In a blow to the investment migration industry, so-called “golden passport” programs that benefitted wealthy foreigners are now banned in the European Union, the bloc’s highest court ruled in a landmark decision on Tuesday. The ruling by the European Union Court of Justice (CJEU) comes after a years-long legal challenge brought by the European Commission against Malta, a small island nation situated between Sicily and North Africa that offered one of the world’s most popular golden passport programs. These citizenship-by-investment schemes, popular among wealthy nationals from countries like Russia and China, offer a backdoor path to citizenship in the E.U. without the fuss of a standard immigration process.
In its ruling, the CJEU found Malta cannot offer the golden passport program because it “amounts to the commercialisation of the granting of the status of national of a Member State and, by extension, Union citizenship,” and so is not compatible with the nature of E.U. citizenship. Once buyers have Maltese citizenship, they technically have E.U. citizenship, and can work, travel, and live freely among the 27 member states.
Malta launched the scheme as a way to attract capital from rich foreigners: for the price of at least €600,000, wealthy people can buy an expedited process to receive a Maltese passport. Since its inception in 2015, it has generated over €1.4 billion in revenue for the country, its government says. Other countries around the world have adopted citizenship-by-investment schemes, though Malta is the last one in Europe to offer it.
Bulgaria and Cyprus once offered their own version of golden passport programs, but walked them back. Many other countries in Europe offer residency by investment programs, which are not affected by Tuesday’s ruling.
As the citizenship by investment programs grew in popularity, reports found they give bad actors easier access into countries where they can engage in illegal activities, like money laundering. In just the past few weeks, Malta’s program has drawn attention in Europe for allowing sanctioned individuals to circumvent travel bans.
“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 court ruled. “Such a practice does not make it possible to establish the necessary bond of solidarity and good faith between a Member State and its citizens.”
Now, Malta must amend its law and repeal the provision allowing the sale of citizenship, says Eka Rostomashvili, campaign lead on corrupt money flows at Transparency International, an anti-corruption organization that does not support the investment schemes.
Malta’s government said it would comply with the order, and that those who previously attained citizenship through the program would not be affected.
“As always, the government of Malta respects the decisions of the courts,” the government said in a statement, according to The Times of Malta. “At this moment the legal implications of this judgment are being studied in detail, so that the regulatory framework on citizenship can then be brought in line with the principles outlined in the judgment.”
Henley & Partners, a global residence and citizenship by investment advisory firm, calls the court’s decision politically motivated, and says portraying citizenship by investment as commercialization is “fundamentally flawed.” The firm noted E.U. countries granted 1.1 million people citizenship in 2023, some of whom received the status through “a remote ancestry connection” while others come from “high risk” countries like Syria.
“The few hundred citizenships granted annually by Malta, under the most stringent security and background checks, hardly justify the non-factual, alarmist narrative promoted by the Commission and echoed in the [court]’s ruling,” the firm said in a statement.
The news comes as President Donald Trump advocates for a so-called gold card in the U.S. For the price of $5 million the president has proposed allowing wealthy foreigners to gain U.S. residency and a path to citizenship.
Golden visa programs still allowed
While citizenship is no longer for sale, the ruling does not ban golden visa programs, or residency by investment, says Rostomashvili. These programs, which were adopted by many more countries than the citizenship schemes, still exist across the E.U., and are popular with people from all over the world, including the U.S.
Most of the programs were devised to bring capital to the struggling countries during Europe’s recent debt crisis, and many allowed foreigners to buy a home in the country in exchange for permanent residency. That made it easier for buyers to move throughout the bloc, and travel more freely and for longer durations. In the aftermath of the Covid-19 pandemic, these programs became especially popular, particularly among rich Americans and retirees.
But the tide has begun turning against even these residency programs. Now, several countries, including Ireland, Portugal, and Spain, have started paring back their golden visa programs on their own amid concerns about sky-rocketing housing prices that have resulted from the flood of investor money.
