Let’s cut the confusion: Henley & Partners will receive payment from the passport buyer (a fee) and from the passport seller (a commission)
I am ASTONISHED at how difficult to understand so very many people have found this simple, basic concept: Henley will be paid by BOTH the passport buyer and the passport seller.
It will take a fee (Eur70,000 + additional fees for other family members) from the buyer. This has nothing to do with the Eur650,000 + additional sums for other family members which the buyer will pay to the Malta government, and is not taken as a cut from that sum.
It will take a commission (which the government refuses to disclose properly) from the Malta government. By definition, this is a cut from the sum the government receives from the buyer and is deducted from it.
To put it in terminology that might be better understood, Henley & Partners is a passport broker. It brokers transactions on passports between states which sell them (Caribbean islands and Malta) and people who buy them.
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In a nutshell, Henley & Partners are ‘sensara tal-bejgh tal-passaporti’.
The concept is the same as the brokerage for property deals. In Malta one needs to explain the obvious, and come up with simple comparisons so that the unsophisticated can understand basic concepts.
The concept isn’t the problem. It’s the contrasting versions we’ve heard from the government, its piecemeal release of information and the secrecy surrounding Henley and Partner’s contract that is causing confusion.
The concept itself is also a problem. I really find it difficult to swallow that the passport of a hitherto fairly respectable country can be up for sale – with discounts for bulk to boot.
The distinction was clear in the Russian presentation. They didn’t use the word “fee” there, but “honorarium” (гонорар), whose amount is unspecified.
Joseph Muscat: from self-professed statesman to passport salesman.
He was already a salesman at Alfred Mifsud’s Crystal Finance and I don’t think the sale of fireworks material was being handled by the father alone, without the help of his only son.
Salesmanship is in his blood.
The government pays Henley that 4% commission only if a passport is actually sold. This means Henley has every incentive to sell as many passports as possible.
Because the government’s contract with Henley is not being published in its entirety, there is serious doubt as to what happens to the 90% placed in an “independent investment vehicle”.
“9.8 The Contribution under the Contribution Option shall be paid into the IIP Account, from which payments must be allocated by the Concessionaire, following the grant of citizenship, as follows:
(a) an amount equivalent to 6% (six percent) of the Contribution shall be paid to Identity Malta Agency;
(b) an amount equivalent to 4% (four percent) of the Contribution shall be paid to Concessionaire as the “Marketing and Processing Fees”; and
(c) the remaining amount 90% (ninety percent) in the IIP Account, after payments of the items under clauses 9.8(a) and 9.8(b) hereof, shall be paid into an independent Investment Vehicle.”
Point (a) just sounds blond. But what IS interesting re-reading the clause is the handling of monies by the concessionaire.
This clause refers to the Contribution Option which implies there are other options. We obviously do not have the full picture here.
€70,000 processing fees paid by client
€26,000 commission paid by government of Malta
€ 7,500 due diligence fees paid by government of Malta
That’s already €103,500 that Henley will receive for every passport. I’m quite sure there are other expenses and charges we haven’t been told about, and that they’ll bring the amount to the €140,000 that Jason Azzopardi spoke of.
The absence of transparency leads to speculation. And it would be foolish to speculate that vinegar will turn into wine.
Giving piecemeal information has become the hallmark of this government. If there are negative reactions Joseph fixes things along the way and sends another emissary for a press conference or an interview to ‘reveal’ a bit more.
Plus 50% surcharge on top of the fee`s for fast tracking.
That is faster tracking than the scheduled 12 weeks.
Who would pay a 50% surcharge to fast track a 12-week procedure?
The applicant would be vetted by the same company, Henley, who are paid to do the vetting by the government of Malta.
Henley has a monoply of sourcing the applicants, vetting the applicants and recommending the applicants for citizenship, i.e. a Malta/EU passport.
1. Henley should highlight an appropriate disclaimer notifying the applicants that their passport/citizenship can be nullified in the future.
2. Henley can simultaneously assure the applicants that their full `investment` and fee`s will be re-imbursed by Henley in the event of the government of Malta nullifying the process.
3. The Nationalist Party has declared that this whole process shall be nullified, so will they please log a legal position stating that this is the case and that Henley shall be liable for the applicants consequential costs and not the tax payers of Malta.
4. Most European Union countries have a wide variety of residency schemes which generally, after 5 years, allow the individual to apply for citizenship without any certainty that it will be granted. Some countries have reduced this to 3 years if there is genuine investment of a substantial sum, for example in the UK this is an investment of GBP10 million in UK government bonds.
Our opposition leader is morally bound to block this plan.
He should go abroad on a mission to make everyone aware about this stupid proposal and get the Europeans, the Americans and just about every Faustian alien to wreck total havoc on this dastardly plan to sell (and so cheaply too) the little that makes us, us.
I just don’t care if he stamps his feet or puts his foot down; what is important is that this institutionalized nonsense is stopped altogether.
For the Opposition to say “I’ll revoke later” is just lazy, means absolutely nothing and doesn’t address the very serious problem that’s being created by some irresponsible idiot whose name has yet to be made known.
Simon knows full well that “stomping” his feet abroad would further highlight and compound the now almost irreparable damage to Malta’s image. We have spent over 20 years trying to convince the world we are not an offshore tax haven. Clearly the people in government were toeing a different line.
This is where the problem lies. The industry and clients see this as a huge faux pas but EZL in the video sees this as the next big thing since sliced bread.
The reason is simple, a criminal lawyer, two glorified village lawyers and their brave leader’s exposure to what they think is financial services consisted in helping one or two shady client relocate their wives, set up a seedy company or offer nominee services. Mur ghidilhom li the type of clients we are after and that they will scare away with this scheme pay €30m in taxes (at even if at 5%) each, every year.
If you elect hard-headed cabbages you will be left with a cabbage-patch.
I can assure you that the damage has been done already. I live in an EU member state other than Malta and work in this business.
I am repeatedly being told that Malta is turning into a tax haven and that unless one wants to attract the attention of one’s home tax department, then better steer clear. It was not the case six months ago. Extremely worrying.
Spot on David, too much damage will be done to the country, it will be too late in four years time. ACT NOW.
I agree totally.
This Government was elected with a mandate to build a power station, reduce utility tariffs, be transparent, and reduce taxes amongst other things… BUT NOT TO SELL MALTESE CITIZENSHIPS. Should there not be a referendum for a law/change of this magnitude?
Someone who agrees with the “push-back the Immigrants” policy tried to convince me to join the “muviment” with the argument that the immigrants are coming in large numbers simply to change our religion.
This raises a number of questions.
1. What exactly is “our religion” which ‘they’ want to take away? I know there are a number of Catholics (nominal and/or practising). But can we still be described as Malta Catolicissima?
2. To what religion will those applying to buy Maltese citizenship show allegiance?
3. Will it be a condition that one has to be of the same religious persuasion as many Maltese if his application is to be successful?
4. Has “making a lot of money by any good or bad means” become a form of religion acceptable to and conformable with “OUR religion”?