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Uncertain Times? Stable Malta

Citizenship and residence by investment programmes are expected to become more attractive to high net worth individuals in China, as the trade war with the US intensifies and gradually escalates into a diplomatic standoff. In the present geopolitical uncertain times, exacerbated by the coronavirus (Covid-19) crisis, Chinese businesses are looking to create value and synergies in Europe, while Chinese families look at the security given by European citizenship and residence programmes.

"Malta" consistently on the target list of Chinese investors

But many European countries have problems of their own, and the pandemic will leave many European countries licking their wounds. Malta is expected to be one to the countries less impacted by the virus, and German credit rating agency Creditreform Rating has today given a stable outlook to Malta’s economy. This compares very favourably to four other EU countries which have been given a negative outlook status, and two other countries which have been downgraded. Creditreform’s report follows similar positive reports by Fitch Ratings, Standard and Poor's and Moody’s.

On Malta, Creditreform Rating is forecasting that “the economy should recover through the second half and beyond, as restrictive measures are gradually eased". The German agency predicts that the policy efforts devoted to Covid-19 should mitigate the worst effects on the corporate and household sector. The report forecasts an economic growth of 5% in 2021, which relies on good prospects in i-gaming, as well as large capital investments.

Chinese flag in Valletta, Malta
The Chinese Cultural Centre in Valletta

Creditreform lauded the Maltese government’s Covid-19 mitigation incentives, which it termed as “a substantial policy package" that would minimise corporate bankruptcies and redundancies. The agency was undeterred by the hefty cost of the package, noting that Malta's favourable initial fiscal position, together with the fiscal prudence demonstrated in the recent past and the assumption of a short-lived shock, all support the stable outlook on Malta's credit rating. It also noted that debt affordability appears to be no major issue. The Maltese government can leverage the strength of a consistently improving economy to obtain a low rate of interest on public debt, thus making mitigation packages good value.

The Maltese economy will, in Creditreform’s opinion, continue to be amongst the best performing in Europe and, on this basis, it confirmed Malta’s credit rating as “A+”.

The main attraction of citizenship and residence by investment programmes is stability in uncertain times. In this context, Malta should be continue to be the obvious choice for Chinese high net worth individuals.

Mifsud Bonnici is an Accredited Agent in Malta, licensed to process Individual Investor Programme and the Malta Residence and Visa Programme applications. Together with our principals and correspondents in China and wider Asia, we are able to give reliable and personal service to qualifying applicants. Contact us now.

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