Malta's 'golden passports' scheme to face reversal following EU court decision
Fresh Take:
Malta's "Golden Passport" Scheme Gets the Ax from EU Court
The European Union's top court has dealt a crushing blow to Malta's Citizenship by Investment Program, commonly known as the "golden passport" scheme, declaring it incompatible with EU law.
The Verdict
On Tuesday, the EU Court of Justice, in a case regarding Malta's golden passport program, ruled that the country must halt the initiative due to its contravention of EU legislation. This program allowed wealthy foreigners to secure Maltese citizenship, and in turn, EU citizenship, in exchange for one million euros or more.
The European Commission, triggered by concerns about the program's legality, filed a complaint against Malta in 2022, but the latter maintained its innocence. The Court determined that Malta's program breached the principle of mutual trust among member states, stating that citizenship should not be granted based on investment payments.
Sanctioned Russians Slipped Through the Cracks
Intriguingly, even after Malta suspended its program for Russian and Belarusian citizens in light of Russia's invasion of Ukraine, reports suggest that several sanctioned Russians still managed to acquire Maltese passports through this very scheme.
Golden Visas on the Decline
The European Union is hardening its stance against citizenship-for-investment programs, as demonstrated by Spain's move to abolish the issuance of residence permits for real estate investments exceeding 500,000 euros, effective April 2025. Similarly, Portugal revisited its "golden visa" scheme in 2023, eliminating real estate investments to combat its housing crisis.
However, the program still allows foreigners to invest in other ventures like investment funds to secure residency permits.
Cleaning Up the Act
Cyprus, another EU member state, has been tackling the issue head-on, stripping citizenship from 222 wealthy investors and their family members as part of efforts to restore the country's tarnished reputation from its "Passport for Investment" program.
The ruling not only puts Malta's program under the microscope but also sets a trend; any EU country operating similar schemes may be subject to legal challenges. By establishing a genuine connection between applicants and member states, these programs can align with EU law, moving away from the commercialization of citizenship.
- Despite Malta suspending its "golden passport" program for Russian and Belarusian citizens, reports suggest that sanctioned Russians still acquired Maltese passports, contradicting the intended purpose.
- In contrast to Malta's contested program, the European Union is taking stricter measures against citizenship-for-investment programs, as demonstrated by Spain's plan to abolish real estate investment-based residence permits, effective in 2025.
- Malta's Citizenship by Investment Program, which offers EU citizenship in exchange for significant investments, has been declared incompatible with EU law by the European Union's Court of Justice, halting the initiative.
- Cyprus, another EU member state, has taken proactive steps to address issues with its "Passport for Investment" program by stripping citizenship from 222 wealthy investors and their family members, aiming to restore the country's reputation.
- As Malta's "golden passport" program comes under scrutiny following the EU court ruling, other EU countries operating similar schemes may face legal challenges, encouraging alignment with EU law and a shift away from the commercialization of citizenship.
