Only 3% of the Agents submitting IIP applications receive approval within 90 days and more than half of the applications approved after 180 days (6 months) of submitting applications, according to ORIIP.
The delays was caused by agents procure the required missing or additional documents, according to the ORIIP agency report published last week. Another issue was delays in opening bank account. The Office of the regulator report provides some guidelines to agents to speed up the approval rates, by submitting all required additional documents.
- IIP applications received in total since inception until Jun 30, 2018: 1431
- IIP applications approved since inception until Jun 30, 2018: 961
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Letters of approval issued within 120 days from the date of application |
3% |
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Letters of approval issued between 120 and 180 days from the date of application |
45% |
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Letters of approval issued after the lapse of 180 days from the date of application |
52% |
- Missing declarations is high. 4% of property declarations, 6% of insurance declarations and 14% of stocks/bonds/etc declarations were missing with IIP allications
- Opening of bank accounts causes delays. This is the additional challenge with applicants trying to open a local bank account or transfer funds to the MIIPA, indicating that these were causing delays in the process and which therefore were putting applications at risk.
- Article 7(8) of the IIP Regulations state that payment is to be received within 20 days, ORiip has noted that 14% of the payments were not made on time.
- Another issue is Ministers approval for newly added children
Agents
Currently there are 180 authorized agents under IIP scheme. In the ORiip report, agents simply lack experience and dont have enough knowledge of IIP requirements
- MIIPA stressed that it was highly important that all Agents performed their initial background checks on their applicants adding that, in order to avoid unnecessary burdens and also to safeguard both the Agency’s, the Agents’ and the country’s integrity, only reputable applicants should be presented.
- The MIIPA also touched upon the Agents, commenting that – unfortunately – during the past year it had experienced a decline in the quality of the performance of some of them to the point where some of the accredited Agents did not even appear to be very knowledgeable about the requirements of the programme. Following an internal evaluation the MIIPA deemed that this was due to either because the Agents in question did not submit applications frequently or because the employees working for the accredited Agents were not trained to compile an IIP application. As a result the Agency was suffering from an increased level of time wastage in hand holding some of these Agents in even the simplest of processes. Accordingly the MIIPA wished to urge its Agents to make sure that anyone compiling an application on its behalf was actually trained to do so and that he/she had a good understanding of the requirements of the industry, offering to provide training (if necessary) as it had already done in the past.
Guide for Agents submitting forms
The report also provides some guidelines on how to submit application forms properly, to speed up receiving approvals within 90 days.. The following have been identified as (non-exhaustive) examples of how application forms could be revised:
- Forms N, O, P and PDFEE could easily be amalgamated into one;
- Form PSC could be eliminated;
- An applicant need not have to endorse Forms N or O in two different sections;
- Certain sections within Form P make no sense in the case of very young dependants;
- In Form P one is asked to choose between “has been” and “have never been” (instead of between “has been” and “has never been”);
- In Form SSFW the main applicant can only choose between declaring to be employed or, alternatively, self-employed;
- Instances where the same information has to be inserted in different forms should be reduced. Presently a person is required to fill in his/her address and his/her place of birth on four different forms. Furthermore he/she is required to fill in his/her date of birth and his/her gender on three different forms. An applicant has to endorse Forms N or O in two different places. Also, the Data Protection Clauses need to be updated.
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There have been instances where additional applicants were added after the original application would have been submitted by the Agent to the MIIPA. The absolute majority of these were cases of children born after the application date and therefore could not be included in the first instance. In all cases the MIIPA accepts applications only if the Oath of Allegiance has not yet been taken.
Proof of Links
Regulation 7 (12) of the IIP Regulations states that no certificate of naturalisation shall be issued unless the main applicant provides proof that he has been a resident of Malta for a period of at least twelve months preceding the day of the issuing of the certificate of naturalisation.
The most common proof of links provided by the various main applicants was documentation ascertaining their physical presence in Malta. Similar to 2017 the most common type of documentation provided by the Applicants as proof were flight tickets (found in 95% of the applications), donations to local institutions (found in 55% of the applications) and invoices/receipts from local hotels (found in 48% of the applications).
Oath of allegiance
The ORiip considers the Oaths of Allegiance to be the definite proof that a successful applicant has completed the IIP process and has become a Maltese Citizen. The process is completed within two years from the date of application.
Publication of Names
One area of major concern for the Agents is the publication of names in the Government Gazette. One Agent even claimed that the vast majority of applicants (in such Agent’s case) had withdrawn their application due to the negativity created when names are published. According to those interviewed, the main reasons why applicants would be adverse to the publication of their names had nothing to do with allegedly having something to hide but was due to their wish to have their privacy respected and due to their fear of retaliation if their names were spotted by their detractors.
Some Agents noted that some applicants still go on to apply, notwithstanding the fact that they would not want to have their names published, in the hope that by the time that they are asked to make the second and final contribution (between 12 and 24 months after) such will not be the case any longer; and once this matter would not have been solved by then, they would simply not make their final contribution when asked to, meaning that all the time, money and efforts spent in trying to obtain this hefty individual investment would all go down the drain and the investment itself totally lost. In order to avoid all this, it is strongly suggested by the ORiip that immediately an application is accepted for processing by the MIIPA the applicant should formally be advised in writing that once he is officially served with the Letter of Acceptance in Principle, insofar as the payment of the second and final contribution is concerned, there would be no turning back for him/her and his/her dependents (including his/her spouse) and he/she would be legally bound to pay his/her second and final contribution in any case even if for any reason (other than proven and appropriately documented (a) medical reasons, or (b) serious family reasons, or (c) sudden lack of adequate financial resources to cope with the required outlay) he/she decides to pull back.
ORiip deems to be worth considering, who suggested that, instead of being published in the Government Gazette, the list should be subjected to parliamentary scrutiny whereby the Members of Parliament having access to the data would be bound by an Oath of secrecy.
Due diligence
Taking into consideration the approved applications vetted during the 2017-2018 period the ORiip has noted that 63% of the applications contained due diligence reports which found absolutely no issues and which were therefore immediately recommended for approval.
On the other hand the remaining 37% of applications contained a number of revelations requiring further evaluation by the MIIPA either through already available material or following checks on additional information / supporting documentation provided by the applicants upon request.
Property lease or purchases
Regulations stipulate that successful IIP applicants are obliged to either acquire or take on lease a residential immovable property in Malta and to retain it for at least five years from the date of purchase/lease without the possibility of subletting it. They would be entitled to dispose of the property or terminate the leasehold before the lapse of such five years provided that they purchase/take on lease another one which satisfies the above requisites. The property should be large enough to contain all applicants forming part of an application, whether the thresholds (€350,000 and €16,000 respectively for purchased and leased properties) are inclusive or exclusive of VAT, whether these amounts can include more than one premises or additional buildings (car spaces, garages, etc) and whether the properties in question are actually worth the quoted amounts. With regards to the assumed obligation that IIP Citizens are required to stay in such properties the ORiip is aware that there are cases where IIP Citizens have purchased/leased additional properties and that, when visiting Malta, would prefer to either stay in such secondary residence or in another location (such as in a hotel or on a personal yacht).
MIIPA has, throughout the years, imposed more stringent requirements on what is permissible or not. It has obliged the landlord (in the case of leased properties) to provide a declaration that the property in question is being leased solely to the would-be IIP citizen. It has also obliged the would-be IIP citizen to provide an architect’s declaration that the value of the property is in line with commercial rates applicable to other similar properties within the same area.
With regards to property inspections’ reports it has been noted by the ORiip that 346 inspections were carried out during 2016, 2017 and 2018. None of the site inspections revealed that the properties linked with IIP citizens were being used by third parties however there were a few instances in which a property was changed without the MIIPA being informed. On this latter point the MIIPA should ensure that Agents provide regular updates whenever required. In the majority of cases the inspected properties were classified as being in a very good condition.
GDPR Data Retention for IIP
The General Data Protection Regulation (EU) 2016/679 puts forward the principle that personal data and sensitive personal data should not be retained for periods that are longer than necessary. It came into force on the 25th of May 2018. In view of this the ORiip has reviewed its data retention policy in order to be in line with its provisions. With regards to IIP-related documentation the retention period has been set as follows:
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Type of document |
Retention period |
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Reports and other personal records in connection with vetted IIP Applications |
Within one week from the date when any related issues are satisfactorily clarified and/or addressed (normally no personal data is recorded during vetting sessions. However, in exceptional circumstances – i.e. in extremely rare occasions – such details might need to be recorded in order to verify the eligibility or otherwise of the applicant in question). |
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Complaints et simile including ad hoc correspondence |
Within five years from the date of last action taken or correspondence exchanged (whichever is latest) on the complaint in question. This does not apply in the case of pending complaints which shall be retained until a formal decision is taken in their regard by the IIP Regulator. After the lapse of the said five years, a copy of the conclusions and decisions reached by the Regulator (IIP), shorn of any personal data that may lead to the identification of the complainant and/or of any third parties that might have been involved, will, however, be kept on record for posterity’s sake. |
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General IIP Correspondence |
Within two years from the date of last action taken or correspondence exchanged (whichever is latest) on the subject being addressed. |
