Last Updated March 26, 2020
Dateline: Istanbul, Turkey
Malta, a small but absolutely charming Mediterranean island, offers people an opportunity to travel the world and operate under financially liberal laws.
It offers advantageous economic policies that you are free to enjoy by obtaining citizenship via investment — at a hefty price of €690,000 and three years of your time. Or, you can decrease that to just one year if you increase your minimum investment to €840,000.
It provides citizenship in a highly livable area of the world with easy access to the rest of Europe. That sure is an attractive option for people looking for a top-tier passport.
However, it’s also one of the most expensive citizenship by investment programs in the world. Again the total costs for one person add up to around €690,000.
Not to mention, you’ll also have to demonstrate “genuine links” to the country to get a passport, and that generally means actually becoming a resident of Malta.
That being said, there are plenty of benefits to becoming a Maltese citizen that may prompt you to pursue this program. This guide will walk you through everything there is to know about obtaining a Maltese passport and determining whether it is the right program for you.
Let’s dive in. In this article we’ll cover:
⤅ About Malta
⤅ Alternatives to Malta’s Citizenship
⤅ Three Years and €690,000
⤅ Due Diligence
⤅ Investment #1: Contribute to Malta’s Government Fund
⤅ Investment #2: Real Estate
⤅ Investment #3: Donate to An Approved Non-Profit
⤅ Opportunity Cost and Return on Investment
⤅ General Requirements for Malta Citizenship by Investment
⤅ Before You Apply
⤅ Residency and a Genuine Link
⤅ Step 1: Apply for Residence
⤅ Step 2: Apply for Citizenship
⤅ Step 3: Complete Your Investments
⤅ Step 4: Receive Your Certificate of Naturalization
WHAT IS CITIZENSHIP BY INVESTMENT?
If you’re just starting to learn about citizenship by investment, let’s level the playing field. We’ll briefly introduce the concept here.
More and more (ultra) high-net-worth people are looking at citizenship insurance. What this means is that they want to have a “Plan B” for themselves, their families, and their businesses, giving them access to somewhere other than their original place of birth.
Some people are escaping political persecution while others are simply looking for balmy climates or ways to lower their tax burden.
Whatever the reason, a good handful of countries around the world offer citizenship by investment programs to attract these individuals and raise capital to build their local economies.
Usually, jurisdictions that offer citizenship by investment (CBI) are those that cannot easily diversify their income; for example, island-nations dependent on tourism.
Attracting foreign capital in exchange for residency and citizenship seems to be a win-win situation, but CBI programs regularly get criticized. There is an old sentiment where people think that CBI applicants are running away from criminal charges or that they want to launder money or engage in some other shady activity.
Meanwhile, the reality is much simpler: the vast majority of people who are looking to obtain a second passport are merely looking to go where they’re treated best.
For some, Malta is the country where they’ll be treated best.
When we talk about CBI with our clients, one of the first concerns they bring up is the quality of life in the country that they’re considering.
You see, the vast majority of countries that offer CBI are small islands in the Caribbean or the South Pacific. While these countries aren’t bad by any means (and their passports are actually quite good by most standards), most people can’t picture themselves actually living there.
Second passports are good for many things, but one of the issues that you need to consider is whether you actually would want to live in your new country of citizenship if push came to shove. Many people would go nuts on a tiny island like St. Kitts and Nevis, for example.
Another issue that we often hear specifically from Americans looking to renounce their US citizenship is that they want to keep similar passport privileges, without the burden of citizenship-based taxation.
And although passports like Grenada can offer interesting visa-free access to places like China and Russia, it doesn’t compare to the travel freedom that you have with a US passport.
Cue Malta — it offers the quality of life of a developed European country and the proximity to many exciting locations. Plus, its passport is one of the strongest in the world, meaning you wouldn’t have to compromise on passport privileges.
Malta is a small, English-speaking archipelago in the Mediterranean Sea that lies between Sicily and the coasts of Libya and Tunisia.
Living in Malta is quite idyllic by many standards. Its scenery is beautiful, and you’ll never be terribly far from a beach. Additionally, the weather there rarely dips below 9°C (48°F) or above 32°C (90°F), making it an excellent climate for those seeking to escape harsh winters or scorching summers.
Malta also has a rich culture with influences from the Greeks, Romans, French, British, and neighboring North African countries.
If its natural beauty alone isn’t enough of a reason to want to live there, then maybe the free universal healthcare, childcare, and education will convince you. All are provided for every Maltese citizen.
Plus, Malta’s LGBT rights are one of the best in the world.
In addition to Malta’s stunning scenery and developed culture, the country also enjoys a remarkable level of political and economic stability.
Its two-party system is well-balanced, and it weathered the financial crisis well. In fact, along with Germany, Malta is one of two states in Europe that has consistently maintained a good level of economic growth.
ALTERNATIVES TO MALTESE CITIZENSHIP BY INVESTMENT
Having said all this, if you’re an average Westerner, there’s not much value in having a Maltese passport.
If you’re a citizen of the UK, Australia, or another European country, then you already have most of the benefits that a Maltese passport can offer you.
On the other hand, Maltese CBI might be a great idea for someone from China, Russia, or the Middle East.
If you’re from one of those countries, then a Maltese passport has two major benefits. First, it will allow you to access the lifestyle benefits of living in Europe, such as greater educational and work opportunities. Second, it’s likely a more valuable passport than the one that you currently have.
However, this doesn’t mean that all Westerners should write off Malta’s CBI. If you’re from the US, for instance, you may prefer Europe’s social services to the paltry safety net that you have at home.
If you’re looking for a less costly option, there are a few alternatives to Malta’s citizenship that you may want to consider instead. Go for a different CBI. There are many different CBI programs out there and if Malta is out of your reach in terms of price, you could consider the cheaper Caribbean CBIs, Vanuatu, Turkey, or Montenegro.
Do a CBI and a second residence combo. This is our classic belt and suspenders strategy. The reality is that it’s much easier – and less expensive – to get St. Lucian citizenship and then get a European residence permit to get the same benefits that a Maltese passport would bring you.
Become a Maltese resident. Not only does Malta offer a program for citizenship, but it also has several permanent residence programs. It grants indefinite residence rights to people who meet the minimum qualifications and make property investments. In exchange, you’ll still get all the benefits of living in the Schengen area with a typically smaller investment.
Become a naturalized citizen of Malta instead. As a follow-up on the Maltese Permanent Residence Program (MPRP), after you’ve been a resident for long enough, you could apply for the Maltese passport by way of naturalization. This would cost you much, much less — though it may take awhile. Of course, you would need to have genuine ties to the country and to have lived in Malta for five years.
Get a passport by ancestry. If you’re in search of a European passport specifically, then you may want to consider whether you have access to other means of acquiring one.
THE MALTA CITIZENSHIP BY INVESTMENT PROGRAM
If you’re a discerning investor, you should be fully aware of Malta’s location on the map as well as its CBI program.
Malta is the only country that offers CBI in the Schengen Area. Therefore, if you acquire Maltese citizenship, you can travel freely throughout the majority of Europe.
This program was initially created in November 2013 when the Maltese Government amended its citizenship laws to provide a framework to create a CBI program.
The program has most recently been updated in November of 2020, introducing stricter due diligence processes as well as a collection of other requirements. The Citizenship for Exceptional Services By Direct Investment (formerly the Malta Individual Investor Program and now referred to as Maltese Exceptional Investor Naturalization (MEIN)) was created to provide high-value investors with good moral character an opportunity to obtain Maltese citizenship by making a substantial investment in the country.
Today, the program allows investors who make a contribution to Malta’s Government Fund, an investment in government-sanctioned bonds or stocks, and a real estate investment to become Maltese citizens through investment, provided they meet other criteria set forth by the Maltese government.
The Maltese program has quickly become the most exclusive CBI program in the world.
Up to 2020, Malta has raised €1.5 billion in investments and has issued more than 1,000 passports, mostly to Russian, British, and Ukrainian nationals.
ONE YEAR AND (NEARLY) A MILLION EUROS
The November 2020 updates have seen the minimum investment for those foreigners who wish to obtain their citizenship in just one year increase from €650,000 to €750,000.
Sure, you can invest the lower amount of €600,000, but then it’s less like CBI and more like a Golden Visa.
In fact, whatever option you take will involve a longer wait time than any other citizenship by investment program in the world.
You could go to one of the Caribbean nations and get a passport within six months, usually much less. But with Malta, you’re looking at at least a year (if not three) because you actually need to establish connections to the country and spend time living there to do so.
Also, there have been instances when people who were convicted of criminal offenses got stripped of their citizenship.
THE DUE DILIGENCE
Malta conducts due diligence like no other CBI program; after all, it does hand out a highly coveted Schengen passport.
The Maltese system has been called the “gold standard” of all due diligence processes, going to extensive detail on each application. It’s also set to become even more stringent as the program becomes more popular.
Currently, the due diligence process has four tiers:
- First Tier. Standard due diligence is carried out by the agent submitting your application, (e.g., World-Check).
- Second Tier. Police clearance is obtained; your name will be run through Interpol, Europol, and global equivalents. Also, any third-country national who would need a visa to visit Malta will have to go through the full Schengen visa application procedure too.
- Third Tier. Anti-money laundering professionals will carry out a check to ensure your application is complete and that the documentation is correct. Also, a global database check will be conducted, making sure you’re not acting against any international sanctions and that you aren’t on any denied person lists.
- Fourth Tier. All of the collected information is compiled and reviewed by a risk assessor. A recommendation is made to either accept or reject the application.
HOW TO GET A MALTESE PASSPORT THROUGH INVESTMENT
In order to get Maltese CBI, you must make three separate investments:
- Donate €600,000 to the Maltese Government Fund (citizenship in three years); donate €750,000 if you’d like to obtain citizenship in one year.
- Buy (minimum €700,000) or rent local real estate (minimum total cost of €80,000).
- Donate a minimum of €10,000 to an approved non-profit organization.
The minimum total investment is thus €690,000, or €840,000 for the faster route.
Add 9-12% of the total investment price for government and processing fees if you’re opting for the real estate purchase, and 12-15% if you’re going to rent.
You can also add dependents to your application for an added cost. Eligible dependents include spouses, unmarried children below the age of 26, and parents over the age of 55.
The government has also added a mandatory €10,000 contribution to a charity and doubled the real estate investment amount if you’re looking to buy.
The cost to invest in Maltese real estate was already high, so an investment of €700,000 really has us questioning who is going to take this option.
The rental sum of €16,000 per year (times the mandatory five years) comes to €80,000 and has remained unchanged.
You can learn more about the updates to the program and Andrew’s opinion about Malta in the video below.
INVESTMENT #1: A CONTRIBUTION TO MALTA’S GOVERNMENT FUND
To get Maltese citizenship by investment, you’ll need to make a large donation to Malta’s Government Fund.
The Maltese National Development and Social Fund finances projects such as education, healthcare, and job creation. Though you won’t get any return on your investment, your money will go directly to further improving Malta’s social atmosphere and infrastructure.
For this requirement, you will make a non-refundable donation of at least €600,000 —or roughly $730,000 — to this fund. If you are also getting citizenship for a dependant, you will need to add €50,000 per person. It doesn’t matter if it’s your spouse, underaged children, or adult children —everyone’s charged the same.
Because the donation for dependents is relatively small compared to the whole cost of Maltese CBI, you will want to take timing into account when you apply. If you’re about to get married, for instance, then you will want to wait until you’re married so that your spouse can get citizenship for only €50,000.
INVESTMENT #2: REAL ESTATE
In addition to your contribution, you must also make a minimum investment in local real estate to establish your ‘genuine connection’ to Malta.
For a real estate investment to qualify, it must have a minimum value of €700,000. However, most applicants (90%+) go for the rental option which requires that you sign a five-year rental agreement. The minimum annual rental sum is €16,000 per year or €80,000 for the mandatory holding period of 5 years.
If you do choose to purchase a home, know that Maltese real estate isn’t particularly lucrative, but the country’s local real estate market is fairly stable. At worst, you’ll likely maintain the value of your investment, but there’s also some potential in certain parts of the country.
INVESTMENT #3: A DONATION TO A NON-PROFIT ORGANIZATION
The final investment that you will need to make is €10,000 to an approved non-profit organization.
This requirement has recently replaced the €150,000 investment in government bonds. That’s both good news and bad news, depending on who you ask.
The good side of it is that you won’t need to have a considerable amount of money sitting in government bonds, unable to be touched, and probably not generating much of a return anyway.
The bad news is that you now have to make a tangible investment in yet another “fund” — a registered non-governmental organization or society that has been approved by the Maltese government. You won’t get this money back.
OPPORTUNITY COST AND RETURN ON INVESTMENT
As with any CBI program, you need to consider the opportunity costs and potential for return on investment with Malta’s CBI program.
The problem with Malta CBI is that you pay a lot of money with very little return. The minimum €600,000 donation is completely non-refundable.
So, the only way to make your Maltese investments profitable is through your €700,000 real estate investment, and doing that can be difficult. Rental yields in Malta aren’t great, although the real estate market is fairly stable.
In addition to these financial cost considerations, you should also consider how living in Malta and becoming a Maltese tax resident may have some opportunity costs.
For one thing, you’ll be less mobile than you were before since you now need to spend at least 183 days in Malta to get your citizenship. This means fewer trips to monitor your offshore investments and accounts or to acquire new ones.
Therefore, before you apply for Maltese residence and citizenship, you will need to consider how this process will holistically impact your life.
THE STEP-BY-STEP APPLICATION PROCESS
Malta’s CBI program is extremely efficient and the government has maintained the absolute highest standards when it comes to the vetting and due diligence of applicants.
Only 400 people will be admitted to the program each year and every new citizen will be monitored for suspicious or criminal activity for at least five years after acquiring citizenship.
But before you get the ball rolling, you’ll need to first check if you’re eligible to apply.
GENERAL REQUIREMENTS FOR MALTA CITIZENSHIP BY INVESTMENT
There are some basic requirements to become a Maltese citizen. You need to be:
- 18 years of age to apply
- An (ultra) high net worth individual
- Medically fit
- In possession of a clean police record
- In possession of global health insurance, with coverage of at least €50,000
And then, you will need to pass the Maltese government’s “fit and proper” test to become a Maltese citizen. It’s designed to ensure that all prospective citizens are reputable and in good standing with their current countries of residence or citizenship.
The Maltese government will perform background checks through INTERPOL and the International Criminal Court, and you will also be required to provide police reports from your country of residence.
In general, if you have a clean criminal record and have not been involved in any major scandals, you should be able to pass Malta’s “fit and proper” test.
However, after the recent updates to the Maltese CBI program, the due diligence checks have been expanded even more. They can now take as long as the government officials deem necessary.
RESIDENCE AND A GENUINE LINK
Malta’s Citizenship by Investment program also includes a somewhat finicky requirement — all prospective citizens must prove a “genuine link” to Malta to be approved.
Typically, this requirement means that you must spend one year as a resident of Malta prior to receiving your passport to prove that you have a genuine link to the country.
This requirement can be the most difficult to meet for Nomad Capitalists.
If you have business interests around the world, then spending a substantial amount of time in Malta could seem antithetical to your interests.
Therefore, you’ll need to carefully consider how this requirement plays into your offshore strategies, and if getting this particular CBI is the best choice for you.
BEFORE YOU APPLY
If you can meet Malta’s investment requirements as well as the country’s general standards for its citizenship program, then you can set out to begin the application process.
Prior to this step, you should do two things:
- Account for how establishing residence in Malta will impact your overall strategy including your personal and business taxes.
- Then, you will need to gather all the required documents (in English) prior to submitting your application. While the Maltese government website does not state exactly what you need for your application, you should expect to provide basic documents like your birth certificate and other passports as well as a police report from your current countries of residence.
From there, the forms that you will need to complete will depend on things like your current country of residence as well as whether you are applying with dependents.
You can find the complete list of the various forms that you might need to fill out here.
Although you’ll need quite a bit of money and paperwork, the process for applying for Malta’s CBI program is relatively straightforward.
THE APPLICATION PROCESS
STEP 1: APPLY FOR RESIDENCE
The first step in the process of getting Malta citizenship by investment is applying to become a Maltese resident. You can begin this process online, but you will need to arrive in Malta in order to complete the process.
It is important to note that this residence option is not equivalent to Malta’s other residence programs. In this case, you would be granted residence for 36 months and can only extend it if you have applied for citizenship.
The process is relatively simple and straightforward. Provided that you meet all requirements and supply all necessary documents, you should be approved for Maltese residence almost immediately.
STEP 2: APPLY FOR CITIZENSHIP
Once you’re approved for Maltese residence, you may then immediately apply for Maltese citizenship by investment.
At this time, you will also need to pay a due diligence fee, a passport fee, and a €10,000 deposit on your initial donation. You will also need to provide evidence of your funding source.
Once you have completed the application, the Maltese government will review it within 90 days, and at that point, Identity Malta will confirm if all your documents are in order.
The Maltese government will then take approximately another month (perhaps longer) to further review your documents and complete their due diligence, and you will receive conditional approval.
STEP 3: COMPLETE YOUR INVESTMENTS
The next step in this process is to complete all of your investment requirements.
Once your application is conditionally approved, you will need to pay the rest of your €600,000 or €750,000 contribution (or more if you have dependents) by the five-month mark.
You will have more time to complete the other two requirements — the real estate and the non-profit donation, but by your eighth month of residence, you will need to prove that you have met the minimum standards for both.
STEP 4: RECEIVE YOUR CERTIFICATE OF NATURALIZATION
Once you have completed your application, fulfilled your 36 or 12 months of residence (depending on how much you’ve invested), and met the investment requirements, you can collect your Maltese Certificate of Naturalization.
When you become a naturalized citizen of Malta, you can apply for and receive a Maltese passport.
THE PROS OF MALTA’S CITIZENSHIP
Although the program is certainly on the more expensive side compared to other CBI programs, Malta CBI comes with a number of excellent benefits that you should consider.
The Schengen zone as your playground. As a Maltese citizen, you will be able to legally live, work, and travel in all of the European Union, without any border control. This is great if you want to do business or invest in Europe, or if you want your children to be able to access European universities, among many other perks.
One of the world’s most powerful passports. You will be able to travel to more than 180 countries, including Canada, Australia, and the United States (via ESTA), with your Maltese passport. Because of this, a Maltese passport can be highly desirable if you want to renounce your US citizenship as it offers a comparable passport without the burden of citizenship-based taxation.
Partially recoupable investment. After five years of holding real estate, you can sell it and cash out (hopefully at a profit).
Pass it on. If you become a Maltese citizen through investment, your family can become Maltese citizens for life, and your citizenship can be passed down through generations.
Social stability and opportunity. Whether you choose to live in Malta or another European country, Europe offers an unprecedented level of social stability and opportunity to its residents and citizens, as well as their children. If you value high-quality schools and social services, then Maltese CBI could be a good choice for you.
Quick and easy processing. The rules of eligibility for this program are straightforward, and if you can make the minimum investment and have a clean criminal record, then you’re likely qualified for it. The application itself is also quite easy to navigate and you’ll receive your European residence immediately after applying. Then, your passport will be issued within 1-3 years.
A reputable CBI program. While other CBI programs out there might drop the ball when it comes to due diligence, Malta has the world’s strictest due diligence standards and vets applicants fully before letting them gain a passport. This ensures that only highly respectable applicants get through.
Favorable business environment. As a citizen of Malta, perhaps one of the most appealing reasons for entrepreneurs to choose to plant the seeds of their business in Malta is because anything earned from capital gains outside the country is yours to keep.
It’s well-connected. Quick flights are available to many of the European hubs, as well as North Africa. Malta is a virtual stepping-stone from continent to continent, placing business opportunities within short reach.
High quality of life. It is said that the Maltese live a Mediterranean style life embedded with an English sense of business. Malta also stands out as one of the sunniest locations in Europe alongside Cyprus and has solid healthcare and educational systems.
THE CONS OF MALTA’S CITIZENSHIP
The benefits that Malta offers are somewhat offset by the fact that being in the borderless Schengen Area and being a US visa-waiver country means that they have to be a bit more strict.
All in all, no CBI program is perfect and Malta’s is no exception. Although it’s one of the most powerful passports in the world, here are some of its drawbacks for you to carefully consider.
An involved due diligence process. Though it adds to its great reputation, many more strings come with a Maltese passport when it comes to due diligence. Malta rejects one out of every four applicants. And when you’re rejected, you lose fees that you’ve paid.
It’s a long process. You’re going to need to spend some time in the first twelve months as a resident of Malta before finalizing the CBI process. It is not a drive-thru three- to four-month process that you would get if you went for one of the Caribbean CBIs.
It’s expensive. Ask yourself — what benefit are you getting? If you don’t already have access to some of the countries to which Malta provides visa-free access, you still have other options. In the worst-case scenario, you could get visas for the countries you want to visit and it won’t cost you hundreds of thousands of dollars extra.
MALTA CITIZENSHIP BY INVESTMENT FAQS
Even though we wrote extensively about the program, the procedure, as well as the pros and cons of Malta’s CBI program, you might still have questions.
Here are some of the most frequently asked questions about obtaining a passport from Malta.
Can my future children become Maltese citizens?
Yes. You can pass on your citizenship to your newly born children.
How fast can I become a Maltese citizen?
The very minimum is 12 months, although it will most likely be closer to 14 months before you will receive your Maltese passport.
Do I have to visit Malta to become a citizen?
Since you must give Malta your biometric information (e.g., fingerprints), you will have to travel to either Malta or one of its international embassies to apply to the Maltese CBI program.
When do I actually make the investment?
Luckily, you’ll only be required to make the full investment after you’ve passed the due diligence step of the application.
Is there a language requirement?
No. You don’t need to pass any language tests in order to be considered for Maltese citizenship.
Does Malta accept Bitcoin as payment for its passport?
Is dual citizenship allowed in Malta?
Yes, dual citizenship is legal in Malta. You can hold two or more citizenships when you receive your Maltese passport. Do note, however, that the country of your first passport might not allow dual citizenship.
Does Malta publish the names of its naturalized citizens?
Yes, your name will be publicly available as all names of new Maltese citizens are published in the Government Gazette once a year.
IS MALTESE CITIZENSHIP BY INVESTMENT WORTH THE COST?
After reading a bit about the benefits, drawbacks, and the process of obtaining Maltese citizenship by investment, you may be wondering whether it is worth your while.
Unfortunately, there is no straight answer; it depends on your personal circumstances and financial goals.
But all in all, Malta is a great passport. It gives you and your family a lot of privileges as well as a real safe haven.
On the other hand, Malta isn’t the best or the easiest CBI program.
Although the process for Maltese CBI is straightforward, you have to meet quite a few requirements. It’s not like Dominica’s program where you give them $100,000, fill out a few forms, and get your passport.
You’re going to need to actually move to Malta, and you’ll be paying more than ten times as much for a second passport when compared with the cheaper CBI programs.
Also, you’ll need to carefully consider how getting Maltese CBI will impact your current plans and strategies since it will restrict your movement for at least a year.
That being said, Malta’s CBI program is an interesting option as it gives you a European passport with Schengen access – that’s certainly valuable and should definitely be a consideration for those looking to plant a flag, and go where they’re treated best.