On 29 April 2025, the European Court of Justice ruled that Malta may no longer sell citizenship through its ‘golden passports’ scheme. Konstantinos Papanikolaou explains the phenomenon of citizenship sales and why the ruling was surprising. But will it put an end to the practice?
Can citizenship really be bought? The architects of Malta’s ‘golden passports’ scheme clearly believe it can. From 2014, Malta's government offered citizenship to third-country nationals in exchange for an investment of more than €600,000. Over the course of more than a decade, the scheme has evolved into a billion-euro business for the EU's smallest member state – until a recent ruling by the European Court of Justice (ECJ) outlawed it.
Malta is not alone in this practice. A handful of other countries around the world – mainly microstates in the Caribbean such as St Kitts and Nevis, and Grenada – sell citizenship to mostly wealthy non-Westerners. Within the EU, Cyprus and Bulgaria have also offered Citizenship by Investment (CBI). The Cypriot programme ended in 2020, when Al Jazeera uncovered illegal practices by government officials granting citizenship. Cyprus has since stopped – and even revoked – over 200 people’s citizenships.
Since 2014, Malta has sold citizenship in exchange for an investment of over €600,000, generating well over a billion euros for the EU's smallest member state
When the scheme launched in 2014, many European countries were experiencing capital flight in the aftermath of the financial crisis. Anticipating the Maltese scheme, EU countries Greece, Spain and Ireland began to sell residence permits. These so-called 'golden visas' are usually cheaper than national citizenship, though do not confer the same rights. Greek golden visas, for example, start at €250,000 and typically involve real estate investments. However, the minimum investment amount in particularly popular areas is now higher, at €800,000.
How did this conflict arise at European level and end up in front of the ECJ? At its heart is the unique concept of Union citizenship, established in the Maastricht Treaty. Union citizenship comes with associated rights and obligations, such as the right to vote in European elections, and the right to freedom of movement and residence within the EU. Yet, according to the Treaty, Union citizenship is an addition to national citizenship; it does not replace it. Citizenship is considered the sacred core of what constitutes a state, and it is therefore up to that state to decide who it will naturalise.
The European Commission was sceptical from the outset about selling citizenship, yet it took almost ten years to act. In 2023, the Commission brought Malta before the ECJ, alleging it was violating the status of Union citizenship and the principle of sincere cooperation.
In 2023, the Commission brought Malta before the ECJ, alleging it was violating the status of Union citizenship and the principle of sincere cooperation
A key point of the Commission's indictment was its view that selling citizenship based on a predetermined sum of money did not establish a ‘genuine link’ between the third-country investor and Malta. This criterion, which originates from international law, dates back to 1955. After hearing from both parties, Advocate General Anthony Michael Collins recommended the Court dismiss the action. He reasoned that EU law could not define the vague concept of 'genuine links'. Collins' opinion, coupled with the understanding of national competence for national citizenship, led many to assume Malta would win its case, and would be permitted to continue selling citizenship.
Ultimately, however, things turned out differently. In April, in another highly significant verdict few EU law scholars expected, the court ruled in favour of the Commission. In ongoing debates, scholars have since raised questions about the ruling, relating mainly to the court's deficient reasoning. Some even interpreted it as an illiberal turn by the EU. Nevertheless, strong opinions will not overturn the court’s decision.
Strikingly, the term 'genuine links' does not appear at any point in the findings. Instead, the Court emphasises the distinction between national citizenship and Union citizenship. While it recognises the competence of member states to grant citizenship, the findings also make it clear that states must do so in accordance with EU law.
In April, the court ruled in favour of the Commission, but some EU law scholars believe its reasoning was deficient
The case is steeped in morality. Initially, the indictment, and the opinion of the Advocate General, were based on the moral concept of a ‘genuine link’. But the Grand Chamber now bases its decision on a special relationship of solidarity and good faith. In the Court's view, it is essential that a transactional citizenship programme does not damage this mutual trust. This is understandable given such a republican understanding of citizenship in a union of states, and Union citizenship via Maltese citizenship comes with obvious advantages for elite investors.
Yet a bitter aftertaste remains, given that the indictment and closing submission focus on the ‘genuine links’ criterion, a matter not addressed in the judgment. Instead, the ECJ is intervening in what was supposedly an area of national competence: national citizenship.
For now, it is difficult to say whether the decision will have a definitive impact. The Maltese programme will not continue in its current form. But that is all. Malta’s government accepted the Court of Justice's decision immediately afterwards. At the same time, however, the government announced that it would conduct a legal review to determine how it could bring the programme into line with the ruling. Given past events, another twist in the citizenships-for-sale saga would not be at all surprising.
