Maltas Golden Visa Program: Analysis of Its Social, Economic, and Political Impacts

November 07 2024 14:28:26 by PCLMedia

Malta's residency by investment program, commonly known as the Golden Visa scheme, has become a contentious issue in recent years. According to new research by the Daphne Caruana Galizia Foundation, the scheme has attracted significant investment, but it also raises questions about its long-term benefits for Maltese society and the transparency of its operations.

The report titled "Malta's Golden Visas: What Problem Are They Solving and Who Benefits?" reveals a number of concerns regarding the program. The majority of applicants (nearly 90%) come from China, with a significant portion of them not even residing in Malta despite holding a golden visa. This raises questions about the true economic impact of the scheme, as a large number of investors do not integrate into local communities. For instance, areas like Żebbuġ and Munxar in Gozo have seen sharp population increases, with 17% and 14% of residents respectively being golden visa holders, many of whom do not live in the country. This undermines the program’s intended goals of encouraging economic and social integration.

One of the key findings from the report is that the golden visa scheme is contributing to a competitive housing market, pushing up rental prices and making housing less affordable for low- and middle-income Maltese citizens. Visa holders must meet a minimum annual rent threshold of €12,000, or €10,000 in southern Malta or Gozo, which far exceeds the median rental price in many areas. While the property sector benefits from the influx of capital, local workers, particularly in the real estate market, face declining wages and increasing pressure on available housing.

Moreover, the research highlights the limited impact on the broader economy. While the golden visa program is estimated to have generated €55.8 million for the Maltese economy in 2023, much of this money has flowed into the property sector with little trickling down to other parts of the economy. Transparency concerns are also pervasive, with some intermediaries in the visa process, such as law firms and consultants, benefitting disproportionately from the program. In addition, potential conflicts of interest are evident, with some individuals involved in the scheme having close ties to Malta's political elite.

The report underscores the opacity surrounding the golden visa process, with many intermediaries and companies involved in the sale of visas operating with minimal oversight. For example, Shanghai Overseas was the leading concessionaire, processing over 2,200 applications between 2016 and 2021. Despite the heavy Chinese involvement in the program, there is a stark discrepancy between the number of golden visas granted and the actual number of Chinese nationals residing in Malta, suggesting that many applicants do not intend to settle in the country.

The program's lack of regulation and potential for misuse, including facilitating money laundering, has led to criticisms from transparency watchdogs and EU lawmakers alike. In 2022, the European Parliament condemned the lax oversight of citizenship and residency by investment schemes across the EU, calling for more stringent controls. MEPs demanded in-person interviews with applicants and better verification of their wealth sources. This is particularly important considering the involvement of certain individuals with ties to the country's political and business circles, such as former Maltese ministers and members of the Residency Malta Agency board, who have moved on to become intermediaries in the golden visa market.

In conclusion, while the Golden Visa program has undoubtedly attracted investment into Malta, the research reveals that its benefits to society are questionable. It has contributed to rising housing costs, disproportionately benefited certain sectors, and created opportunities for potential conflicts of interest and corruption. The Daphne Caruana Galizia Foundation urges the Maltese government to reevaluate the program, calling for a more balanced approach that prioritizes the long-term welfare of the Maltese population and ensures greater transparency and accountability in the visa process. Without such reforms, the program risks continuing to serve the interests of a few rather than the broader Maltese society.