One more dream destination has closed its doors to global immigrants.
Malta's "golden passport" scheme, which granted affluent foreigners the right to live, work, and travel across the European Union in exchange for substantial investments and charitable donations, was declared illegal and incompatible with the EU's principles by the European Court of Justice on April 29, 2025. The scheme transformed citizenship into a commodity for affluent foreigners.
The court's ruling on Malta's citizenship-by-investment scheme has halted one of Europe's most controversial initiatives, stating that EU citizenship is not for sale. The judges argued that Malta's scheme eroded trust, solidarity, and the bond between a nation and its citizens. The decision marks the end of an era for Malta and signals a global reckoning for golden passport schemes. The ruling raises questions about the true value and future of European citizenship.
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EU’s Top Court Orders Malta to End Controversial Golden Passport Scheme
The European Court of Justice has ordered Malta's "golden passport" scheme to shut down. This scheme allowed wealthy foreigners to acquire Maltese and European Union citizenship in exchange for substantial investments. This ruling marks the end of one of the last citizenship-by-investment programs in the European Union and sets a significant precedent for EU citizenship.
What Was Malta’s Golden Passport Scheme?
Malta's golden passport program, launched in 2015, allows foreign nationals to obtain Maltese citizenship by paying €600,000, purchasing or leasing property, and donating €10,000 to charity. Applicants with a higher investment of around €1 million can expedite the process, granting them the right to reside, work, and travel freely across EU member states.
The scheme aimed to attract foreign investment and generate revenue for Malta, supporting sectors like social housing, healthcare, sports, and culture, but it sparked controversy.
EU’s Legal Challenge and Ruling
The European Commission filed legal action against Malta in 2022, claiming the scheme violated its obligations under EU treaties by allowing individuals to acquire EU citizenship without establishing a genuine link to Malta.
The ECJ ruled in favor of the Commission, stating that Malta's approach to EU citizenship is commercialization. This highlights that EU citizenship is a fundamental status that cannot be reduced to a mere commercial transaction.
In its judgment, the ECJ stated, “A member state cannot grant its nationality – and indeed European citizenship – in exchange for predetermined payments or investments, as this essentially amounts to rendering the acquisition of nationality a mere commercial transaction.”
The European Court of Justice (ECJ) ruled that Malta's scheme, which grants or withdraws nationality, violated the principles of mutual trust, solidarity, and good faith, ordering Malta to pay all legal costs and terminate the program.
Broader Context: The Decline of Golden Passport Schemes in Europe
Malta's scheme, one of the last in the EU, was suspended in 2022 due to pressure from Brussels, high-profile applicant scandals, and concerns about money laundering, corruption, and security risks.
The European Court of Justice (ECJ) has ruled that investment-based citizenship programs cannot operate within the EU legal framework unless they establish a meaningful connection between applicants and the naturalizing state, as most EU countries have abandoned these programs in the past decade.
Other Cases
Cyprus launched a residency program in 2013, requiring a minimum investment of €2 million in real estate or €2.5 million in other assets. The program generated over €7 billion before its suspension in 2020. However, scandals revealed misuse, including granting citizenship to criminals. A 2020 Al Jazeera exposé led to the program's termination. Cyprus now focuses on residency-by-investment schemes with lower investments and long-term residence.
Bulgaria's CBI program, which required investments in government bonds or €1 million for expedited citizenship, faced criticism for insufficient due diligence and a lack of transparency. The program closed in 2022 due to EU pressure and internal debates. Bulgaria now focuses on attracting foreign investment through business-friendly policies rather than direct citizenship sales.
Implications of the Ruling on Malta
The European Commission's legal action and court ruling have prompted Malta to end its golden passport scheme. This scheme violated EU law by granting citizenship without a genuine connection to Malta. This reduced national revenue and challenged Malta's sovereignty over citizenship decisions, necessitating alignment with EU principles of trust and cooperation. Failure to comply could result in further legal and financial penalties.
The closure of Malta's golden passport scheme is expected to decrease demand in the country's real estate market, especially in the high-end segment. The scheme, which required applicants to buy or rent property at significant values, fueled property sales and price growth. The closure may lead to a slowdown in luxury property transactions and moderate price increases. Developers and agents targeting foreign buyers may face reduced business activity.
The golden passport scheme in Malta could decrease government revenue and slow growth in luxury real estate and financial services. However, the country's economic success does not depend solely on the scheme. It could benefit from attracting talent, investing in innovation, science, and technology, aligning with long-term development goals, and improving its international reputation.
Malta’s Response and the Future of Investment Migration
The Maltese government has reacted to the European Court of Justice's ruling, stating it will review its citizenship regulations to comply with the ruling, despite former Prime Minister Joseph Muscat's previous suggestion of a "political" program.
Dr Ian Borg, Malta’s deputy Prime Minister, stated - “Rulings of the Court of Justice of the European Union are binding on Member States, and Malta will, as always, respect the outcome.”
The ruling restricts member states' nationality discretion in determining EU citizenship value, stating that EU citizenship grants privileges like free movement, access to the internal market, and voting rights, which require more than just financial means.
Malta is exploring residency-by-investment programs, long-term physical presence, and integration to attract foreign investment and maintain EU standards and is also exploring innovative and technology sectors for economic growth.
Path Forward
Malta can adopt several strategies to attract foreign investment while aligning with EU principles and maintaining its economic growth:
Residency-by-Investment Programs: Focus on residency schemes that emphasize long-term physical presence and integration. These programs can attract skilled professionals and entrepreneurs without granting automatic citizenship.
Innovation and Technology: Invest in fintech, blockchain, and renewable energy sectors. Malta's existing reputation as a digital hub can be leveraged to attract tech companies and startups.
Sustainable Finance: Develop green bonds and sustainable investment instruments to appeal to environmentally conscious investors.
Infrastructure Development: Improve transport, logistics, and telecommunications infrastructure to support business operations and enhance investor confidence.
Education and Talent Development: Establish partnerships with universities and training centers to build a skilled workforce and address labor market challenges.
Diversified Investment Incentives: Offer tax benefits and streamlined processes for healthcare, affordable housing, and tourism sectors.
Global Partnerships: Strengthen ties with non-EU countries through trade agreements and collaborative projects, expanding market access.
Digital Nomad Visas: Introduce programs targeting remote workers and freelancers, fostering a vibrant international community.
Research and Development: Encourage R&D initiatives by providing grants and incentives for innovation-driven projects.
Transparency and Reputation Building: Focus on ethical practices and compliance to rebuild trust and enhance Malta's global image.
These strategies can help Malta transition from reliance on citizenship-by-investment schemes to sustainable and diversified economic growth.
Implications for Europe and Beyond
The EU's decision to close the golden passports chapter could shift towards alternative foreign investment pathways like residency-by-investment programs or digital nomad visas. Highlighting that citizenship and associated rights cannot be bought could deter similar schemes and influence global debates on citizenship-by-investment.
The EU court's decision against Malta's golden passport scheme could significantly alter its international relations, especially within the EU. The ruling reveals a conflict between national sovereignty and EU-wide standards, causing increased scrutiny from EU partners and a need to rebuild trust. Associations with citizenship and security concerns could also impact Malta's reputation. Compliance with the ruling is crucial for maintaining positive EU and global influence.
The ruling against Malta's golden passport scheme could influence future EU policies by imposing stricter standards on citizenship grants and closing loopholes for commercialization. The decision emphasizes the importance of genuine connections between applicants and the granting country, stating that financial investment alone is insufficient. This could prompt the EU to adopt more harmonized citizenship rules and tighten oversight of national programs, ensuring EU citizenship is rooted in solidarity, good faith, and mutual trust among member states.
Ethical Arguments against Golden Passport Schemes
Golden passport schemes are controversial due to their ethical implications. They reduce citizenship to a mere financial transaction, granting wealthy individuals rights like freedom of movement and voting while denying millions of less affluent individuals similar opportunities.
Critics argue that selling citizenship undermines citizenship integrity, erodes trust, and may turn political membership into an exclusive club for the wealthy. They also fear corruption, money laundering, and tax evasion, which could compromise the ethical foundations of national and EU citizenship. Selling citizenship degrades community values and responsibilities, prioritizing economic gain over shared values and social cohesion.
Conclusion
The European Court of Justice has ruled that Malta's golden passport era, which once benefited the economy, is no longer valid. The ruling reaffirms the EU's stance that citizenship and rights cannot be reduced to mere financial transactions. It emphasized that nationality must be rooted in genuine bonds of solidarity and mutual trust, setting a new standard for member states to ensure shared values over market price.
Malta has agreed to respect the court's decision and review its citizenship policies, but the implications are felt across Europe, warning nations against commercializing their national identity. Transparency advocates and EU officials see the decision as a victory for integrity, security, and the rule of law.
With the closure of its golden passport scheme, Malta embarks on a pivotal journey to redefine its investment and development strategies. As it seeks to harmonize national interests with its role within the European community, we wish Malta and other nations success in fostering growth and hope for the world’s immigrants to find boundless opportunities.
