Why due diligence is central to Malta’s citizenship by investment agency

Jonathan Cardona, CEO of the Malta Individual Investor Programme Agency, discusses what the programme offers to investors and to the country


Founded in 2014, Malta’s Individual Investor Programme was the first to be recognised by the EU, creating a convenient and efficient route to European citizenship for international investors. Since 2018 the programme has been administered by the Malta Individual Investor Programme Agency; its CEO, Jonathan Cardona, explains the benefits to investors and to Malta, how the programme has evolved as the citizenship by investment industry has become more competitive, and what the future holds for these programmes.

European CEO: Tell me more about Malta’s Individual Investor Programme; what does it offer to investors and to Malta?

Jonathan Cardona: So, Malta’s a small island, with limited resources. And the idea of the government was to attract as much as possible, new talent, entrepreneurs, who can bring new investment and foreign direct investment on the island.

The main thrust of what Malta can offer: it’s a European jurisdiction, ultimately. It’s a very safe, stable, growing economy. And it can be easily considered as a second home for many people who are seeking to have a second base for their family.

To Malta it has offered a number of benefits. The programme is based on a contribution, so there’s direct cash input into our economy. Apart from that, there’s economic activity generated by the individuals who come, because they need to purchase property, they need local services, healthcare, education.

Over and above that, a number of these individuals over time have invested on the island. And I think that’s the best part of the whole programme: seeing real investment which before was not there.

European CEO: Citizenship by investment has become very competitive in recent years; how has Malta’s programme evolved?

Jonathan Cardona: Our work is two-pronged. First we have to promote the programme, so, we need to ensure that it is on the map of the people who are seeking a second citizenship out there. But by far the bulk is risk assessment and due diligence.

We need to ensure that we take the right approach, make the proper analysis of the individuals who are coming over, and take a decision on that.

Due diligence has become, I think, the most crucial part of our programme. We have implemented a four tier system:

The first step is that we go to the police authorities, which in turn they go to their international counterparts, to ensure that the persons are who they say they are, and that there are no international issues with them.

Secondly, we check the application for correctness and completeness. So there are internal checks to ensure that all the documents tally; the story actually builds up.

Then the third one is, we have a number of service providers which help us bring information from proprietary databases, from intelligence on the ground.

And the fourth tier is, when we collect all that information with in-house intelligence, we build the picture of the family which has applied. And on that we build a discussion.

After four years we’ve built a lot of experience. We have modified and fine-tuned and implemented new procedures to ensure the right checks and balances within our system. It’s not a foolproof system, because risk analysis is a mix between art and science.

At the end we have quite a few rejections as well; so we do reject between 20 and 25 percent of the people who apply. But I think that is the strength of our programme.

European CEO: And what does the future hold for the citizenship by investment industry; and for Malta’s programme in particular?

Jonathan Cardona: I think the most important thing – and something that Malta has been really advocating for – is more collaboration between the different jurisdictions that have these programmes.

All of us do due diligence, all of us have checks, all of us identify the rotten apple. And I think what is important for the sustainability and strength of these programmes is that they share this information. In a secure and a legal way – but I think that’s important.

Having said that, I think that the market is growing. Globally more people are becoming rich. More people need mobility. And it’s becoming more mainstream ultimately. So, the numbers are growing – both from the supply side and the demand side. It’s just ensuring that good governance is there – something that Malta continues to promote, and that the right regulations, the right approach, should be established.

European CEO: Jonathan, thank you very much.

Jonathan Cardona: Thank you.