Foreigners are snapping up real estate on a tiny Mediterranean island to get EU citizenship, and it highlights the significance of 2nd passports as status symbols among the wealthy, Business Insider – Business Insider Singapore

Malta’s real-estate market is on fire.

Thanks to a robust economy and government incentives to foreign buyers and businesses, the Mediterranean island’s property market is one of the world’s strongest, Ruth Bloomfield for The Wall Street Journal reported. Asking prices have increased by more than 10% in the past year, she wrote, citing Knight Frank’s latest Global House Price Index.

The island is drawing in overseas buyers, who are paying anywhere from $247,000 for a two-bedroom apartment on the south coast to $505,000 for a two-bedroom apartment on the Golden Mile along the northeastern coast (the most popular location for overseas buyers). A four-bedroom estate in the northern part of the island, Bloomfield wrote, is going for $4.7 million.

Malta’s great weather, lack of a language barrier, and laid-back lifestyle hold a lot of appeal for foreign buyers, but there are greater advantages at play. Alan Grima, the CEO of Dhalia Real Estate Services, told Bloomfield that 60% of foreign buyers are from the EU, including workers of international companies who’ve opened offices in Malta.

But Americans are seeking the option to become EU citizens.

Malta offers wealthy people 2 different ways to buy their way into citizenship via real estate

Malta’s individual-investor program (IIP) offers citizenship to applicants who rent or buy a property, Bloomfield reported. They’re taxed relatively little – income tax is a maximum of 35% and there are no wealth taxes.

There are several investment options to buy citizenship in Malta. If going the real-estate route, foreign buyers must invest at least €350,000 ($394,000) in property or a property-rental contract for at least €16,000 ($18,000) to qualify for citizenship, Nuri Katz, the president of the international financial firm Apex Capital Partners, previously told Business Insider.

Buyers closing on property in Malta must first sign a “konvenju” (promise of sale) with a 10% deposit and a 5% buying tax, and can expect the sale to close within three to six months, according to Bloomfield. Unless a property is in a designated development or purchased through a trading company, foreign buyers are allowed to own only one property. They must also hold the property for at least five years to qualify for citizenship in Malta, Katz said.

Malta’s program is a citizenship-by-investment program (CIPS), in which wealthy people invest in a country in exchange for citizenship. Once they have citizenship, they then have the basic rights of any other citizen of that country – like owning a passport, Katz said.

But a second passport buys more than a travel document – it also buys them status. “It’s a status symbol – it shows friends you can afford it,” Katz said. “I call it the black American Express syndrome.”

Beyond status, there are also physical advantages to owning more than one passport. Armand Arton, the president of Arton Capital, previously told Business Insider that investors primarily seek increased global mobility, better security and education, diversified business opportunities and tax-planning strategies, and an improved quality of life.

And Malta isn’t the only country where you can invest in citizenship – the opportunity is available everywhere from Thailand to Cyprus.

This content was originally published here.

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