch of the MPRP, this interest is being reconfirmed through the positive feedback we are getting from licensed agents.”

Beyond Chinese applicants

Chinese nationals accounted for the lion’s share of applicants under the MRVP. Though that is likely to be the case also for the new program, Mizzi confirms that specific plans aimed at diversifying the customer base are afoot. While China remains the largest market, he explains, “we feel that markets like India, South East Asia, the Middle East, and Africa all hold promise and potential.”

To capture more of relatively untapped source-markets, the agency is preparing a comprehensive marketing strategy “to promote the MPRP across different regions to achieve more diversity.”

Questioned as to what form, specifically, such a marketing strategy will take, he says it will involve working closely with the licensed agents, giving them the tools and support their initiatives need to succeed, such as by providing them with official marketing materials in a variety of languges. A support model for roadshows is also in the works.

Unlike its predecessor, however, the MPRP will not be adopting a model of exclusive marketing concessionaires for particular geographic regions. The agency, Mizzi confirms, will not have marketing partners, but will instead work with licensed agents directly by supporting their marketing efforts.

Asked what the reasoning behind the change in approach was, Mizzi simply stated that he believed that “over the past years licensed agents have gained the necessary experience and grown their networks sufficiently in order to be able to successfully promote the programme. The Agency will be supporting all agents equally with the same supportive measures.”

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Whereas the MRVP had exclusive marketing partners for different geographical regions, the new MPRP will take a different approach.

Kenya’s Investment Authority is drafting legal amendments that would permit a CIP. Its chairman says “there’s really no opposition to it.”

Chairman Warsal is expected to reveal details on the program’s long-awaited real estate investment option next week.

 

The post No Exclusive Marketing Concessionaires for New Malta PR Program, Says Agency-Boss Mizzi appeared first on Investment Migration Insider.

Malta’s New Permanent Residence Program Open as of Yesterday

Malta’s new Permanent Residence Program (MPRP), which replaces the erstwhile Malta Residency Visa Program (MRVP), officially opened for applications yesterday following the publication of the relevant law last Friday.

The regulations now in effect have not changed materially from those IMI could exclusively reveal in January, the details of which you can read more about in our original article on the topic:

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.

You can read the legal notice that provides the basis for the program here.

Luke Frendo of Frendo Advisory, a law firm that, among other services, offers assistance with the program, said “we welcome the launch of the MPRP and the changes made to the Programme. The replacement of the requirement to invest in Government bonds with a higher contribution is certainly a positive development. As the world hopefully starts to reopen, I’m sure we will see the demand for the MPRP grow.”

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Malta’s new Permanent Residence Program (MPRP) is officially open for applications, following the publication of the relevant law on Friday.

Applicants to the Cyprus Permanent Residency program now have more investment options than ever, writes Eleni Drakou.

Aiming to prevent foreign developers from “recycling”, Turkish authorities say a single property may henceforth only be used once to qualify for citizenship.

 

The post Malta’s New Permanent Residence Program Open as of Yesterday appeared first on Investment Migration Insider.

MRVP Changes Now Official: Total Contribution Amounts Starting at EUR 150,000

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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The new rules mean a single applicant, choosing to rent on Gozo, could obtain a residence permit in Malta for a non-refundable EUR 150,000.

The new regulations would, at once, both make the MRVP more economical for the applicant and more profitable for the government of Malta.

An unexpected turn of events in light of the bipartisan consensus in favor of continued publication that emerged in Malta some two years ago.

 

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The post MRVP Changes Now Official: Total Contribution Amounts Starting at EUR 150,000 appeared first on Investment Migration Insider.