14 Jun Stimulating the economy by strengthening the community
Alex Muscat, Parliamentary Secretary for Citizenship and Communities, Malta, sees investment migration growing dramatically in the post-COVID-19 era
What are some of the key projects that you are focusing on as you kick off 2021?
Quite a number of initiatives are in the pipeline. Most of the initiatives falling within my purview were very useful in terms of the wealth which they created for Malta to be in a much stronger position vis-à-vis COVID-19. Most of the initiatives which the government was taking were also partly financed via our initiatives, via FDI, coming in through the number of programs which we had in place.
What we are seeing for 2021: hopefully, a post-Covid era now, where vaccination in Malta is going very fast. The intention is to even increase the rate at which we are vaccinating our people, and to hit the floor, running as fast as we can. Investment migration is top on the government’s agenda. Basically, attracting foreign direct investment, attracting new investors to our shores, opening up new opportunities and investing in new businesses, are factors which we are giving a lot of importance to. An increasingly growing number of families are realizing how important it is to have multiple residences and have a residency based in a number of countries.
What are your views on the latest trends in investment migration, impacts of the pandemic and key opportunities that have emerged during this time? What are the main differences between the former and the new program that you have launched recently?
The IIP kicked off in 2014. It had an original capping so when the original Citizenship by Investment programme, it had a cap of 1800 and we are very fast approaching that cap. The idea was that once IIP reaches its limit, we launch a new initiative. We are not accepting any new applications under what used to be the IIP. But we are currently processing all the applications which were already at the initial stages. We think that most probably we will be reaching the 1800 cap.
The idea of having a cap also for the new regulations is to be able to pay more attention on the actual investor. We are not after the numbers like maybe other countries are. We are more after the individual talent of the individuals who end up, not only participating in the program, but actually investing in other areas here in Malta. That is something which we give a lot of importance to: not just attracting the individual to ultimately obtain Malta’s citizenship, but actually, truly becoming a member of our society, becoming part of the community and investing in other areas. I would like to increase the percentage of the investors who have been participating in the previous IIP, in the sense that not just participating in the IIP, but also investing in other areas here in Malta.
What do you attribute this success rate in dealing with the pandemic and not locking down? What do you think you have done differently?
Putting it simply, it is finding the right balance between saving the lives of people and the livelihoods of people, and also saving the economy. Obviously, that is what all the politicians were trying to do: finding the best possible balance and saving both the lives and the livelihoods of the people. So far, we have been quite good at doing it and government was in a financial position to aid businesses quite strongly. We have an estimate that we managed to save, which for Malta is remarkably high, some 90,000 jobs. Even during the pandemic, we have seen local businesses keeping on investing. One of the areas which was very hardly hit, like the rest of the world, was the tourism sector. But a number of operators took the opportunity to invest in their hotels, while they are not getting any tourists at the moment, to be ready when everything opens up and everything is back to normal.
How would you characterize the evolution of standards in the industry when it comes to transparency? How are you working with your counterparts in the EU as well as in IMC to ensure the highest standards are continuously upheld?
The IIP and the new regulation are the most rigorous when it comes to due diligence. We have been rejecting applicants for the IIP and now also for the new regulations, as a percentage, by far the highest in all the market. If you want to come here to Malta, the doors are open, but only for the people who are able to prove that they have generated their wealth through good and proper means. We value this a lot, we are open to anyone, but as long as they generated their wealth in a legal manner.
This is something which we have been discussing also with the EU Commission and with other players in the market, with other countries in the market. We were not happy to see other countries which were much less stringent than we are. We would rather have some common approach across the EU to set the level as high as possible rather than going for the low-hanging fruit at the detriment of all other countries.
Malta’s vibrant economy packs a powerful punch considering the country’s size and population. What are some of the latest highlights of Malta’s future proof economy? What is the current state of its workforce? Is the economy still facing a labor shortage and, if so, how is your Secretariat working to tackle this challenge?
Malta is still facing a labor shortage. Within my remit is Identity Malta, which is the Maltese agency responsible to give resident and work permits to non-Maltese, be it EU nationals or third-country nationals. We had businesses craving for labor and it was a bit much more cumbersome ,how to get foreign labor to come to Malta during the pandemic, especially when the airports were not functioning as normal.
Nonetheless, we are working on the first nomad residence permit. During the pandemic, a lot of people realized that you could work from home, and your home can be anywhere in the world. We want to attract this kind of people. We see there is a great opportunity for this. We will be launching very soon the Nomad Residence permit. We know other countries have already ventured into this area, but they are mainly giving national visas. Residence permit gives you even more flexibility when it comes to what you can do, not only in Malta but also in the rest of the EU, especially in the Schengen area. You will still be paying your national income tax where you are physically employed. You are just living in Malta, enjoying our economy, our weather, our lifestyle and enjoying not being in a lockdown.
In terms of investment opportunities for those seeking citizenship, what are the most attractive and lucrative opportunities in Malta today, both in real estate and other areas?
Real estate has always been very interesting in Malta. The Maltese property market is a very special one. Given our size and the limited land we have, never in Maltese history, had we had a situation where property prices went down. That makes the available stock more limited.
What would be your final message to the readers of Newsweek about Malta, as a place to invest, live and work?
Being the size it is, Malta has always paid a lot of attention to the community sense. In a way, you are not just investing, you are not just a number in Malta, but you are an individual. The physical contact between investor and the politician gives much more ease of mind to the investors, knowing that they are close to the legislator in a way. This way, the legislator can be much more responsive to the needs of investors is something which gives them reassurance.
On the other hand, also because of our size, we tend to be much faster when it comes to legislate. A year in other countries takes maybe three months here in Malta, then again because of our size. We are not the biggest of the fish but we most probably are one of the fastest. That is one of our advantages. Opportunities are much more tailored here in Malta, much more particular, but that is also why we are a little bit more selective and maybe we can afford to be a little bit more selective.
That is what we intend to keep on doing: keep on attracting investors, be more attentive to the investors who come in and maybe be a little bit more selective. We have always been a little bit selective in the investors we attract, and I believe that there are still lots of opportunity. The way our economy and our society at large, the way it reacted during the pandemic, I think will put us in a situation post-COVID-19 where investors will evaluate this. They will value the fact that our health system never collapsed, our economy was never really hit that hard. All of these things put together will make Malta always a very attractive opportunity for all investors around the world who want a safe place where not only to reside, but also to invest and make sure that their investment keeps on growing.