Newspaper article International New York Times

Selling Citizenship to the Rich, Malta Unlocks a Gate to Europe

Newspaper article International New York Times

Selling Citizenship to the Rich, Malta Unlocks a Gate to Europe

Article excerpt

For $1.3 million, a foreigner can obtain a Maltese passport, residency with tax advantages and freedom to move throughout the European Union.

As wealthy foreigners rush to get citizenship in Malta under a new program, the residency requirement is taking many forms.

Russians rent high-end villas, but then stay in five-star hotels when they visit.

An American financier plans to live in Switzerland but occasionally vacation in Malta.

One Vietnamese businessman, eager to start the clock ticking on the 12-month timetable for residency, sent the necessary paperwork on his private jet to expedite renting a property he had never seen.

"They come twice, once to get a residency card and once to get a passport," said Mark George Hyzler, an immigration lawyer at a firm here.

Malta's citizenship program, which offers a passport to those willing to pay 1.2 million euros, about $1.3 million, has been controversial since it was introduced more than a year ago.

A big concern elsewhere in the European Union is that Malta, with a population of about 423,000, is not only selling citizenship to its own country but also conferring to the buyers all rights of European Union membership, which include the freedom to live and work anywhere in the bloc, with 28 nations and more than 500 million people.

Some officials have also voiced concern that selling Maltese passports could open a back door to the European Union to criminals and terrorists who can afford the price tag.

The residency requirements, added to appease critics shortly before the program took effect, were meant to make the program more palatable. But the new rules are only increasing the consternation among critics, who say the program has resulted in the sale of citizenship to the global 0.1 percent.

Those privileges-by-purchase might seem particularly unfair in a season when thousands of impoverished African and North African migrants have perished in the Mediterranean trying to gain entree to the European Union on rickety boats.

Under the Malteste program, applicants must show they have rented a property in Malta for 12 months. But they do not necessarily have to spend any time in this Mediterranean island nation, raising the question of what genuine links they are establishing.

"It is questionable how the residency requirement is being applied," said Tonio Fenech, a member of the Maltese Parliament

Lawyers, accountants and real estate agents say the citizenship program has catapulted Malta onto the radar of the global elite. Applications are pouring in, and the program aims to raise $2.2 billion, more than a quarter of Malta's gross domestic product.

"We want to attract individuals who can add value to our country because of their ideas, and their networks and their businesses and their talent," said Jonathan Cardona, chief executive of Identity Malta, which administers the Individual Investor Program.

Housed in a fortresslike 16th-century building once used as a hospital, the Malta citizenship program nods to the country's multicultural past, punctuated over the years by invasion.

The Phoenicians, Carthaginians, Romans, Byzantines, Fatimids, Normans, Sicilians, Spanish, French, a European lay religious order and the British all tried to conquer or rule Malta, and many succeeded. Maltese, the official language with English, looks and sounds Arabic, but its speakers are primarily Roman Catholics who pray to Allah, or God.

The citizenship program also reflects Malta's present. Malta, which covers 122 square miles and is about 50 miles south of Sicily, has few natural resources. Malta counts on the reliable sun and shimmering blue sea to attract tourists. Beyond that, it has had to be creative to keep the country's coffers filled.

The tax system, in particular, has been a boon. Some foreign companies can be structured to pay 5 percent in corporate taxes. Malta also has double taxation treaties with 65 countries, allowing individuals and businesses to avoid being taxed in two places. …

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