EU shrugs off European race to woo rich foreigners By Laurence Peter

BBC News Published duration 18 November 2013

image copyright Reuters image caption Some Maltese say their country's new scheme devalues citizenship

The European Commission says it has no influence over EU countries offering inducements to non-EU nationals to take up residence or become citizens.

A Commission spokesman, Michele Cercone, said "it's a national competence - the member states decide who is entitled to become a citizen".

On Tuesday Malta's parliament set a price tag for acquiring citizenship: 650,000 euros (£548,000; $873,000).

Some other EU countries have also eased their citizenship rules.

Speaking to BBC News, Mr Cercone said that owning an EU member state's passport "immediately entitles citizens to European citizenship", with all the rights covered by EU law.

Malta, like most of the EU's 28 countries, is in the Schengen zone, where citizens can mostly travel without passport checks.

EU single market rules have made it easier for EU citizens to travel to, and work in, another EU country. They also have access to the host country's public services such as schools and healthcare.

Attracting the rich

Malta has put a Jersey-based company, Henley and Partners, in charge of promoting Maltese citizenship, targeting wealthy foreigners.

Citizenship will be granted to an applicant who deposits at least 650,000 euros in a new National Development Fund.

Applicants will undergo strict vetting, "thus ensuring only highly respectable clients will be admitted", the company says on its website

If the applicant has a spouse or any child under 18, the dependents' citizenship fee will be 25,000 euros each.

Malta's Prime Minister Joseph Muscat said the new citizenship scheme was likely to bring in about 30m euros annually.

The scheme was attacked by the Maltese opposition, who said the tiny island state would become like a Caribbean offshore tax haven. Malta's population is 419,000.

And a conservative German Euro MP, Inge Graessle of the Christian Democrats (CDU), said "citizenship for money is cynical - this has nothing to do with European values".

Since the financial crisis rocked EU economies in 2008, many member states have offered incentives to attract investment by rich foreigners, including easier terms for residency and citizenship.

Spain grants residence to foreigners who spend at least 500,000 euros on real estate or invest at least 2m euros in Spanish government bonds.

image copyright AFP image caption Hungary is issuing thousands of passports in neighbouring countries

Hungary grants residence to foreigners who invest at least 250,000 euros in government bonds.

Hungary has also granted tens of thousands of passports to people in neighbouring countries, including Serbia, which is not in the EU. There are only two conditions - a direct ancestor who was a Hungarian citizen, and a basic knowledge of the language.

Cyprus says foreigners who lost at least 3m euros in its banking crisis this year will be able to apply for citizenship. Most of those affected are Russians.

Cyprus has also cut the amount of investment required to be eligible for citizenship, from 10m euros to 3m, in its existing "citizenship by investment" programme.

British incentives

The UK also offers a fast-track residence scheme for foreigners prepared to make a big investment.

The UK has tough conditions for granting citizenship, including a citizenship test.

But wealthy foreigners can settle permanently in the UK if they have been continuously resident for at least two years.

"Continuous residence" means not spending more than six months outside the UK in any 12 consecutive months.

The continuous residence requirement is two years for individuals who have at least £10m in personal wealth in the UK; three years for those with at least £5m in the UK and five years for those with at least £1m.

A document on the EU's European Migration Network website , published in November 2012, says the Netherlands plans to give residence to foreigners with more than 1.25m euros in their bank account. "The Netherlands received signals that in China there are a lot of wealthy people who want to get abroad and can 'buy' a residence permit for Canada, Singapore or the USA," it says.

In 2011 the UK came top in the EU in terms of granting citizenship: 177,600 people became UK citizens, which is 22.7% of the EU total.

The EU's statistics agency Eurostat says France was second, with 114,584 new French citizens, then Spain (114,599), then Germany (109,594).

Eurostat says that, as in previous years, the largest groups of new citizens were Moroccans (64,200, or 8.2% of the total) and Turks (48,800, or 6.2%).