In the increasingly aggressive investment visa competition, Spain is losing to the tiny island republic of Malta.
Since launching in March, Malta has processed more than 100 successful individual applicants, representing more than €100 million in direct foreign investment, according to Henley and Partners, the U.K. based group implementing the Malta Individual Investor Program (IIP).
In contrast, Spain’s “golden visa” program only attracted 81 investors in its first seven months, 72 related to property purchases, according to data released in May.
Malta, population 412,655, has developed a straight-forward, fast-track visa program, which is specifically targeting “ultra high-net-worth individuals,” according to promotional materials. Malta requires a €650,000 investment, compared to Spain’s €500,000 minimum buy in, and the program appears to remove the bureaucratic hassles and small print issues bogging down Spain’s program.
Malta also offers the same EU access and benefits as the Spain visa program.
“The Malta Individual Investor Programme was carefully developed and constructed to ensure that it would be highly attractive to the right kind of individuals,” Henley and Partners chairman Christian Kälin told Spanish Property Insight. “The early success of the programme is testament to its viability and security and gives a clear indication of the significant benefits that it will bring to Malta.”
Compared to other visa offerings, Malta’s program is “very relaxed,” Nick Warr, international head of wealth at law firm Taylor Wessing, wrote in a recent Knight Frank report.
Critics charge the Malta plan is simply an opportunity to “buy a passport,” an accusation Malta officials vehemently deny (see video below). The program features the “world’s strictest due diligence standards and vetting of applicants, thus ensuring only highly respectable clients will be admitted, according to Henley & Partners.
Any applicant must also “commit to retain a residence in Malta for a period of at least five years, either through the purchase of a property, for which the minimum value must exceed €350,000, or through leasing of a property, for which the minimum annual rent must exceed €16,000,” according to Henley & Partners. (Read more about the Malta program here.)
In dangling a visa in front of international investors, Malta joins Portugal, Cyprus, St. Kitts and a host of other countries competing for the attention of wealthy travelers.
The “golden visa” programs are inspiring a new form of “passport shopping,” Mr. Warr told Knight Frank. And more countries are likely to join the competition. “For any country short of capital, this is a quick way of getting hold of it,” he said.
That means more competition for Spain’s program, which is already starting to look like an also-ran. The program is still in its infancy, but Portugal issued 772 visas in the first 18 months of its program, primarily to Chinese investors.
Many factors may explain investors’ wariness toward Spain, including the continued price drops in the market. But complaints about the provisions and restrictions on the program are growing. Once taxes and extra charges are added to the transaction, the minimum investment in Spain’s program is closer to €600,000, analysts say.
In the Costa Brava, the visa program is “not relevant,” said Markus Thoene, managing partner of Sotheby’s International Realty, Barcelona and Costa Brava office. “People coming here are not coming here for a visa, they are looking for a home in the sun,” he said.
He believes the law targets the wrong market. “The focus of the law is not focused on immigration, it’s focused on investment,” he said. “Many of the expectations [of people interested in immigrating] are not met by the law.”
CNN Report on Malta Individual Investment Program