In an unexpected move, the European Court of Justice has ruled in favour of the European Commission in its court case against Malta concerning the Mediterranean island nation’s sale of citizenship.
The implications may be much broader than Malta’s case, including golden visa programs and free access from non-EU countries that sell citizenship.
Malta opened its Exceptional Investor Naturalization Policy (MEIN) in 2020. This was a reformed version of the older Individual Investor Program, the first citizenship-by-investment (CBI) scheme in the European Union, launched in 2013. Cyprus and Bulgaria subsequently offered CBI programs as well, but cancelled them under EU pressure.
The European Commission’s objection to the Maltese program argued that, unlike conventional naturalization procedures, Malta’s program did not require applicants to spend significant time in the country or develop genuine links to the country and the EU. Even under the reformed MEIN, applicants only had to spend between 12 and 36 months as a resident before getting a passport. This made the grant of EU citizenship purely “transactional.”
Malta countered that it had the sovereign right under the EU constitution to determine its own citizenship policies. The EU’s own Ombudsman agreed, pointing out that the requirement for a so-called “genuine connection” didn’t appear in the EU constitution or in legislation governing EU citizenship. This led many commentators to conclude that Malta would probably win the case.
In the event, the European Court of Justice ruled that Malta’s response to EU concerns was not “compatible with the principle of sincere cooperation” as required under the EU constitution. In other words, Malta may technically have the right to determine its own citizenship policies, but if it does so without regard for the concerns of the rest of the EU, it risks being booted out of the community.
The outcome of this case is significant because it clarifies the relationship between the EU and national sovereignty when it comes to citizenship. This has been an increasingly contested issue. On one hand, several European countries have pushed the boundaries of residency and citizenship by selling both to non-EU residents. On the other hand, some EU countries have cracked down on easy pathways to residency and citizenship as part of a broader national conservative reaction to globalization.
The European Commission—the executive authority of the European Union—has been increasingly concerned about not just citizenship, but residency policies in the bloc. Late last year, it recommended that the European Parliament remove visa-free access for any country that sells citizenship. The EU and the United Kingdom have suspended visa fees for travel from several countries that do this.
In addition, the Commission has also expressed concern about golden visa programs inside the EU. Whereas traditional forms of residency, like retirement and digital nomad visas, require extended presence in the country, tax payment, and other genuine links, successful golden visa applicants can spend as little as seven days a year in the EU without compromising their residency rights.
For example, it’s technically possible for a person to hold a Portugal golden visa, spend minimal time in the country, and qualify for a Portuguese passport (and therefore EU passport) after five years. This is why the Portuguese coalition government has recently proposed to extend the timeline to naturalization and require more time in country to keep a golden visa.
Like Portugal, the Malta case is further confirmation of a tightening of European openness to extended residency and citizenship rights. Anyone interested in taking advantage of existing rules to gain European residency by investment should do so as soon as possible.
The World’s Best Retirement Havens for 2025
The World’s Best Retirement Havens for 2025
20 Countries Compared, Contrasted, Ranked, and Rated. You don’t have to be rich to enjoy a pampered retirement, you just need to know where to go. With our 34th Annual Global Retirement Index, our experts hand you a detailed roadmap. Details—and a Special Offer—Here
By submitting your email address, you will receive a free subscription to IL Postcards and special offers from International Living and our affiliates. You can unsubscribe at any time, and we encourage you to read more about our Privacy Policy.
Consult with Me, One-on-One
My Mission: To Make Your Life Simpler, Safer, and Freer … Not More Complicated
Stop overcomplicating, second-guessing, or giving in to “information paralysis” … Let’s sit down together (online), and I’ll help you create a custom blueprint for your international goals… second passports, tax, travel, retirement, estate, business, and more…