As European nations deal with the socio-economic effects of migration, Malta’s Golden Visa program is causing concern. This program, designed to draw foreign investors, raises issues around housing costs, residency rules, and economic goals.

While the program has boosted investment in Malta’s real estate market, critics argue that it drives up housing prices, reduces affordable options for local renters, and raises doubts about its social impact and oversight.

Drawing foreign investors with Malta’s Golden Visa program

Malta’s Residency by Investment Program, often called the Golden Visa program, lets non-European Union (EU) nationals gain Maltese residency through financial investment, usually by buying or renting property.

This residency provides quick access to the Schengen Zone, appealing to investors who value ease of movement within Europe. The program attracts a wide range of people, from global business professionals to families seeking stability in Europe.

Recent reports show that nearly 90% of these investors are Chinese nationals. From 2016 to 2021, Chinese citizens obtained 5,200 golden visas, far exceeding the 2,700 Chinese residents officially recorded in Malta during this time.

Rising rents and mounting tensions in Malta’s housing market

In cities like Żebbuġ and Munxar, where golden visa holders make up a noticeable part of the population (about 17% in Żebbuġ and 14% in Munxar), the impact is clear.

The arrival of these visa holders raises demand for rental homes, often competing with Maltese residents for properties costing €1,000 or more per month.

For many locals, this competition is tough to sustain, especially since the visa program requires an annual rent of €12,000 or €10,000 in designated “affordable” areas like Gozo.

For low- to middle-income renters in Malta, finding affordable housing has become more difficult, as they now compete with wealthier visa holders for mid-priced rentals.

This trend worsens Malta’s housing crisis, leaving more residents feeling priced out of their own communities due to rising foreign investment in real estate.

(Image courtesy of Florival fr via Wikimedia Commons)

Residency or mere investment?

A key contention is that many Golden Visa holders don’t actually live in Malta. They meet the minimum residency requirements, often renting a property just to comply with the program while living elsewhere.

The Daphne Caruana Galizia Foundation reported that out of 2,500 applicants, only 67 bought property, while the rest rented. This suggests that, for many, the program is mainly a way to gain access to the EU rather than a commitment to living in Malta.

Economic gains or social disruption?

Supporters argue that Malta’s Golden Visa program brings major economic benefits, with the government reporting around €55.8 million in direct revenue in 2023.

However, most of this investment goes into the property market, which critics argue does little to boost the economy aside from raising real estate prices.

The rental market, in particular, mainly sees higher prices, which many believe benefit foreign investors more than Maltese residents.

Unlike some EU countries that channel similar programs toward innovation or public services, Malta requires property investments, often resulting in property purchases or rentals with little social or economic integration.

This limited focus raises questions about the program’s long-term value for Malta’s wider economy.

Evaluating EU policy on Golden Visa schemes

The European Parliament has raised concerns about the transparency and oversight of residency-by-investment programs. In 2022, it called for countries to conduct in-person interviews with applicants and closely examine the sources of their wealth.

Fears about potential misuse, such as money laundering and tax evasion, have led to demands for stricter EU-wide regulations, with Malta’s program under particular scrutiny.

Malta’s government has resisted changes, focusing on the program’s economic benefits. However, watchdogs and advocacy groups argue that the program should be restructured to balance local economic needs with foreign investment better.

A report from the Daphne Caruana Galizia Foundation points to potential conflicts of interest in the program’s administration, suggesting that reforms could improve transparency and increase local benefits.

Welcoming foreign investors and balancing local needs

The Golden Visa program affects both short-term visitors and long-term migrants in the EU, affecting access and affordability.

For short-term travelers, the upcoming European Travel Information and Authorization System (ETIAS) will provide a more consistent entry process, which may reduce some demand for residency-based access.

However, for long-term migrants seeking stability in the EU, the program highlights ongoing debates about fair immigration policies and housing access.

Malta’s model serves as a contentious example for EU countries. While it brings economic benefits, it raises concerns about the social impact of prioritizing investment-based residency.

For locals, this added competition may worsen housing affordability, while other EU countries may weigh the impact on social cohesion before adopting similar programs.

Investing in Malta

Malta’s Golden Visa program shows the challenge of balancing economic growth with social well-being.

As the EU considers reforming or ending similar programs, Malta’s experience highlights the need for better oversight.

The core question is whether Malta will prioritize quick financial gains or adapt policies to benefit both its citizens and responsible foreign investors.

Malta’s program faces ongoing scrutiny. While the revenue it brings is significant, the real challenge is creating an immigration model that benefits the country and its people. 

As housing pressures rise, Malta’s Golden Visa program serves as a case study on the risks and rewards of investment-based residency, pushing the nation to find a balance between economic goals and community needs.