Competition from Malta cited among reasons for fall in demand of UK investor visas
By Helena Grech, Malta Independent
Following more stringent requirements, unstable geo-political developments and increased competition from countries such as Malta and Cyprus, the UK investor visa programme has seen a significant decline.
The Financial Times reports that the number of foreign investors moving to the UK has dropped more than 80 per cent between January and March 2016.
The report states that the most pronounced fall in demand for the UK investor visa programme came after November 2014. This was due to a change of requirements stipulating that investors need to deposit £2 million, instead of £1 million, in UK gilts, shares or corporate loans.
By contrast however, it was found through leaked Panama Papers e-mails that the Panama-based law firm at the heart of the international controversy, Mossack Fonseca, went as far as to publicise the ease with which “lax” residency requirements are satisfied – the Times of Malta reported yesterday.
“While the requirement for residency is not linked to a specific number of days, some presence in Malta is required,” read one of the e-mails.
The e-mail also added that it would be beneficial for a prospective client to make some form of contribution to “NGOs/charities/religious groups to forge a relationship with the local community”.
As an official partner of the International Consortium of Investigative Journalists, The Malta Independent has access to the trove of leaked documents of Mossack Fonseca and its controversial clients.
Transparent International’s UK head of advocacy and research Rachel Davies told the Financial Times that “we have significant concerns that before 2015 the front door was left open to wealthy corrupt individuals looking to settle in the UK”.
The UK has since strengthened source-of-wealth checks – resulting in the number of visas issued to individuals from countries with an increased risk of corruption has fallen.
It is not known how many citizenship buyers there are in Malta, or where they come from. The list of all those who have become citizens of Malta each year includes those who have become so through naturalisation, making it impossible to ascertain details of golden passport buyers or scrutinise the due diligence process.
This has resulted in heavy criticism from the Opposition as well as sections of civil society, who are concerned about the level of due diligence and whether cash-for-passport buyers have any actual links to Malta.
As it stands, a prospective Maltese passport buyer would need to make a contribution of €650,000, purchase €150,000 worth of government bonds and buy a €350,000 property, or a rental of €16,000 per year.
The original requirements for the Individual Investor Programme were not accepted by the European Commission. The Commission eventually approved the scheme after an amendment was made which meant that applicants would have to be “effective residents” of Malta for 12 years before they are granted Maltese and EU citizenship.
Government clarification on what “effective residents” refers to later revealed that it would mean spending at least 183 days – half a year – in Malta. Much criticism has been levelled at this term which has been interpreted very loosely, with many IIP buyers having minimal links with Malta.
Nuri Katz, a Canadian immigration consultant, in previous comments made to this newsroom said that the way the scheme was designed is open to abuse. He recalled how former Identity Malta head Jonathan Cardona was quoted as saying that a functional address and circumstantial evidence such as yacht club memberships would suffice.
In recent weeks, the Opposition found that 91 IIP buyers who applied to be given a right to vote did not meet Malta’s Constitutional requirements to vote. The Electoral Commission has since reacted, stating that almost half of the 91 found do not meet requirements, meaning that it will not object to 31 of the 91 cases filed by the Opposition. The Nationalist Party had filed 91 cases in court to have them removed from the Electoral Registry.