In April 2025, the Court of Justice of the European Union delivered a key ruling concerning Malta’s controversial citizenship by investment programme, better known as the “golden passport” scheme.
The court ruled that granting EU citizenship in exchange for investment violated the principles and objectives of EU law, calling into question the legality of such programmes in general.
What Is a “Golden Passport”
The citizenship by investment programme, which had been in operation in Malta since 2014, allowed foreigners to obtain Maltese – and therefore European – citizenship in exchange for a major investment in the country’s economy.
This typically involved the purchase of real estate, donations to public funds and investments in securities, with total costs ranging from €600,000 to over €1 million.
Although the programme has generated significant revenue for the Maltese state budget, it has been criticised from the outset by EU institutions, human rights organisations, and EU-27 member states.
Core concerns relate to security issues, corruption, and the devaluation of EU passports.
Legal Position of the European Commission
The European Commission repeatedly expressed concern that Malta views citizenship as a commercial product rather than as a political and legal bond between the state and its citizen.
In 2020, the Commission initiated an infringement procedure against Malta.
However by 2022, the case was referred to the EU Court of Justice.
The European Commission argued that EU citizenship cannot be separated from the citizenship of any member state.
In reality, a Maltese passport automatically gives a foreigner the right to move, work, and vote freely within the entire EU.
Malta, in effect, is “selling” access to the fundamental rights enshrined in the Treaty on the Functioning of the EU and the Charter of Fundamental Rights.
The 2025 EU Court of Justice Ruling
In its April 2025 ruling, the EU Court of Justice sided with the Commission, finding that Malta’s programme undermined the principles of mutual trust between EU states.
The Court stated that Valetta violated the spirit of European integration.
The Court stressed that EU citizenship must be the result of a genuine link between a person and a member state unbound by a financial transaction.
The Court noted that even if countries have the right to determine the conditions for granting citizenship, this right is not absolute.
In the EU context, conditions must be respected within the general principles of the Union and cannot be used to undermine the collective interest.
The practice of granting citizenship in exchange for investment without real residence, integration or participation in the life of the country was found to be in breach of European law.
Maltese Reaction & Accession Implications
The Maltese government expressed disappointment with the Court’s ruling, saying that the programme was an important element of the country’s economic development and included strict due diligence measures.
However, the authorities promised to bring their policies in line with the ruling and consider alternative forms of attracting investment.
For other countries that have or have had similar schemes, such as Bulgaria and non-EU members countries in Europe (such as Cyprus and Montenegro); this decision sets a precedent for change candidate member states seek accession.
Now, the ruling sets a precedent for citizenship criteria whilst less permanent forms of citizenship, such as EU residency permits, may be reviewed.
Security Risks and Value of Citizenship
One of the main arguments against “golden passports” is security.
There are cases where passports were obtained by individuals linked to corruption, organised crime, and money laundering.
Indeed, such checks on such applicants were often formal.
Also, the Court of Justice’s ruling underlines that citizenship is not just a legal status, but an expression of identity, political affiliation, and social integration.
Losing these values in exchange for financial gain could further erode the meaning of membership in the Union.
The Future of Citizenship by Investment Programs
Following the 2025 ruling, it is clear that the era of “golden passports” within the EU is coming to an end.
The European Commission already announced an initiative to create a common code of standards for citizenship and residence, aimed at preventing abuses and strengthening the values of European citizenship.
Therefore, member states wishing to attract investment will look for more sustainable and transparent ways of investment.
Ideas include long-term residence programs, the development of a start-up environment, tax incentives or support for talent in the scientific and technical fields.
The decision marks a turning point, confirming that EU citizenship is a right to be earned, not bought.
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