The Court of Justice of the European Union ruled on 29 April that Malta’s Citizenship by Naturalisation for Exceptional Services by Direct Investment program — commonly known as the “golden passport” scheme — violates EU rules on citizenship. The court stated that acquiring citizenship of an EU member state must not result from a commercial transaction.
The court judgment formally declared that Malta failed to fulfill its obligations under Article 20 of the Treaty on the Functioning of the European Union and Article 4(3) of the Treaty on European Union by creating and operating an institutionalized citizenship-by-investment program. The court ordered Malta to terminate the scheme and cover all court costs related to the proceedings.
“A program of that sort amounts to the commercialization 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 Treaties,” the court stated in its judgment.
A Financial Times investigation found that at least seven Russian nationals, sanctioned by the EU, US, or Ukraine, had recently obtained Maltese citizenship through the “golden” visa program:
FT: Russians linked to Ukraine war bought Maltese “golden” passports
The Maltese program allowed foreign investors to obtain citizenship without requiring genuine connections to the country in exchange for investments of approximately 1 million euros. Under the scheme, applicants needed to make a contribution of either 600,000 or 750,000 euros to the Maltese Government, purchase or lease residential property, and make a donation of at least 10,000 euros to approved organizations.
While the program required “legal residence” in Malta for a period of 36 months, the court noted this period could be reduced to just 12 months for an additional payment of 150,000 euros. According to evidence presented to the court, physical presence in Malta was only required twice during the process – when providing biometric data and when taking an oath of allegiance.
The European Commission, which brought the case against Malta, argued that such investor citizenship schemes undermine the integrity of EU citizenship and break the mutual trust that underpins this status.
The court agreed, stating that Malta “manifestly disregards the requirement for a special relationship of solidarity and good faith, characterized by the reciprocity of rights and duties between the Member State and its nationals” when it implements a naturalization scheme based on a transactional procedure.
The court rejected Malta’s defense that citizenship matters fall within the exclusive competence of member states. While acknowledging that member states have broad discretion in setting nationality criteria, the court emphasized these powers must be exercised with due regard to EU law.
