Malta has been told its "golden passport" programme that allows wealthy foreigners to buy citizenship is an infringement of EU law.
The EU Commission in 2022 took the Mediterranean nation to court over the scheme, which grants foreign citizens a passport, and thereby the right to live and work in any EU country in return for about €1 million ($1.1 million).
Now the EU’s Court of Justice has ruled “the acquisition of Union citizenship cannot result from a commercial transaction”.
"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 said.
Although the court stressed each member state has its own right to decide on nationality, this is a freedom that must "be exercised in compliance with EU law".
The Maltese scheme "infringes the principle of sincere co-operation and jeopardises the mutual trust between member states concerning the grant of their nationality", the court said.
Malta had repeatedly insisted it was correct in its interpretation of EU treaties. The judgment is at odds with the non-binding opinion of an adviser to the EU tribunal, who said last year it was for the countries themselves to “determine who is entitled to be one of their nationals and, as a consequence, who is an EU citizen”.
Schemes allowing wealthy foreigners to pay for passports became popular in the bloc after the financial crisis of 2009, when they were introduced to attract new investors.
But most EU nations scrapped golden passports and visas over their links to a housing crisis in Europe, as well as fears of the programme's potential for encouraging white-collar crime, corruption and money laundering.
In the UK’s case, rising security concerns after the 2018 Salisbury poisoning, then aggressive sanctions on Russian citizens following Moscow’s invasions of Ukraine in 2014 and 2021 were also a factor.
Malta suspended the programme for Russian and Belarusian citizens after the start of the war in Ukraine but the scheme remained open to other nationalities.
The European Commission launched infringement procedures against Malta and Cyprus in 2020 over their golden passport programmes.
After Cyprus in 2021 and Bulgaria in 2022 ended theirs, Malta held out with the once-widely embraced scheme in Europe and the UK to drum up revenue, especially in some nations hit hard by the 2009 financial crisis.
The UAE launched long-term residence visas in 2019 that enable foreigners to live, work and study in the Emirates without the need for a national sponsor.
These visas can be issued for five or 10 years and are renewed automatically. An investor can acquire property, through various means, valued at Dh2 million ($540,000) or more to qualify for the golden visa.
Over the past few weeks, changes have been announced with two new visas introduced and an existing one expanded.
Many EU countries, including Germany, Portugal, Hungary and Luxembourg, also continue to offer residency in return for investment.
President Donald Trump has recently made moves to entice rich foreign investors to the US. The so-called Trump Gold Card offers residency and a path to citizenship to investors who pay $5 million to the Treasury.
Secretary of Commerce Howard Lutnick said the government sold more than 1,000 visas in one day last month.
