Malta’s golden passport scheme draws fresh criticism

Concerns centre on selection of Jersey consultancy to run operation targeted at the wealthy

A Maltese scheme that allows wealthy investors to buy EU passports has drawn fresh criticism amid concerns over its opaque operation.

The European Commission has been urged by MEPs to take action after Malta’s parliament questioned in a report the way the rights to run the scheme had been granted to a consultancy in Jersey. In their report, Maltese MPs said the government had failed to advertise properly the tender in international publications, leaving Henley & Partners, a Jersey consultancy that specialises in citizenship and visas, as the only credible bidder to run the scheme.

They also complained that it had failed to reassure them there was no conflict of interest among those making the decision to appoint Henley & Partners. Roberta Metsola, an MEP from the centre-right European People’s party, said: “The sale of citizenship without any tangible connection to a member state is something that is of concern.

European citizenship confers certain rights which should simply never just be put up for sale.” The Maltese MEP said such schemes raised questions “particularly in terms of transparency and security for this to be viable in the long term”. More than 1,000 passports have been issued by Malta as a result of the scheme, which was devised by Henley & Partners.

Both the government and Henley & Partners denied wrongdoing. Malta in 2014 pressed ahead with plans to sell EU passports for €650,000 apiece, even after the European Parliament approved a non-binding resolution that an EU passport should not have a price tag.

Malta later tightened eligibility criteria for applicants following an intervention from the commission. Malta’s programme has become a gateway for wealthy investors — mainly from politically unstable parts of the world — to secure a base in London. While relatively expensive, it promises a straightforward citizenship programme that then allows participants to operate throughout the 28-member bloc.

London law firms say that as many as three-quarters of their clients seeking so-called investor passports go to Malta and Cyprus rather than use the UK’s more onerous system. Malta plans to sell 1,800 passports, primarily to wealthy people from Russia, China and the Middle East and expects to raise a one-off €1.2bn, almost a third of annual government revenue.

The scheme appeared to receive a boost after Britain tightened its rules for such passports in 2014, demanding a £2m investment, a six-year wait and a requirement to live in the UK for half of that time. Kamal Rahman, partner at Mischon de Reya, a law firm, said: “What’s happening is that the global elite that the UK used to attract is saying, ‘I can have the benefit of being able to live in London whenever I feel like it without the burdens of the UK system’.”

The number of applications under the UK’s tier 1 visa scheme fell by 83 per cent in the first nine months of last year after the Home Office doubled the amount rich foreigners were required to invest.