Malta's 'golden passport' program, allowing foreigners to acquire citizenship in exchange for investments, has been ruled illegal by the European Union's highest court.
In a stunning turn of events, the European Court of Justice (ECJ) has pronounced Malta's infamous "golden passport" program as unlawful, as of April 2025. This bombshell decision marks the end of the citizenship-by-investment scheme, which offered foreign investors a Maltese passport in exchange for financial investments, as it allegedly commercializes EU citizenship and undermines the mutual trust among member states[1][2][3].
The Tide Turns for Malta's Golden Passport Scheme
Legal Fallout
- Termination Order: Malta faces the arduous task of terminating its citizenship-by-investment program in line with this ruling.
- Legal Dispute: Refusal to comply may lead to further legal battles with the European Commission, which has the authority to enforce compliance with EU law[1].
Economic and Reputational Repercussions
- Fiscal Setbacks: Cessation of the scheme will undoubtedly result in a substantial loss of revenue for Malta, which had banked on the program as a significant income source.
- Business Shockwaves: Companies and financial institutions, heavily reliant on the program, will need to rethink their approaches, potentially causing economic ripples[3].
Malta's Predicament: Comply or Risk Consequences
Financial Sanctions
The European Commission holds the power to levy financial penalties on Malta for defying the ruling, in an effort to compel the country to adhere to EU law[1].
Diplomatic Impacts
- Strained Relations: Failure to comply with the ruling may damage Malta's standing within the EU and potentially sour its relations with other member states, negatively affecting its integration efforts.
Overall, this ruling disrupts the landscape of investment-based citizenship schemes within the EU andhas the potential to reshape similar programs in other member states[2]. Malta now teeters on the edge of a significant transformation, forced to reassess its strategic economic policies to ensure compliance with the ruling of the notorious golden passport debacle.
[1] https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/11863-Golden-Passports-and-other-investment-based-residency-and-citizenship-schemes_en
[2] https://ec.europa.eu/info/publications/selected-details-court-case-c-574-19_en
[3] https://www.euractiv.com/section/justice-home-affairs/news/malta-appeals-eu-court-ruling-on-golden-passports/
- Given the European Court of Justice's judgement, Malta is mandated to terminate its citizenship-by-investment program by April 2025, halting the practice of offering Maltese passports in exchange for financial investments.
- Malta's refusal to comply with this ruling could potentially lead to further legal disputes with the European Commission, which has the authority to enforce EU law.
- The termination of the golden passport scheme will impact Malta's economy, leading to substantial fiscal setbacks due to the loss of revenue, with potential economic ripples affecting companies and financial institutions heavily reliant on the program.
- Malta's failure to comply with the ruling could also strain its relations within the EU, potentially souring its relationships with other member states and negatively affecting its integration efforts.
