Further delays to new Maltese citizenship law

Posted: 20/02/2014

In October 2013, Malta's Prime Minister Joseph Muscat announced new and more flexible rules for individuals and their immediate families to acquire Maltese citizenship (click here for details).  The new rules would not require individuals to permanently reside or buy property in Malta.  As a result of acquiring Maltese citizenship, an individual would be able to benefit from the right of free movement within the European Economic Area (EEA).

This ‘Citizenship-by-Investment’ option, which is also known as the Individual Investor Program (IIP), was to be piloted throughout November 2013. However, it has received much criticism, particularly from EEA countries.

Although the Maltese Government has presented its proposal to the European Commission, which has stated that ‘member states have full sovereignty to decide to whom and how they grant their nationality’, the Commission is still analysing the text of the new citizenship Act to confirm that the ‘effective residence’ requirement is met.

The law requires clarification on several residency-related issues, including the way in which effective residence is assessed. For example, it does not confirm how applicants become legal residents of Malta.

In addition, inconsistencies have been discovered between the English and the Maltese versions of the Act. It has been reported that in English the law states that applicants must retain a residential property in Malta for at least five years whereas in Maltese the law states three, not five, years.

It remains to be seen when, or if, the IIP will come to fruition. Penningtons Manches LLP will continue to report on developments in the proposed Maltese Citizenship-by-Investment option.

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