EU Court Rules Against Malta’s Golden Passport Scheme – What It Means for Citizenship by Investment
The European Court of Justice has declared Malta’s citizenship-by-investment program illegal, citing concerns over money laundering risks, lack of genuine connection to the country, and the commercialization of EU citizenship.
The ruling not only mandates Malta to dismantle its program but also sets a precedent for similar schemes across Europe. Here’s what happened, why it matters, and what’s next for investors and countries offering such programs.
What was Malta's investment-based citizenship program?
Under Malta’s citizenship-by-investment scheme, which was introduced in 2013 and formally established in 2020, affluent foreigners may acquire Maltese and therefore EU citizenship by contributing a substantial sum of money.
The requirements included:
- A minimum donation of €600,000 to the government.
- Purchasing real estate worth at least €700,000 or renting property for a minimum annual fee of €16,000.
- A €10,000 donation to charity.
- A residency period in Malta of at least one year.
Through this program, successful applicants received a Maltese passport, which gave them the freedom to live, work, and travel in any of the 27 EU member states.
Why Did the EU Court Strike Down the Scheme?
The European Court of Justice ruled that Malta’s citizenship program breaches EU law, asserting that granting citizenship in return for fixed payments or investments “essentially turns the acquisition of nationality into a purely commercial transaction.”
The court emphasized:
A true connection to the nation, not simply financial investment, must be the foundation for citizenship. The integrity of EU citizenship and the mutual trust concept among member states are compromised by such schemes.
The practice exposes the EU to risks of money laundering, corruption, and security threats, as individuals with little or no genuine ties to Malta could obtain citizenship.
Criticism and Controversy
Malta’s golden passport scheme has faced criticism for years:
Anti-corruption advocates and EU officials warned it enabled white-collar crime and allowed sanctioned individuals to circumvent restrictions.
Investigations revealed that many recipients spend minimal time in Malta, undermining the requirement for a “genuine link”.
The European Commission initiated legal action against Malta and other countries with similar schemes, such as Cyprus and Bulgaria, which have since closed their programs.
Malta’s Response
The Maltese government has said that it would abide by the court’s finding and is studying its legal implications to align its regulatory structure with it. However, it also defended the program, pointing out that it had brought in €1.4 billion since 2015, funding in public housing, healthcare, and sports facilities.
Former Prime Minister Joseph Muscat, who introduced the scheme, criticized the ruling as politically motivated and suggested reform rather than abolition.
What’s Next for Malta and the Investors?
For Malta:
The country must terminate or significantly overhaul its citizenship-by-investment scheme or face possible financial penalties from the European Commission.
For Investors:
Existing Maltese passport holders are not affected, but new applications under the current framework will no longer be accepted. Investors seeking EU access will need to consider alternative residency-by-investment programs, which remain legal in several EU countries.
Stay Informed with UNO Capital
Malta’s golden passport scheme is now history, marking a turning point for citizenship-by-investment in Europe. At UNO Capital, we stay ahead of global changes and keep track of the latest updates in citizenship and residency programs.
Discover our trusted citizenship and residence programs in Antigua & Barbuda, Vanuatu, St. Lucia, Turkey, and other important countries. Speak with our experienced investment consultants to determine which program is best for your future. Reach out to us by email at info@unocapital.com or by phone at +971 4 393 0 393.
