Hassle-free travel. Favourable trade. Better quality of life. It’s no surprise that you’re thinking about second citizenship in Europe. But with several European programmes to choose from, how do you know you’re making the right decision?
That’s where we come in.
Let’s look at two of the strongest citizenship-by-investment locations in Europe and the EU – Cyprus and Malta. Here, we look at the Cyprus and the Maltese Passport and Citizenship Program. Here’s how the two stack up.
It’s reported that 15 of the 20 most desirable second citizenships are European. That’s based on many factors but global travel is a common denominator. And both Malta and Cyprus are in the EU, which gives them added clout.
So they’re both pretty fantastic – but let’s look at each. Cypriot citizens can travel to 150 countries on visa-free or visa-on-arrival terms in 2018, making it the 13th strongest in the world when it comes to ‘Passport Power’ ranking. That’s a considerable improvement for most people.
But Malta goes even further. If you gain a Maltese passport through the Maltese Passport and Citizenship Program you can travel to 156 countries on visa-free or visa-on-arrival terms, making it the joint 7th strongest passport in the world in 2018.
If you gain a Maltese passport through the Maltese Passport and Citizenship Program you can travel to 156 countries on visa-free or visa-on-arrival terms, making it the joint 7th strongest passport in the world in 2018.
Let’s be honest though. The difference between 150 and 156 is nominal if your current passport is limited below the 100-something mark – which more than half the countries in the world are. In either case, these passports make a massive difference to your personal and professional freedom.
Speed and simplicity
The Cypriot citizenship-by-investment programme is undeniably the fastest route into Europe. You’ll get your permanent residency card within three to four weeks, then permanent citizenship and your new passport within around six months.
The application process is simple too. There are transparent, objective rules that govern acceptance – you simply need to apply, invest, and wait for your new passport to arrive.
By contrast, the Maltese programmes take a bit longer. The Maltese Passport and Citizenship Program takes around one year before you have your second passport. Saying that, the programme gives you Schengen Residence status for a year before your passport arrives, and you’re eligible from your application date. So although you don’t have the complete package for a year, you do have freedom to travel across the Schengen zone within a very short timeframe.
While the Caribbean is the classic tax haven, both Cyprus and Malta stack up nicely.
Cyprus is known for its highly favourable tax rates. The country has one of the lowest rates of corporation tax in Europe, at 12.5%, and non-domiciled residents only pay income tax on income coming from Cyprus. There are also various exemptions on offer including capital gains, foreign exchange gains and inheritance tax.
Malta also taxes based on domicile and residence rather than citizenship, so like Cyprus you’re not considered tax resident in Malta unless you reside on the islands for more than 183 days per year. Maltese residents aren’t subject to tax on foreign source income unless remitted to Malta, and aren’t subject to any foreign-source capital gains whether remitted or not.
Companies in Malta are taxed at a flat rate of 35% but a refund system means the effective tax rate is 0% to 10%. You might also qualify separately for tax incentives under the Maltese Global Residency Programme, which gives you taxation at a flat rate of 15% on remitted income. Malta also has double tax treaties with more than 60 countries, so you can avoid paying tax twice. Note though, there is a minimum tax liability per family of EUR 15,000 per year.
In either case you could be looking at significant wealth protection compared to your home nation.
Tax and travel are big reasons to consider second citizenship, but many other investors plan to relocate and embrace a totally new lifestyle. For some, better quality of life means total transformation – whiling away their days on a Caribbean beach. For others, it means a less dramatic – but still life-changing – shift to somewhere with better infrastructure, education, medical care or personal rights.
If that’s you, both Cyprus and Malta could suit you. Both are culturally rich, with a beautiful Mediterranean climate. Crime in both is very low – Cyprus is the 23rd safest country in the world, while Malta is 25th. Both have good infrastructure, and as a citizen of either you could also live, work and study anywhere else in the EU – fantastic for your children.
Both are culturally rich, with a beautiful Mediterranean climate. Crime in both is very low – Cyprus is the 23rd safest country in the world, while Malta is 25th.
Malta’s official languages are Maltese and English, and Italian is widely spoken. Maltese has very similar roots to Arabic, thanks to the island’s 9th to 13th century Arab inhabitants.
The official languages of Cyprus are Greek and Turkish. Over 75% of the population also speaks English, and French, German, Armenian, Arabic and Romani are common as well.
Overall, both are very popular relocation destinations with thriving expat communities.
Both Malta and Cyprus have real estate investment options, which most investors prefer because it represents a tangible asset in addition to citizenship.
For the Maltese Passport and Citizenship Program, your investment is divided into three parts, plus fees. To gain Maltese citizenship through the programme, you have to contribute EUR 650,000 into Malta, plus EUR 25,000 per child or spouse and EUR 50,000 per other dependent. Then you have to invest into property – either EUR 350,000 to buy, or a rental contract for EUR 16,000 per year for five years. Finally, you invest EUR 150,000 into government-approved bonds for five years. So you’re looking at a total of around EUR 1.2M to gain citizenship.
Cyprus stacks up similarly, with total investment starting from EUR 2M. This is made up of investment into property, or 2.5M of which 2M will be invested into a business and EUR 500,000 into property. Then you’ve got nominal professional and legal fees on top.
None of the three are cheap, admittedly. Second citizenship – especially second citizenship in Europe – is a luxury for those with means. But when you consider all you get for your investment, and that the majority of your investment is refundable or held in an owned asset, the cost seems very reasonable.
Hopefully you’ve now got a clearer sense of whether Cyprus or Malta would best fit your needs (and if not, get in touch and one of our team can help you decide). So what now? Let’s have a quick look at the process involved.
Both of the programmes are simple, but there is the odd hoop to jump through. In both cases, you’ll have to pass due diligence checks before investment. You’ll also be subject to background and criminal record checks once you apply, and the Cypriot programme asks that you’ve never had property frozen in the EU.
In both cases, you’ll have to pass due diligence checks before investment.
On top of this, the Maltese Passport and Citizenship Program specifically states you must be in good health – meaning you don’t suffer from any contagious disease or any condition that could burden the health system. The programme also has an unusual ‘genuine link’ clause, whereby you must show you have a genuine personal connection with Malta. This is a one-year ‘residence requirement’, or other proposed social, philanthropic, commercial or personal link that your second citizenship advisor can help you define.
Overall, the programmes are straightforward. In our experience, the majority of investors have little trouble and pre-screening diligence checks ensure you’re never unduly risking your time and investment.
Small differences; big returns
There are small differences between the Cyprus and Malta citizenship-by-investment programmes, but both countries offer an incredibly good deal. While the price-tag isn’t insignificant, the returns on your investment make both nations an exceptional choice if you want to travel more freely, break into the EU or embrace a new lifestyle.
Next Generation Equity specialises in dual citizenship-by-investment and residency-by-investment programmes around the world. To schedule a no obligation consultation.