Wealthy Russians made up the majority of those who joined the queue to buy a Maltese passport in the few months since the investment scheme was launched by the government last year.
They numbered over 90, a figure drawn from the first report by the regulator of the Individual Investment Scheme (IIP), Godwin Grima.
He said 54 per cent of the 173 main applicants during the first five months of the programme (until June 2014) were Russian.
Another 30 per cent of the applicants in that period were Asian citizens, particularly Chinese.
The applicants up to June also asked for an additional 197 passports to be issued to dependents. These may include their children, spouses or parents.
The regulator warned that although the programme was proving to be successful in terms of the number of applications attracted, Malta needed to be on the lookout to protect its reputation
Each main applicant must pay €650,000 to be granted citizenship, while dependents under 18 years of age must fork out €25,000 and those over 18 are charged €50,000.
According to estimates by Times of Malta, the potential cash revenue from applications submitted during the first five months amounts to €117 million. The government had estimated it would rake in only €30 million during the first year of the programme.
Capped at 1,800 main applicants, the IIP has a potential of bringing in close to a billion euros for Malta’s state coffers, 70 per cent of which will go towards a National Development and Social Fund for use in areas such as education, research and the environment.
Apart from the cash payments, applicants must also invest in Maltese property valued at a minimum of €350,000 or enter into a rental contract for €16,000 a year and invest some €150,000 in government bonds.
All these can be sold on only after five years.
In his report, the regulator warned that although the programme was proving to be successful in terms of the number of applications attracted, Malta needed to be on the lookout to protect its reputation.
“Perceptions are at times more formidable than reality. Hence, Identity Malta needs to quash any negative perceptions that may apply to certain regions and/or individual countries,” Dr Grima said.
While underlining the excellent relationship and collaboration between Identity Malta – the government’s agency responsible for the programme – and the regulator, Dr Grima described the requirement of proof of residency as a “grey area” which needed to be better defined.
Originally, the government did not want to include any residency requirement for the acquisition of Maltese passports.
However, following pressure from the Opposition and intervention by the European Commission, the government agreed to require applicants to have resided in Malta for at least 12 months immediately prior to the day of naturalisation.
The regulator said that although this requirement is stipulated in the law, its enforcement is still difficult. “The current regulations do not prescribe specific metrics upon which residency is based,” he said.
Even Identity Malta had admitted this was a grey area, he added, suggesting that the agency should develop a “procedural metric of residency”.
“The metric needs to be robust but, at the same time, flexible enough such that Malta retains its competitive edge,” he said.
According to the regulator, other changes in legislation are necessary to improve the IIP programme, including a proper distinction between the roles of Identity Malta and the private concessionaires (Henley and Partners).
Dr Grima said that although the law stated that the operation of the programme shall be carried out by the concessionaire, the impression given by the government during the meetings with the regulator suggested that Identity Malta had taken more of a lead in the implementation of the programme.
“The regulator feels that Identity Malta’s stance will lend more credibility to the process but still it would be more prudent to amend the legal notice to reflect the true state of play.”