Image via: Alex Muscat Facebook
Negotiations between the Maltese government and Henley & Partners – the concessionaire for the Malta Individual Investor Programme, which is set to be replaced by a new program in September – are underway to determine how the two parties’ contractual commitments should be resolved in light of the expiration of the MIIP.
After winning a public tender in 2013 to design, implement, and market internationally the MIIP, Henley & Partners entered into a ten-year contract with Malta that would see its work as a concessionaire compensated through the receipt of four percent of the contribution amount – which begin at EUR 650,000 – of all applications. At the time of publishing of the most recent annual report from the program’s independent regulator, cumulative compensation for the concessionaire since 2014 amounted to EUR 36.8 million, a figure likely to have crossed the EUR 40 million-mark by now.
Now that the government plans to discontinue the MIIP prior to the expiration of the concessionaire’s advisory contract, questions remain as what role, if any, Henley & Partners will have under the new scheme, as well as whether the government will need to compensate the firm for any future losses it might incur should their current role change prior to 2023.
Government liable for any losses
In the event of early termination, the government of Malta may well become liable for losses Henley & Partners might incur in connection with a repeal of the MIIP. Included in the contractual terms are phrases such as:
“The government shall be liable for and shall pay to the concessionaire the aggregate of all losses that have been or will be reasonably and properly incurred… in connection with the programme and the provision of services”.
In the contract, the operational definition of “losses” takes several forms, including costs the concessionaire would have in relation to extricating itself from agreements with subcontractors, expenditures the concessionaire has incurred in anticipation of the future provision of services (such as marketing events aimed at promoting the MIIP), as well as costs incurred in connection with “demobilization” (i.e., the relocation of office infrastructure and so on).
Due to the ongoing nature of the negotiations, neither party to the contract wished to comment on the matter at present. “Talks are progressing,” said Henley & Partners’ spokesperson Paddy Blewer when contacted by IMI. Speaking to the Times of Malta, Citizenship Parliamentary Secretary Alex Muscat, in the same vein, indicated he would not comment because negotiations were at “a sensitive stage”.
Christian Henrik Nesheim is the founder and editor of Investment Migration Insider, the #1 magazine – online or offline – for residency and citizenship by investment. He is an internationally recognized expert, speaker, documentary producer, and writer on the subject of investment migration, whose work is cited in the Economist, Bloomberg, Fortune, Forbes, Newsweek, and Business Insider. Norwegian by birth, Christian has spent the last 14 years in the United States, China, and Spain.