The Court of Justice of the European Union (CJEU) has ruled that Malta must terminate its “golden passport” program, finding it violated fundamental EU principles by commercializing EU citizenship. This decision is based on Malta’s naturalization program, which allowed foreign investors to acquire Maltese citizenship by making substantial financial contributions to the country, effectively granting them EU citizenship rights. As outlined in the CJEU’s declaration, this practice conflicts with Malta’s responsibilities under Article 20 of the Treaty on the Functioning of the European Union (TFEU) and the principle of sincere cooperation stated in Article 4(3) of the Treaty of the European Union (TEU).
Malta’s scheme, formally labeled “for Exceptional Services by Direct Investment,” has been operational since 2020, charging investors a minimum of €600,000 for a naturalization certificate if certain residency requirements are met. The program was authorized by Article 10(9) of the Maltese Citizenship Act, granting the responsible Minister discretion to naturalize individuals offering exceptional services or investment interest, notwithstanding other legislative provisions.
This verdict arises after the European Commission referred the issue to the CJEU, asserting that trading citizenship for predetermined investments without a substantial connection to the member state undermines EU treaties. Prior to this decision, only three EU nations—Bulgaria, Cyprus, and Malta—operated similar schemes, yet the commission had flagged 12 countries offering residence-for-investment opportunities, leaving open questions about compliance with EU statutes.
The implications of the CJEU’s judgment will likely influence residency and citizenship by investment schemes across the EU. Legal professionals and policy-makers will need to monitor whether these national programs align with the EU’s legal framework and anticipate potential regulatory changes. For more details, visit the full article.