Malta’s Citizenship by Investment (CBI) programme offers numerous benefits, but it also comes with hidden costs of CBI. While the programme is transparent about its primary fees, additional expenses can arise. In this blog, we uncover the hidden costs of CBI to help you make an informed decision.
What Are the Hidden Costs of CBI?
Beyond the main investment requirements, applicants often encounter unexpected expenses. These hidden costs of CBI can significantly impact your budget. Let’s explore these costs in detail.
Application and Due Diligence Fees
- Hidden Costs of CBI: Non-Refundable Deposit
Applicants must pay a €10,000 non-refundable deposit during the residency stage. Additionally, residence permit fees apply. These fees are €5,000 for the main applicant and €1,000 per dependent. Consequently, applicants should prepare for these costs in advance.
- Hidden Costs of CBI: Due Diligence Fees
Due diligence fees are mandatory and vary based on age. For instance, the main applicant pays €15,000. Meanwhile, dependents over 12 pay €10,000 each. These fees ensure thorough background checks are conducted. As a result, they help maintain the integrity of the program.
Property-Related Expenses
- Hidden Costs of CBI: Real Estate Agent Fees
Engaging a real estate agent incurs additional fees, typically ranging from 1% to 5% of the property value. These fees are often overlooked but can be substantial. Consequently, it’s important to factor them into your budget when considering real estate investments.
Legal and Professional Fees
- Legal Representation
Hiring a licensed immigration attorney is essential but costly. Legal fees vary depending on the complexity of the application. Additionally, the attorney’s expertise also influences the cost. As a result, it’s important to budget for these fees when planning your application.
- Translation and Notarization
Documents not in English or Maltese require translation and notarization. These services add to the hidden costs of CBI. Moreover, this is particularly important for non-English-speaking applicants. As a result, applicants should anticipate these additional expenses when preparing their documents.
Travel and Relocation Expenses
- Biometric Data Collection
Applicants must travel to Malta to provide biometric data. Flights, accommodation, and transportation contribute to the overall cost. Furthermore, these expenses can add up quickly. As a result, applicants should consider these travel-related costs when planning their budget.
- Relocation Costs
Relocating to Malta involves shipping belongings, finding temporary housing, and paying school fees for children. These expenses can quickly add up. Moreover, additional costs like utilities and settling-in fees may arise. As a result, it’s important to plan and budget for all relocation-related expenses.
Hidden Costs of CBI: Ongoing Financial Commitments
- Property Retention
The purchased or rented property must be retained for at least five years. During this period, maintenance and utility costs continue to accrue. Moreover, these ongoing expenses can impact your budget. As a result, it’s important to account for these costs over the long term.
- Annual Taxes
While Malta has no wealth or inheritance taxes, property taxes and local council fees apply. These recurring expenses contribute to the hidden costs of CBI. Furthermore, they can add up over time. As a result, applicants should be aware of these ongoing financial obligations.
Charitable Donation
- Mandatory Donation
A one-time donation of €10,000 to a Maltese non-profit organization is required. While this is a known cost, it is often underestimated in initial budgeting. Additionally, this expense can catch applicants off guard. As a result, it’s important to factor it into your overall financial planning.
Hidden Costs of CBI: Is Malta’s CBI Programme Still Worth It?
Despite the hidden costs of CBI, the program offers significant benefits. Visa-free travel to 188 countries is one of these advantages. Moreover, EU membership and tax benefits add value to the investment. However, thorough financial planning is essential. As a result, applicants should carefully assess both costs and benefits before proceeding.
How to Minimize Hidden Costs
- Research and Planning
Conduct thorough research and consult with licensed agents to understand all potential costs. Additionally, seek expert advice to gain clarity on the process. Proper planning helps avoid unexpected expenses. As a result, you can make informed decisions and manage your budget effectively.
- Budgeting
Create a detailed budget that includes all known and potential hidden costs. This helps you understand the full financial commitment. Additionally, account for both direct and indirect expenses. As a result, you will be financially prepared for the entire process and avoid any surprises.
- Negotiating Fees
Some fees, such as legal and real estate agent fees, may be negotiable. Discuss these costs upfront to secure the best rates. Additionally, negotiating can help reduce overall expenses. As a result, you can save money and avoid unnecessary costs during the process.
Conclusion: Hidden Costs of CBI
Malta’s Citizenship by Investment programme is a lucrative opportunity, but it comes with hidden costs of CBI. From application fees to property-related expenses, these costs can add up quickly. By understanding and planning for these expenses, you can make an informed decision and maximize the benefits of the programme.
FAQ
What are the hidden costs of CBI?
Hidden costs include due diligence fees, property-related expenses, legal fees, travel costs, and ongoing financial commitments like property maintenance.
Are due diligence fees refundable?
No, due diligence fees are non-refundable, even if the application is denied.
Can I avoid property-related expenses?
No, purchasing or renting a property is a mandatory requirement. However, you can budget for maintenance and utility costs in advance.
How can I reduce legal fees?
Compare fees from multiple licensed attorneys and negotiate rates. Ensure transparency about all potential costs upfront.
Is the charitable donation mandatory?
Yes, a one-time donation of €10,000 to a Maltese non-profit organization is a compulsory part of the programme.
By addressing these questions, we aim to provide clarity on the hidden costs of CBI. Proper planning and budgeting can help you navigate these expenses and make the most of Malta’s Citizenship by Investment programme.
