Malta Citizenship Decline Attributed to EU Legal Threats by Regulator

malta citizenship
Citizenship by Investment
Published Date: 20.02.2025

Malta Citizenship by Investment (CBI) program has seen a significant decline in recent years. The country’s regulator, Carmel L. De Gabriele, attributes this drop to legal threats from the European Union. The European Commission’s infringement procedures, alongside the decision to refer Malta’s program to the European Court of Justice (ECJ), have made many potential applicants reconsider their interest in acquiring Maltese citizenship.

A Sharp Decline in Applications and Revenue

Malta received just 177 CBI applications in 2022. This includes 175 under the new MEIN policy and only two under the former MIIP. Compared to 2020, when there were 317 applications, this is a dramatic decrease.

The primary reason behind this reduction is the introduction of a mandatory 12-month residency requirement under the MEIN policy. As a result, fewer investors have opted for the program, contributing to the significant drop in applications and revenue.

Impact on Revenue and Investment Trends

The drop in applications led to a third consecutive year of declining revenue. From a peak of nearly EUR 400 million in 2016, revenue fell to just EUR 110 million in 2022.

A substantial portion of this revenue still came from mandatory contributions. Real estate investments also played a role, though fewer applicants chose to purchase property. In 2022, the average property purchase price exceeded EUR 3 million, although this figure was skewed by a few high-value transactions.

Changes in Applicant Demographics

The nationality distribution of applicants changed significantly in 2022. European applicants, including those from Russia and Ukraine, made up less than a quarter of the total applications, down from nearly 50% in 2021.

In contrast, applicants from Asia and North America surged, accounting for 38% and 30% of the total applications, respectively. This shift suggests a broader trend away from European-based applicants, likely influenced by ongoing EU scrutiny of Malta’s CBI program.

Real Estate Investment Patterns

While most applicants continue to rent their homes in Malta, a small percentage chooses to purchase property. In 2022, nine applicants spent EUR 27 million on real estate, which helped increase the average purchase price to more than EUR 3 million.

This pattern reflects a growing trend among high-net-worth individuals to make substantial investments in Malta’s real estate market, albeit in small numbers.

Government Allocations and Future Outlook

Since launching the program in 2014, Malta has raised EUR 1.8 billion through its CBI programs. Most of these funds have been allocated to the National Development and Social Fund, while additional amounts have gone to government agencies and Henley & Partners, the company behind the marketing of the MIIP.

As Malta faces a ruling from the European Court of Justice, Regulator De Gabriele remains hopeful that the court will recognize the country’s efforts to ensure the integrity of its citizenship process. He emphasized that Malta only grants citizenship to those who meet strict vetting criteria, ensuring they bring positive contributions to the country and the EU.

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Conclusion

Malta Citizenship by Investment program is facing a period of significant change. The sharp decline in applications, coupled with revenue drops and increased EU scrutiny, suggests that Malta may need to adapt its program to maintain its appeal. However, Malta’s commitment to rigorous vetting processes and its desire to ensure the program’s integrity remain key pillars in the country’s CBI strategy.

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