EU top court rules Malta’s "golden passport" scheme violates European law

The European Union’s highest court has ruled that Malta’s controversial citizenship-by-investment program — commonly referred to as the "golden passport" scheme — breaches EU law, delivering a significant blow to the Mediterranean country’s long-defended initiative.

In a landmark decision issued on April 29, the Court of Justice of the European Union (CJEU) found that Malta’s scheme, which allows wealthy non-EU nationals to acquire citizenship in exchange for significant financial contributions, undermines the foundational principles of EU citizenship, Caliber.Az reports, citing Maltese media.

The court declared that granting nationality purely in return for payments or investments amounts to the commercialisation of EU citizenship, a practice incompatible with European treaties.

Malta’s investor citizenship scheme was introduced in 2014 and revised in 2020. It offered foreign nationals the opportunity to obtain a Maltese passport — and thereby EU citizenship — by making a contribution of between €600,000 and €750,000, purchasing or leasing property in Malta, and making a donation to a national development fund.

The scheme has been heavily criticised for enabling foreign individuals — including citizens of Russia, China, and several Middle Eastern countries — to gain access to the EU’s freedom of movement and residency rights, without necessarily having any meaningful connection to Malta. Since its inception, more than a thousand individuals have obtained citizenship through the program.

The CJEU ruled that the scheme violates the principle of sincere cooperation and endangers the mutual trust between EU member states regarding the granting of nationality.

While acknowledging that member states have the sovereign right to define the criteria for acquiring their nationality, the court made clear that such policies must remain within the boundaries of EU law. It concluded that Malta’s investor scheme transforms citizenship into a product for sale, stripping it of the essential bond of “solidarity and good faith” between a state and its citizens.

The court emphasised that EU citizenship cannot result from a purely commercial transaction, and that member states cannot simply grant nationality — and thus access to EU rights — in return for pre-set financial contributions.

“This practice,” the court stated, “does not allow for the establishment of a genuine connection between the individual and the granting member state, and it compromises the mutual trust between member states.”

Tuesday’s decision follows legal action launched by the European Commission, which had long argued that Malta’s investor citizenship program violated the legal framework underpinning EU citizenship. The Commission contended that the scheme granted passports to individuals without requiring them to establish any genuine or prior link with Malta, as would typically be expected for naturalisation.

The ruling is notable because it contradicts the opinion of the EU’s Advocate General, who in October 2023 stated that the Commission had failed to prove that EU citizenship requires a “genuine link” to a member state. That opinion, which appeared to favour Malta’s position, had raised expectations that the court might side with the Maltese government.

The CJEU’s decision may signal the definitive end of Malta’s golden passport scheme and place pressure on other EU countries that operate similar programs. It reinforces the EU’s stance that citizenship, and by extension the rights of EU citizenship, must not be commodified or exploited for financial gain.

Although the ruling specifically addressed Malta’s 2020 version of the program, it carries broader implications for any system that grants EU nationality without establishing a genuine relationship between the individual and the granting state.

Malta has not yet issued a formal response to the ruling.

By Tamilla Hasanova