A tax consultant blogs from the Miami ‘citizenship’ conference at which Joseph Muscat spoke: ‘Finally, some good news from bankrupt countries’ – and Malta is one of them
Tax consultant Simon Black blogged from the Miami ‘citizenship’ conference organized by Henley & Partners, at which the Maltese prime minister spoke in November.
He is very much in favour of the sale of passports, for professional reasons that are much akin to Henley & Partners, and he also repeats the mantra about ‘attracting talent’ – which is disingenuous as he knows that somebody buying a Maltese passport is actually buying a European Union passport, quite unlike those who buy a passport issued by St Kitts & Nevis.
But what is most upsetting is that he reaches the conclusion which most international commentators and reporters have reached – that Malta is doing this because it is in dire straits financially. In Simon Black’s view, Malta is bankrupt, like St Kitts & Nevis.
This is now way beyond a joke – the constant stream of comments and conclusions that Malta is bankrupt, in crisis, in dire straits financially, is going to take its inevitable toll.
Black says that people will change their minds once the money starts rolling in. How patronising to the natives is that. Give them a cask of glass beads and a couple of bolts of cloth and they’ll decide not to simmer you in a cauldron for their supper after all.
People won’t change their minds, and it won’t change the damage done, either. It will make that damage worse. The money is rolling in to St Kitts & Nevis, all right, but how has the reputation of that country been helped? What selling passports has done to those islands is advertise the fact internationally that they are bankrupt.
Worse, they are not looking at real investment in developing the economy because taking the short cut of selling more and more passports becomes the easy, unsustainable way out.
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Simon Black’s blog-post:
Finally… some good news from bankrupt countries
November 21, 2013
Miami, Florida
Today I’m in Miami at a conference on Global Residency and Citizenship where I’m slated to speak this afternoon as part of a panel.
So far it’s been really interesting; there are several Presidents, Prime Ministers, Finance Ministers, Ambassadors, etc. from a number of countries– Malta, Cyprus, St. Kitts, Antigua, etc.
Each of them is here for the same reason; they’re trying to convince a room full of investors and attorneys to invest in their country.
Bear in mind, most of these countries are near fiscal straits. St. Kitts & Nevis, for example, has one of the highest debt levels in the western hemisphere as a percentage of GDP.
And you probably recall what happened in Cyprus– the government and banking system were in such bad shape that they had to ‘bail in’ the banks by stealing customer deposits.
They’re desperate to raise cash. And they’ve had to resort to innovative methods.
(…)
31 Comments Comment
Reply to Jozef Click here to cancel reply
http://www.sovereignman.com/trends/finally-some-good-news-from-bankrupt-countries-13205/
Cyprus, its bailout, Russian oligarchs and their deposits.
Our prime minister just cannot go beyond his first job, or his thesis.
But that was pre-Lehman Brothers. It’s HIS politics that’s old.
If Malta is bankrupt, you can thank Gonzi and Co.
[Daphne – The point we are making here is that Malta is NOT bankrupt – far from it – which is why it is so very irresponsible of our government to create that impression by doing things only the truly desperate might do.]
We surely can thank Gonzi for making Malta a country with a sound economy
And if it isn’t, do we get to thank ‘Gonzi and Co.’ anyway? Or do we praise Joseph Muscat for the Nationalist government achievements, because that’s what we do nowadays.
bridgette, wouldn’t it be better for you to learn the facts before commenting?
Yes, we do have to thank Gonzi and Co, but not for being bankrupt, as your dear Joseph is giving the impression with his scandalous scheme, but for actually keeping Malta’s economy one of the strongest in Europe up till March 2013.
Sweet, the new mantra according to Labour; the hofra with a delayed action.
Tell us, Bridgette Farrugia, how long before the piloted bailout to get at the EU, Cyprus style?
I’m sure Beijing will come to the rescue, bridges, flyovers and, even more flyovers.
You’re giving the game away.
Dear brigette it looks you try to follow your Joey but you are not even succeeding in that. Read well the following: Joey did not inherit a bankrupt Malta. He called all names the PN government to hoodwink the switchers, but could not say that Malta was bankrupt. He inherited a prosperous Malta, which was playing with the big ones under Dr. Gonzi.
Joey is in payback mode now as he still needs to honour the promises he made to those who helped him win the election. In the process he is damaging Malta’s reputation, which will eventually lead to bankruptcy.
Dear Bridgette ignores Labour implemented GonziPN’s budget this year.
Xejn, tqabbdilhom cable jixgheluh pajjiz.
If your lot can sell EU passports, you can thank Fenech Adami and Co.
If Malta is morally bankrupt, you can thank Joseph Muscat & Co.
So how was your Christmas dinner, ciccio? Tried any of my cocktail suggestions?
Your cocktale suggestions?
Oh yes, I tried the “Almond Blossoms” and the “Hu Go Fik” ones.
You certainly must be living in a cave.
Joseph Muscat himself on BBC, just 3 months after his election, said that Malta has a “sound economy” (his words).
Now, not only he is a hypocritical useless sod, but he is trying to disprove himself by basically selling our citizenship, because God forbid he admits that the Nationalists did good.
Also, a slight suggestion – in the event that we can start selling passports, start by selling yours and leave the country, so that you can reverse the bankruptcy done by “Gonzi and Co.”
So much for Muscat’s degree in economics. The man keeps spewing out poison which is killing Malta’s reputation and FDI opportunities abroad and doesn’t even know he’s doing it, or worse, just doesn’t care.
[Daphne – Joseph Muscat does not have a degree in economics. He read public policy.]
Sorry, my mistake. And yet he’s still presented to us as an ‘economist’ (at least initially) by the media. The mind boggles.
He is an expert at economising with the truth. Does that make him an economist?
Whatever he read I doubt HE wrote his thesis.
Does this sound like Joseph Muscat – or like Mario Vella?
“In the manner of philosophy, which, in the words of Hegel, like the owl of Minerva takes flight at dusk, at the end of a civilisation’s highest moment, this study begins with an investigation of a phenomenon that emerges, globally and historically, at the end of Fordist epoch of capitalism, or, at least, at a time of Fordism in crisis.”
It sounds like the work of someone who read Economics in an East German university at the time of the Iron Curtain.
Let’s qualify that statement. Muscat officially read public policy.
It’s some marketing research thingummy.
Whoever coined the phrase ‘GAS DOWN GOL-HAJT’ to describe Labour in government has been proved right.
Simon Black should know that one of the most bankrupt countries in the world is in fact the US. $18 trillion official debt plus unfunded pensions, healthcare and welfare which runs into many more $trillions.
Maybe we should take his US president’s example and start money printing.
Consider this scenario.
Joe Borg owns a house which is unoccupied. His lawyer contacts him and informs him of a client, Mr. X., who want to have a rental agreement for the purpose of buying a Malta passport. The lawyer offers to prepare a rental agreement for five years with a rent declared of 16,000 euros per year. The lawyer advises Joe Borg that Mr. X has no intention of setting foot in Malta (let alone in the house) nor making any rental payments.
To compensate him for the trouble, Mr X, through the lawyer, makes a one-off payment to Mr. Borg (of, say, 5,000 euros).
Mr. X satisfies IIP requirements and, provided all other requirements are satisfied, Government cannot refuse him a passport nor can this be refused to other members of his family.
Is it legal? I presume yes.
Is it ethical? No but the lawyer will not lose any sleep over it.
What are the chances of being found out? Very slim.
If found out, can Government withdraw the passport? No.
Given the loopholes in IIP, will property developers and estate agents benefit from the revised scheme? Hardly.
Moral of the story: The revised scheme is no better than what was approved by Parliament (except for the anonymity clause).
This revised scheme opens up to an infinity of loopholes, as you outlined.
What matters is to keep ‘investors’ away from exposure.
In the past, when I met people who are not from Malta I used to be asked the usual questions such as – What language do you speak in Malta? What is the main industry? However, in my recent travels all anyone seems to ask me about is the passport sale and if Malta is broke.
Meanwhile journalists in London have a bit more fun at our expense:
http://www.independent.co.uk/news/world/europe/a-greek-archipelago-for-85m-a-maltese-passport-for-1m-and-polish-castles-going-for-a-song-welcome-to-the-great-european-fire-sale-9032981.html
Do you blame the media for thinking that our economy has gone down the drain? Why else would we sell off citizenship and at such a low price?
But that’s the problem. We know the country isn’t broke.
The obvious conclusion as to why the government is so hell bent on introducing this scheme (when we don’t need the money) is that there are non-EU nationals who have been promised – for whatever reasons – EU passports.
The money is a formality.
Muscat is still running on the previous administration’s “fuel” I wonder what will happen when this “fuel” dries up. – Your guess is as good as mine –
Labour’s famous roadmap pivots on its connection with China.
The islands’ energy system, Pembroke as a super Chinese embassy, Maltese passports sold to Chinese, infiltration in the health and education system, revamping of sites with a Chinese theme and other investments which are still being brewed up.
Do they have a back-up plan? I doubt it.