Note: For information purposes only. Not intended as personalized advice of any sort. Please consult a qualified professional.
For a broad overview of Citizenship by Investment, see our previous post.
We’ve talked about how, if you fork over enough cash, you can get a second passport and citizenship in another country. You can even have it "in as little as three months," according to Andrew Henderson, the Nomad Capitalist. The term for these types of programs is Citizenship by Investment (CBI).
Simon Black at Sovereign Man describes Citizenship by Investment as "the ultimate insurance policy… [ensuring] that, no matter what, you always have a place to go - to live, work, do business, retire, and in some cases, even seek refuge. That way, when things go bad, you can take yourself and your family out of harm’s way… [and] the more options you have for you and your family, the more freedom you will experience."
Today’s CBI Spotlight is on Malta, a central Mediterranean island between Sicily and the coast of North Africa.
Nomad Capitalist's Jovana Vojinovic writes that there's a lot to love about Malta:
"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...
"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.
"Malta has been very successful in using its location to its advantage; it is a good place for offshore banking as its banks are among the top five strongest banks in the world."
Malta’s passport carries big benefits. The nation itself is a member country of the European Union, meaning Maltese passport holders get access to the Schengen Zone for residence, work, travel, and education. They get visa-free access to a total of 180 countries, including Canada, Australia, and the United States. Maltese citizens can also pass on their citizenship to their children.
Taxes are fairly simplified in Malta. According to Far Horizon Capital, income and capital gains taxes are only assessed on income generated, or remitted, within the country’s borders. Even then, a person is only deemed a tax resident if they live in Malta for more than six months in a calendar year, and their permanent home is domiciled there. However, if a person is deemed a Maltese tax resident, then they are subject to income taxes on their worldwide income and capital gains.
Corporate taxes are 35%, but this rate can be reduced to between zero and 10% for shareholders, utilizing a series of tax credits and refunds.
Malta has no inheritance, real property, wealth or municipal taxes, but they do have a stamp duty on certain transfers like real property or securities. The country’s value-added tax (VAT) is 18%.
The Maltese Exceptional Investor Naturalization (MEIN) program was first introduced in 2013, following the government’s amendment to its citizenship laws. Since that time, it has become one of the most expensive and exclusive CBI programs in the world. Vojinovic reports that "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."
The background check and due diligence process is also incredibly extensive:
"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."
Once someone obtains Maltese citizenship, they had better remain on their best behavior. Vojinovic reports that "every new citizen will be monitored for suspicious or criminal activity for at least five years after acquiring citizenship," and "there have been instances when people who were convicted of criminal offenses got stripped of their citizenship."
Unlike other CBI programs, Malta requires interested applicants to make a combination of donations and real estate investments. How much an applicant pays depends on how fast they want they want citizenship, according to the program website:
"Provide a proof of residence in Malta for a period of 36 months, provided that this period may by exception be reduced to a minimum of 12 months, subject to an exceptional direct investment (of €600,000 and €750,000 respectively), to be effected prior the issue of the certificate of naturalisation;
"Purchase an immovable residential property in Malta having a minimum value of €700,000 or take on a lease a residential immovable property in Malta for a minimum annual rent of €16,000, which property shall be adequate and suitable for the applicant and his dependants, for a minimum period of five (5) years from the date of issue of the certificate of citizenship;
"Carry out an exceptional direct investment in Malta, in accordance with Regulations S.L. 188.06; and
"Donate, prior to the issue of the certificate of naturalisation, a minimum of €10,000 to a registered philanthropic, cultural, sport, scientific, animal welfare or artistic non-governmental organisation or society, or as otherwise approved by the Agency."
A full list of the costs and steps involved are also available as a free PDF download from PricewaterhouseCoopers. All-in, an applicant is looking at a total investment of €690,000-€840,000 to obtain citizenship in just over one to three years. "Add 9-12% of the total investment price for government and processing fees if you’re opting for the real estate purchase," says Nomad Captialist’s Jovana Vojinovic, "and 12-15% if you’re going to rent."
Dependents to an application can be added at additional cost, including spouses, unmarried children under age 26, and parents aged 55 and over.
Is Maltese citizenship right for you? You’ll have to consult with qualified experts to answer that. If it turns out this is right for you, make sure you meet the minimum requirements. You must be at least 18 years old, in good health, have no criminal record, possess at least €50,000 in health insurance that covers global medical care, and you must be a high net worth individual.
See the country’s program website for more details on the required application forms. Like other CBI programs, you cannot apply on your own. You must appoint a Licensed Agent to handle your application on your behalf. A full list of authorized Licensed Agents is available on the program’s website.
Obtaining second citizenship is a big step in your journey to Escape From The West. Once you have your second passport, and a residence outside the West, you’ll be able to begin the process towards renouncing your U.S. or other Western Citizenship. Then you can enjoy true freedom and prosperity.