Malta To Halt Golden Passport Program Over Citizenship-For-Sale Concerns

Understanding the Golden Passport Scheme

Citizenship-by-investment (CBI) programs are legal ways for foreigners to get a country’s citizenship by making a large financial payment. Usually, applicants must invest in things like real estate, government bonds, businesses, or give money directly to the government.

Malta’s CBI program, called the Individual Investor Programme (IIP), was one of the most well-known in Europe. To apply, people had to give about €650,000 to Malta’s National Development and Social Fund. They also had to buy a property worth at least €350,000 or rent one for at least €16,000 a year. On top of that, they had to invest €150,000 in approved financial assets. The program included background checks, but many critics said these checks weren’t strong enough.

People who were approved through this program became citizens of Malta and also gained European Union citizenship. EU citizenship comes with many benefits, like visa-free travel to over 180 countries, access to healthcare and education across the EU, and the right to live, work, or study in any EU country. These advantages made Malta’s golden passport very attractive to rich individuals looking for more freedom to travel and manage their finances.

Legal Challenge and the EU’s Position

The European Commission started closely examining Malta’s golden passport program in 2020 because it was worried about protecting the value of EU citizenship. In 2022, after talks with Malta failed, the Commission took the case to the European Court of Justice (ECJ) by starting legal action. This move showed the Commission’s serious concerns about the program.

The EU’s main argument was that applicants had no real connection to Malta. The Commission said the program turned citizenship into a business deal, giving nationality mostly to those who could pay, not to those with real ties to the country. It also warned about security risks, saying the checks were too weak and might let people enter the EU without proper review, which could damage trust between EU countries.

In its decision, the ECJ agreed with these concerns and ruled that Malta’s citizenship-by-investment program violated EU law. The Court made it clear, saying, “A Member State cannot give its citizenship, and therefore Union citizenship, in exchange for fixed payments or investments, as this turns citizenship into a business deal.” The Court stressed that EU citizenship should come from a real connection with the country, like living there long-term, cultural involvement, or family ties, not just financial support.

Implications of the Ruling

The European Court of Justice’s decision to shut down Malta’s citizenship-by-investment program has major effects for many people and groups in Europe and around the world.

For Prospective Investors

This ruling closes one of the last ways to get EU citizenship by simply investing money. People who wanted to apply through Malta’s program will now need to look at other options, like staying in a country for a long time or becoming a citizen through normal legal steps. Losing this shortcut makes it harder for investors who want quick access to EU benefits.

For Existing Passport Holders

Although the court didn’t call for changes to past cases, people who already got Maltese citizenship through the program might now face more checks. Other EU countries could take a closer look at these passports, especially if the person has little real connection to Malta. This could mean more paperwork, extra questions at borders, or even legal reviews of their citizenship.

For Other Nations

The ruling sends a clear message to other countries, inside and outside the EU, that offer citizenship-for-sale programs. EU countries that still run these schemes will now face more legal and political pressure to follow the ECJ’s decision. Countries outside the EU that offer quick citizenship may also face more pushback and stricter rules from European authorities.

Broader EU Crackdown on Citizenship-for-Sale

The European Union has always spoken out against citizenship-by-investment programs, seeing them as a risk to the unity and safety of the EU. Over the last ten years, the EU has taken strong action against countries running these programs and has pushed them to follow EU values and laws.

Past Actions Against Member States

Cyprus and Bulgaria also had golden passport programs like Malta’s. But after growing criticism and legal pressure, both countries shut them down. In Cyprus, investigations found corruption and abuse, leading to an official inquiry and the suspension of the program in 2020. Bulgaria ended its program in 2022 after continued pressure from the EU.

Geopolitical and Ethical Concerns

The EU opposes citizenship-for-sale programs for both ethical and security reasons. These programs can pose safety risks by letting people with little or no background checks enter the Schengen Area freely. They also seem unfair because they let the rich skip normal immigration and integration steps. The EU believes that citizenship should be based on shared values, real commitment, and a true connection to the country, not just the ability to pay.

Proposed Legislative Actions and Future Directions

In response to ongoing concerns, the European Commission has asked for a full ban on citizenship-by-investment programs in all EU countries. It has proposed new rules that include better oversight, common standards for becoming a citizen, and closer teamwork between national authorities. The EU also wants stricter background checks for residency-by-investment programs, which are still legal but could be used as a hidden path to full citizenship.

Alternative Citizenship and Residency Options

After the European Court of Justice shut down Malta’s citizenship-by-investment program, investors and people looking for global mobility are now exploring other options. Even though this ruling cuts off a direct path to EU citizenship, there are still ways to get residency, work toward citizenship over time, or gain more travel freedom.

Golden Visa Programs in Europe

Some European countries offer golden visa programs that give residency, not citizenship, in return for large investments. Nations like Portugal, Greece, and Spain offer long-term residence permits to people who invest in real estate, businesses, or transfer capital. These programs don’t provide immediate citizenship, but they let you live in the country, bring your family, and travel freely within the Schengen Area. After living there for several years and meeting certain legal conditions, investors can apply for citizenship. However, the rules differ by country and usually require stronger ties to the country.

Traditional Naturalization Pathways

For those ready to commit to long-term residency, naturalization offers a solid and legally recognized path to citizenship. People can qualify by living in the country for a long time, marrying a citizen, or being sponsored by an employer. Though this process usually takes several years and requires language skills, cultural integration, and a clean legal record, it provides a valid and respected way to gain citizenship. This approach aligns with EU values by ensuring that citizenship is based on real personal connections to the country.

Caribbean Citizenship-by-Investment Alternatives

Outside Europe, some Caribbean countries like Dominica, Saint Kitts and Nevis, and Antigua and Barbuda still offer citizenship-by-investment programs. Applicants can get a passport in a few months by making a donation to the government or investing in real estate. Caribbean passports allow visa-free travel to many countries, including the UK and parts of Europe, but they don’t provide EU citizenship or residency rights. While these programs are fast and easy, their travel benefits are more limited compared to EU citizenship, and they don’t give access to the European single market.

Frequently Asked Questions

Is the ECJ ruling final and binding?

Yes. As the EU’s highest court, the ECJ’s decision is legally binding. Malta must comply with the ruling and cease granting citizenship through this program or face legal and financial consequences.

Can investors still gain EU citizenship through other countries?

Direct citizenship-by-investment routes within the EU have largely been closed. However, some countries offer golden visa programs (such as Portugal, Greece, and Spain), which provide residency leading to potential naturalization after several years.

What is the difference between a golden passport and a golden visa?

A golden passport grants immediate citizenship in return for investment. A golden visa, on the other hand, offers residency rights without immediate access to citizenship.

Where can I get more information about legal citizenship and residency options?

For accurate, up-to-date advice, consult immigration law professionals or official government portals of countries offering golden visa programs or naturalization pathways.

Conclusion

The European Court of Justice has made a strong ruling against Malta’s golden passport program, stating that citizenship cannot be treated as a product. The decision requires Malta to adjust its laws to align with EU principles, especially the need for a real connection between the applicant and the country. As a result, Malta will likely end the program to comply with the ruling.