A European Union mission is visiting Malta to “investigate the rule of law” due to a falling out over the murder of journalist Daphne Caruana Galizia in 2017. Her murder legitimized concerns of corruption within the government and a weak judicial system.
however, the EU has other reason to be concerned about Malta’s practices, such as the selling of citizenship to foreign nationals. This practice has become somewhat common and the citizenship is known as a “golden passport.”
The reasons that the wealthy and elite might consider purchasing citizenship in another country are for lower taxes, elite education, political reasons, or really just in case they need to flee their own country.
The EU’s main concern about the “golden passport” situation is that the scheme is scheme is “importing criminal and money laundering into the whole EU.”
This is a particular problem for the Schengen Area, because Malta is a member of the Schengen Agreement.
The European Commission published a report in January 2019 stating its concerns for Malta’s scheme. The concerns included that Malta was “less strict” than other EU member countries for obtaining citizenship.
For example, applicants are not required to have physical residence or a prior connection to the country.
Other organizations have expressed concern as well.
The Organization for Economic Co-operation and Development (OECD) released a report in 2018 blacklisting Malta as a country at high risk of tax evasion because of its golden passport scheme.
The Maltese government published a report for the regions from which the “golden passport” recipients are coming. These regions include the Middle East and Gulf Area as well as Asia.
The EU member countries are obliged to release annual figures on who has become a citizen that year. Since the program’s introduction, there has been an increase in naturalized citizens coming from Saudi Arabia, Russia, and China.
The requirements to purchase Maltese citizenship are:
- Contribute 650,000 euros to a national development fund.
- Invest 150,000 into Maltese stocks or shares.
- Buy a property worth at least 350,000 euros or rent one for 16,000 euros a year.
That total comes out to 1,150,000 euros.
Other requirements include holding residency for at least 12 months, but applicants are not obliged to physically be present for that time period.
833 investors and 2,109 family members have obtained Maltese citizenship since the introduction of the program in 2014, and between mid-2017 to mid-2018, the program raised 162,375,000 euros, or 1.38% of Maltese GPD for that period.
Malta isn’t the only EU country with this sort of scheme, however. Cyprus and Bulgaria also have similar programs to allow citizenship to be more-or-less bought and sold. Between 2008 and 2018, Cyprus granted citizenship to 1,685 investors and 1,651 family members, although in November the country stripped 26 investors of their citizenship due to mistakes in processing them.