Passports for cash: Malta undercuts entire EU in passport market

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Passports for cash: Malta undercuts entire EU in passport marketMany EU Governments still struggling to come to terms with the financial crisis are on the lookout for new ways to attract foreign investment.

Of these, the exchange of passports or residency for cash and investment is on the rise – and particularly attractive to rich entrepreneurs from China and Russia.

Many EU governments take part in this, including Britain, which offers the ability to apply for permanent residency by either investing in a UK company or gilts (with a GBP 10 million investment allowing an individual to apply for residency in two years).

Yet in order to qualify, the individual must be a UK resident for six months of each year.

Located on other side of the bloc, Hungary now offers passports to any individual with Hungarian ancestry – widely seen as a political move to boost votes.

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Yet now, one of the EU’s 28 members – Malta – is undermining the market like no other.

Malta has stated that anyone willing to pay EUR 650,000 can obtain a Maltese passport.

Whilst applicants will be tested to guarantee they are not money launderers, terrorists or the like, they will not be required to have any residency or heritage-based connection to the island state.

Malta’s action is prompting small scale rebuttals within Malta, across the EU, and indeed around the world.

Since the scheme was launched in November, Maltese ministers, in the face of discontent amongst their political rivals, have had to make a series of concessions.

In addition, as any national, be them Arab, Chinese, Russian or other, will automatically acquire residency rights across the European Union, many foreign MP’s have begun to voice their fears.

David Hanson, the UK’s shadow immigration minister, has stated “This risks being a backdoor route to reside anywhere in the EU which is not a tight or appropriate immigration policy.”

The island has also been the subject of concerns raised by America and others, as those with Maltese citizenship can travel to America – and 160 other countries – visa free.

The idea is bound to raise further concerns.

EC policy

Part of the problem will be the fact the European Commission has no legal power to intervene in each state’s sovereignty laws.

However, as the move poses threats to other EU member states’ security, officials may open talks on common standards necessary to allocate EU-based passports – such as a minimum period of residency.

Immigration

The news comes as Ambassador William Lacy Swing, the International Organisation for Migration (IOM) Director General, called for members to address the irregular migration difficulties facing Malta.

This follows an agreement with Foreign Minister George Vella stating immediate action needs to be taken to alleviate illegal immigration across the Mediterranean, which often ends in tragedy.

The development was in part a response to the October 2013 deaths of migrants in the waters between Malta, Italy and Libya.

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