Malta and Bulgaria – two sunny countries with many similarities, but also quite different in terms of their investment naturalization programs.
We are often being asked by our customers to outline the benefits, as well as the pitfalls, of the Bulgarian and the Maltese “Citizenship by Investment” programs. Which country of the two provides better advantages to its citizens and which citizenship is easier to obtain? These are the two most important questions to consider indeed: the ease and cost of the naturalization process and the advantages that are being provided to the new citizen after the naturalization procedure has been completed. As usual, we have evaluated each of the programs and have applied assessment points of 1 to 10 (1 being the worst and 10 the best). We have divided the criteria into three groups: "General criteria", "The ease and the cost of the naturalization process" and "The advantages for the new citizen". For the end result, we have applied a multiplication factor of one for the first group and a factor of three for the second and the third groups (as we consider them as being much more important).
The result is an overwhelming victory for Bulgaria with 84% against 54% for Malta, mainly because of the ridiculously high cost of the Maltese citizenship (please read more about the cost factor below). For that reason, we consider the current "Citizenship by Investment" program in Malta for being just too expensive to be even evaluated as viable naturalization option. For another naturalization programs comparison, please read our article about "Bulgarian vs Cypriot Citizenship by Investment Programs".
Below is our analysis and comparison of the Bulgarian and the Maltese naturalization programs, which you might find interesting. For any questions, please don't hesitate to contact us.
1. General criteria (climate, location, taxes, international memberships and treaties, etc.).
Both countries are fully fledged members of the EU, Malta from 2004 and Bulgaria from 2007. Malta is not a NATO member while Bulgaria is. Both countries have sunny climate and well developed seaside resorts. Malta has longer summer season, while Bulgaria has beautiful ski resorts offering one of the best conditions for winter sports in Europe. Bulgaria, being much larger than Malta and strategically located at the eastern part of Europe, has much better developed road and air connections with most countries worldwide, while Malta as an island in the Mediterranean Sea, has strategically situated sea ports. Bulgaria offers lower tax rates to its residents/citizens than Malta, namely a flat rate of 10% for both corporate and personal taxation while Malta on the other hand has much more complicated tax rates ranging from 15% to 35%. Having in mind that both Bulgaria and Malta are EU member states, meaning that having the nationality of either of them, provides the unrestricted right to live (work, study, etc.) in the other country (as well as all other EU countries), we award both Bulgaria and Malta with 8 points.
2. The ease and the cost of the naturalization process (obtaining the citizenship).
Probably the most important factor, when it comes to obtaining EU citizenship by investment, is the cost and the ease of the naturalization process. To our surprise, many of our customers do not understand, rather do not realize the difference between “investment” and “cost”. Let us make it very clear; while by “investment”, it is meant a sum of money (or other equity) that needs to be invested on the applicant’s name and is later returned alongside with eventual profit (return), “cost” is a fee, charge, you can name it anything, but it is a loss – something that the investor pays to the government (most often) and will never receive back. Everybody has made “investments” – be it term deposit in the bank (certificate of deposit, CD), bank savings account or purchase of a house or apartment. All that is considered to be investment. Everybody has also made “costs” – speed ticket, other penalties in any form, etc. No matter how simple and intuitive it is – please differentiate clearly between “investment” and “cost”. “Investment” is yours to keep and collect dividends, interests, etc. from it, while “cost” is money that is paid to someone else and will be never returned to you.
The Bulgarian Citizenship by Investment program requires a total investment of at least 1 024 000 EUR. This can be done in virtually any form – shares, bonds, even plain bank account with the “trust” management option where the applicant can also instruct the Bulgarian bank to buy any financial or other instruments at all worldwide markets - NYSE, NASDAQ, LSE, Euronext, etc. This is investment (not to be confused with cost) – the applicant remains at all stages, the legal owner of his investment and will receive all interests and proceeds that the investment might deliver. There are no substantial costs imposed by the Bulgarian government for the naturalization process. The required investment will not benefit greatly the Bulgarian economy (as all proceeds are for the account of the applicant, not for the government), it is more a prove that the applicant has serious and sustainable business and income and will be most likely not taking advantage of the Bulgarian state social security benefits, although he will be fully entitled to it once the citizenship is granted.
The Maltese naturalization program on the other hand, requires the applicant to pay a hefty, least to say, fee (called contribution) to the Maltese government. Namely, the main applicant will be charged with the heartbreaking amount of 650 000 EUR, while his wife and minor children will additionally need paying 25 000 EUR each and his other (adult) children will pay 50 000 EUR per person. These amounts are costs – non refundable money paid to the Maltese authorities for the privilege of being their future citizen. On top of these costs will come the processing and legal fees, etc. as well as the investment requirements by the Maltese program that will be outlined below. Having in mind all that, we really do not understand why would someone be willing to pay 650 000 EUR (non refundable), plus all associated costs linked to the legal process and also make the required investment for the sake of obtaining Maltese (or any other) citizenship. For that amount of money, one could setup a foundation helping thousands of disabled or abandoned children in Europe and probably get EU citizenship under one of the many of the EU naturalization programs for extraordinary contribution to the society.
Additionally, the would be Maltese citizen will have to invest another 350 000 EUR in Malta real estate, thereby paying sales taxes and eventually even VAT as well as another 150 000 EUR in governmentally approved securities. Although these amounts count towards “investment” and not “cost”, bearing in mind the restrictive conditions applied by the term of “governmentally approved securities” as well as the eventual taxes on the properties purchase, this "investment" is likely to attract additional “cost” for the applicant. Last, but not least, the Maltese program applies additional conditions for its citizenship by investment, namely the applicant to establish a “genuine link” with Malta. Most of the time, this will be enforced by requirement to provide donation to a charity or similar monetary sacrifice (as if the 650 000 EUR contribution were not enough). All in all, only the fees (contributions) payable to the Maltese government amount to about 900 000 EUR - not refundable (not to be mistaken with "investment").
As for the speed of obtaining citizenship, it is approximately 18 months for Bulgaria and about 12 to 36 months for Malta, depending on different factors.
Having all that in mind, especially the extremely high cost for the Maltese program, we award Bulgaria with 9 points, while Malta receives the lowest possible 1 point.
3. The advantages for the new citizen (right to reside in EU, access to education, healthcare, visa free travel, etc.).
Malta and Bulgaria are full members of the EU, meaning that the holder of either nationality enjoys the same rights and privileges in all EU countries – the right to travel, live, work, study, buy real estate that is not available to non-EU citizens, access to healthcare, consular protection, etc. Within the whole territory of the European Union, it is of absolutely no importance whether someone is holding, Maltese, Bulgarian, German or Swedish passport – all EU citizens are treated equally. The only exception is the voting right, which is usually granted to the elections in the country of citizenship, meaning for the purposes of our current comparison that the Bulgarian citizen has the right to vote in Bulgaria while the Maltese citizen will vote in Malta.
When it comes to worldwide travel, the situation is slightly different. Although the EU has a directive for visa reciprocity meaning that all non-EU countries should in general apply the same visa conditions to all EU member states, the directive is not yet fully enforced. In total, Malta has a slight advantage over Bulgaria with about 5 countries more that can be visited visa-free with Maltese passport. Although this inequality will be eliminated in future, under the EU directive, it is still existing and therefore we will be assessing higher points to Malta.
All in all, both the Maltese and the Bulgarian passports are perfect travel document for use worldwide so we grant 9 point to Malta and 8 points to Bulgaria.