In its judgement of 29 April 2025, the European Court of Justice declared that
by establishing and operating an institutionalised citizenship investment scheme, such as the Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment scheme, [...], which establishes a transactional naturalisation procedure in exchange for predetermined payments or investments and thus amounts to the commercialisation of the grant of the nationality of a Member State and, by extension, that of Union citizenship, the Republic of Malta has failed to fulfil its obligations under Article 20 TFEU and Article 4(3) TEU.
The European Commission has brought Malta to court over what is called the ‘golden passport’ scheme. This scheme usually effectively means anyone can get EU citizenship provided they can afford to pay the price, but requires little physical residency in the country prior to gaining citizenship.
According to the Maltese rules, foreigners are required to purchase property, invest in government-approved financial instruments and make a donation of €10,000 to a registered philanthropic, cultural, scientific, animal welfare or similar NGO or society to gain for citizenship.
The EU has viewed such schemes with increasing scepticism, and the European Parliament has called for their discontinuance, arguing hat the outright sale of EU citizenship undermines the mutual trust upon which the European Union is built. The EU citizenship also grants individuals the right to vote and stand as a candidate in local and EU elections, and to travel visa-free within the bloc and to other countries. Selling such freedoms to a privileged base of a few wealthy individuals bears a host of corruption, money laundering and security risks, as well as risks of tax avoidance. It also has possible negative side-effects, such as distortion of local housing markets, the Parliament said.
Malta must now comply with the judgment without delay and stop the practice, or risk further legal action and potential financial penalties.