Malta’s controversial scheme to sell its citizenship and EU passports to shady millionaires from non-EU member states has suffered a blow as interest from potential applicants has dwindled.

According to the latest report published by the government-appointed regulator, Malta received only 175 applications in 2021 and 2022, the lowest number ever registered since the scheme’s introduction.

In its early years, the scheme attracted some 400 applicants a year, with an additional average of three dependents per application.

The regulator, 81-year-old Carmel Degabriele, admitted that this scenario does not augur well for the scheme and pointed to the EU’s legal action against Malta to shut down the programme as the main reason.

“The start of infringement procedures by the European Commission against Malta in the last quarter of 2021 forced a number of prospective applicants to reconsider their position and even shun our newly refined procedures, at least until the impasse is solved and the new scheme gets the green light of the EU,” the regulator said.

The latest available data shows that applications dipped significantly in 2022, with only 70 approvals issued during the same year.

Details from the report also show a reduction in the much-vaunted economic benefits of the scheme.

While Asian citizens, mostly Chinese, have remained the most interested millionaires in buying Maltese passports, investment has significantly reduced.

Only two applicants chose to buy a house on the island in 2022 out of those who, according to law, are bound to invest in Maltese property as part of the deal to acquire Maltese citizenship.

All the others among the approved applicants chose to lease a property and spend exactly the minimum required by the law, €16,000 a year, in rent payments. This continues to show that the applicants do not intend to settle in Malta but use the island as a passport to the EU.

Lawyers and accountants were by far the biggest beneficiaries of the scheme. Among the agents used in 2022, 56 were lawyers and 27 were accountants. Through these applications, agents earn tens of thousands in commissions and fees. No details were given on the agents in the report.

Both the European Commission and the European Parliament have asked Malta to shut down the scheme as it is infringing EU law and giving the island and the EU a bad reputation. Yet Prime Minister Robert Abela vowed to protect it, and Malta is now facing a case at the European Court.

Other countries with similar schemes, such as Cyprus and Portugal, have shut down their passport schemes.

Introduced in 2014, the cash-for-passport scheme was the first ‘innovation’ introduced by disgraced former prime minister Joseph Muscat despite it never having been presented in the Labour Party’s electoral manifesto.

Labour made great efforts to promote the scheme around the globe, with Muscat flying thousands of miles to promote the selling of Maltese and EU passports at the behest of Henley & Partners.

Keith Schembri, Muscat’s chief of staff, was accused of getting commissions from millionaire applicants and agents. He denies the claims.