Illegal golden passports? Malta’s citizenship-for-investment program struck down by EU over legal and security risks

Malta’s controversial “golden passport” program, which granted citizenship to wealthy foreigners in exchange for hefty investments, has been struck down by the European Union’s top court. In a ruling on Tuesday, the Court of Justice of the European Union (CJEU) declared the scheme illegal, calling it a “mere commercial transaction” that undermines the integrity of EU citizenship, according to a report by Bloomberg.

The court said, “An EU nation 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 ruling puts an end to Malta’s investor citizenship program, which required a minimum donation of €600,000 (Rs 5.74 crores approx), along with property purchases and optional charitable contributions. In return, beneficiaries – including Russian oligarchs, Middle Eastern businessmen, celebrities, and sports stars – received a Maltese passport, unlocking the right to live and work across the EU’s 27-member bloc.

The EU court’s decision came in response to a legal challenge by the European Commission, which argued that Malta’s scheme violated the principle of sincere cooperation enshrined in EU law. The Commission has long voiced concern that such cash-for-passport programs pose risks of money laundering and criminal infiltration.

Not just Malta

Malta is not the only country to have offered similar incentives. Portugal, Ireland, Greece, and Hungary also rolled out “golden visa” and citizenship programs in the wake of the European debt crisis to attract foreign investment. But these programs drew backlash from EU authorities, who warned that selling residency or nationality erodes trust and creates loopholes for illicit actors.

Golden visa vs Gold Card

Ironically, the ruling comes at a time when former U.S. President Donald Trump is attempting to revive investor immigration on American soil. The new “Trump Gold Card” program reportedly offers U.S. residency and a pathway to citizenship in exchange for a $5 million investment. According to U.S. Commerce Secretary Howard Lutnick, over 1,000 such investor visas were sold in a single day in March.

Tuesday’s judgment overrules a non-binding opinion from an EU tribunal adviser who had argued that EU member states retain the right to decide who becomes their nationals. The court, however, held that such decisions cannot be made purely on the basis of cash contributions.