Malta’s controversial golden passport scheme, allowing foreigners to purchase EU citizenship in exchange for investing upwards of €690,000, was ruled unlawful by the EU’s top court on Tuesday.
The Commission took legal action years ago, arguing that the golden passport scheme breached Malta’s duty to cooperate sincerely. It offered people the chance to gain citizenship of Malta, and hence the right to work across the EU, even if they didn’t have family ties or a home there.
The EU Court of Justice agreed with the Commission, finding that such a scheme “amounts to the commercialisation of the granting of the status of national of a member state and, by extension, Union citizenship, which is incompatible with the conception of that fundamental status that stems from the EU Treaties”.
Payments or investments underpinned the Maltese scheme, the court held, adding that “it cannot be considered that actual residence on that territory was regarded by the Republic of Malta as constituting an essential criterion for the grant of the nationality of that member state under that scheme”.
The court declared that by establishing and operating its golden passport scheme Malta failed to fulfil its obligations under the EU treaties and ordered Malta to pay the costs of the case.
The decision went against the grain of a non-binding report by Advocate General Anthony Collins last October which brushed aside European Commission concerns that the scheme undermined the EU’s integrity.
“Member States have decided that it is for each of them alone to determine who is entitled to be one of their nationals and, as a consequence, who is an EU citizen,” Collins’ opinion had suggested.
Judges at the Court of Justice aren’t obliged to follow Advocate General opinions, though in the majority of cases they do.
Malta’s was the last remaining golden passport scheme within the bloc, after Cyprus scrapped its procedure in 2020, and Bulgaria in 2022. Other countries offer “golden visas”, a narrower system that offers residence permits to those willing to pay, although those are also under the spotlight.
Portugal slimmed down its golden visa scheme in 2023, removing a real estate investment condition in a bid to cut property speculation. The Netherlands followed suit, ending its golden visa scheme in January 2024, and Spain has also promised to abolish golden visas for those who invest in real estate.
The schemes have raised significant security and money-laundering concerns – not least since the invasion of Ukraine in 2022, as acquiring an EU passport or residence card may let wealthy Russians evade sanctions.
In 2022, MEPs called for tighter rules on golden visas and a ban on citizenship by investment, saying it was “objectionable from an ethical, legal and economic point of view”.
“The Government of Malta respects the decisions of the courts, while at this moment the legal implications of this judgment are being studied in detail, so that the regulatory framework on citizenship can then be brought in line with the principles outlined in the judgment,” the Maltese government said in a statement of reaction to the judgment.
The statement said it was important to clarify “that decisions taken under both the current and the previous legislative framework remain valid”, and that “the Government of Malta takes pride in the wealth generated through this framework over recent years, which enabled the establishment of a national fund for investment and savings to address the needs of both present and future generations.”
“The position of the Commission on investor citizen schemes has been very clear from the outset: European citizenship is not for sale,” said Commission spokesperson Markus Lammert, welcoming the judgment.
Lammert said it would now be for Malta to implement the judgment.
Asked whether the court decision would require Malta to unwind any decisions it had made under the scheme, Lammert said that the Commission was analysing the judgment on next steps.
This article has been updated to reflect reactions from Malta and the European Commission.
