Malta has just disrupted the market for citizenship, and boy is the United Kingdom not happy about it.
Countries don’t like to trumpet it, but it’s often possible for wealthy people in need of strategic re-location from troubled countries, or just trying to lower their tax bill, to purchase residency or even citizenship by investing in the country. Malta has just put an impressive offer on the table: You can buy citizenship in the country—and, thus, an EU passport—for just €650,000, or $895,895. (Update, Dec. 11: Malta’s government put this plan on hold after facing domestic political opposition.) As you can see in the chart below, that puts it in the middle range of countries offering immediate citizenship (they have a C after the name), below pricey Austria, but far above ultra-cheap Caribbean options that don’t offer anything close to the travel power of an EU passport:
The UK is upset about this development. Prime minister David Cameron has been putting on his anti-immigration hat of late and proposing plans to evict unproductive immigrants that entered as part of the EU’s common labor market, and this new avenue for just about anyone to buy their way into EU citizenship doesn’t jibe with that message. But Cameron may just be upset because Malta is offering a better deal than the UK, where $1.6 million is required simply to gain residency. If you could pay half as much to live under Malta’s low-tax regime and still hit London on the weekends, why wouldn’t you?
The sale of residency visas in Europe has been a growth industry since the global financial crisis, with countries desperate for foreign capital trying to attract it with promises of legal migrant status. The Portuguese “Golden Residence” program and Greece’s real estate investor program are typical of the ilk, while Cyprus is a little more adventurous: As well as qualifying by investment, any depositors who lost €3 million or more when the country’s banks suffered a haircut under an EU bailout can earn permanent residency. Think of it like a bank giving you a free toaster to keep your business, only replace yourself with a Russian tax evader and the toaster with permanent residency on a Mediterranean island.
Even the US is in the business, and while the price starts fairly low, participants in the US investor visa also need to prove they are creating at least 10 new jobs. Singapore, another favorite watering hole of the global plutocracy, not only demands serious investment but also a pedigree of economic success, with corporate revenue requirements for potential residents. Eduardo Saverin, the Facebook co-founder, renounced his US citizenship to make low-tax Singapore his home. It’s the American dream at work.