Malta government lies about €200m from sale of citizenship – figure off by at least €60m

It has just occurred to me to bring out my trusty calculator and check whether the government’s stated figure of €200 million from the sale of Maltese/EU citizenship adds up. And what do you know, it doesn’t – not by a long shot.

The official number of people who have become Maltese citizens under the sale-of-citizenship scheme since it began is 705. Of these, only 202 are main applicants who paid €650,000. The other 503 came in as their dependents, paying either €50,000 each (in-laws, grandparents, adult offspring) or €25,000 each (spouses, and offspring under 18).

202 main applicants x €650,000 = €131.3 million

503 dependents x €50,000 = €25.15 million

I have taken the maximum fee of €50,000, but in reality most of those 503 dependents will have been spouses and minor children paying €25,000, so the total will actually be a lot less than €25.15 million.

This gives a total of €156.45 million which is the maximum those 705 people could have paid for their Maltese citizenship under the published, official rates. This means that even allowing for all 503 dependents to have paid €50,000 and not €25,000, the government’s stated figure of €200 million is off by €43.55 million.

If you factor in that the bulk of the 503 dependents will have paid €25,000 and not €50,000, then the government’s official figure is off by even more.

Let’s say 400 of them were spouses and minor children rather than in-laws, grandparents and adult offspring: 400 x 25,000 = €10 million

And the other 103 paid €50,000 each: 103 x 50,000 = €5.15 million

So a more realistic figure is that 503 dependents paid just €15.15 million (€10m + €15.5m) for their citizenship. Add the €15.5 million for dependents to the €131.3 million for main applicants, and what you have is a sum of €146.8 million, which means that the government’s stated figure is off by (200m less 146.8m) €53.2 million.

But just a minute before you flee at the sight of all these sums and numbers, because it gets worse. Those €146.8 million are the full fees paid. From that amount, you have to deduct the commission and handling fees taken by Henley & Partners and by Maltese and overseas agents like law firms who ‘recommend’ applicants. Nobody has yet been able to get a clear answer on the percentage and structuring of these fees and commission.

So here’s the bottom line: the money that will go – because it hasn’t yet – to the government of Malta from the sale of citizenship to 705 people is €146.8 million less the fees/commission to Henley & Partners and other agents.

And that’s a far, far cry from the €200 million figure that the government has put out there in the press through its spokesperson Kurt Farrugia.

But then we should have got used to this by now: they put out a round, wrong figure and watch in delight as everybody eats it up as fact and it becomes embedded in popular legend.

But I would have expected better from the newsrooms, quite frankly, because all it takes is a calculator. We have the number of passport-buyers, we have this figure broken down into main applicants and dependents, and we also have the official fees. Even without information on whether the dependents paid €50,000 or €25,000, or information on the fees and commissions taken by Henley and the agents, it’s still possible to check whether the government has lied to us (again).