Malta’s citizenship-by-investment programme has always been controversial. For investors, it represented one of the most powerful propositions in the investment-migration market. Make a substantial economic contribution. Establish a connection with Malta. Complete an extensive due-diligence process, and potentially obtain Maltese citizenship.
For Malta, the programme represented something different. It was a mechanism for attracting international capital, entrepreneurs and wealthy families to a small European country.
For the European Union, however, the issue was much larger. It was a question of whether one Member State could effectively grant access to EU citizenship — and therefore EU rights — to an individual primarily because of an economic contribution.
That question is now before the Court of Justice of the European Union. The outcome could define the future of European citizenship by investment.
Citizenship Is Different
There is an important distinction between residence and citizenship.
Residence gives an individual permission to live in a country.
Citizenship is a much deeper relationship.
It creates membership of the state.
For Malta, it also creates EU citizenship.
That gives the individual rights that extend beyond Malta itself.
Freedom of movement.
The ability to live and work elsewhere in the European Union.
Access to the wider European economic area.
The right to participate in the political life of the country.
And, importantly, the status of being a citizen of an EU Member State.
This is why the European debate has always been more intense around citizenship than residence.
Malta Became the Test Case
Malta introduced its citizenship-by-investment framework as a way of attracting individuals who could make an exceptional contribution to the country.
The framework involved investment, property commitments, charitable contributions and a rigorous due-diligence process.
The programme was subsequently amended several times.
Malta also imposed limits on the number of successful applications.
The Government’s position has consistently been that citizenship remains a national competence.
That is an important legal argument.
Citizenship is fundamentally determined by Member States.
But the European Commission has taken the view that national competence cannot be exercised in a way that undermines the nature of EU citizenship.
That is the central conflict.
The European Commission Took Malta to Court
The Commission formally launched infringement proceedings against Malta in 2020.
In 2022, the Commission issued a reasoned opinion stating that granting EU citizenship in return for predetermined investment or payments, without requiring a genuine link with the country, was contrary to EU law.
In March 2023, the Commission referred Malta to the Court of Justice of the European Union.
The case is C-181/23, Commission v Malta.
As of March 2025, the Court has not yet delivered its judgment.
That makes the case unusually important.
The question is no longer simply whether Malta’s programme is politically popular.
It is whether the legal model itself is compatible with the European legal order.
What Is the Court Really Being Asked?
At the heart of the dispute is a fundamental question.
Can a Member State treat citizenship as something that can be granted in exchange for a predetermined economic contribution?
Malta’s position has been that citizenship is a sovereign national competence.
The Commission’s position is that Member States must respect EU law when exercising that competence because national citizenship automatically creates EU citizenship.
This is not a technical immigration dispute.
It goes to the structure of the European Union itself.
The Investor Sees Something Different
The investor sees the issue differently.
An HNWI is not necessarily trying to “buy” a passport.
The individual may be seeking:
- greater mobility;
- security;
- access to Europe;
- educational opportunities for children;
- diversification of nationality;
- geopolitical optionality;
- business opportunities; and
- long-term family planning.
For some families, citizenship is effectively another form of diversification.
Just as they diversify banks, currencies and investment managers, they may want to diversify their legal and geographic options.
That demand is not going away.
The Industry Has a Problem With the Language
The phrase “citizenship by investment” itself creates a political problem.
It makes citizenship sound like a product.
A government is not selling a passport in the same way that a company sells a financial product.
Citizenship represents a relationship between an individual and a state.
This is why the future industry may need to change its language as well as its structure.
The proposition cannot simply be:
Pay €X and receive citizenship.
That is precisely the model that has attracted the greatest criticism.
The proposition increasingly needs to become:
Make a genuine contribution, establish a meaningful connection and demonstrate that you are an appropriate future citizen.
That is a very different concept.
Due Diligence Is Not Enough
Malta has always placed significant emphasis on due diligence.
The programme developed a multi-stage due-diligence process intended to identify applicants who should not qualify.
This is important.
But it does not necessarily answer the European legal question.
There are really two separate issues.
Who should be allowed to become a citizen?
And:
Can citizenship be granted principally because a person makes a predetermined economic contribution?
The first is a due-diligence question.
The second is a constitutional and public-policy question.
The distinction matters.
The Investment Does Matter
There is also a legitimate economic argument on Malta’s side.
A small country can benefit substantially from attracting wealthy international investors.
Capital can finance businesses.
Property can generate economic activity.
Entrepreneurs can establish companies.
Professional services can expand.
Families can spend and invest locally.
Philanthropic contributions can support institutions.
The economic contribution is therefore real.
The question is whether that economic contribution should itself be sufficient to justify citizenship.
That is where the political debate becomes difficult.
Residence Is Easier to Defend
This is one reason why residence-by-investment has a potentially longer future.
A state can say:
You may live here because you have invested here.
The connection is relatively straightforward.
Citizenship is different.
The state is saying:
You are now one of us.
That carries a different political and constitutional weight.
This distinction is likely to remain important even if investment migration continues to expand.
Europe Is Already Moving Toward a Different Model
The direction of travel across Europe is increasingly clear.
Traditional property-based residence programmes are under pressure.
Portugal removed its traditional real-estate Golden Visa route.
Spain has been moving toward the abolition of its property-based Golden Visa.
Greece has increased its investment thresholds in certain markets.
Ireland closed its investor programme.
The common theme is that governments are becoming more selective about the type of capital they want.
Citizenship is undergoing the same transformation.
The Next Generation May Be About Merit
There is another possibility.
Instead of treating citizenship as something granted because an investor pays a fixed amount, countries could focus more heavily on merit.
Entrepreneurs.
Scientists.
Researchers.
Technology founders.
Artists.
Athletes.
Investors creating substantial employment.
Philanthropists.
Individuals making an exceptional contribution to the country or society.
This is closer to the traditional concept of naturalisation.
It is also much easier to defend politically.
The individual is not simply purchasing citizenship.
The individual is demonstrating why the state should want them as a citizen.
Malta Has an Opportunity
Regardless of the eventual outcome of the CJEU case, Malta has an opportunity to rethink the model.
The country does not need to abandon international investors.
It needs to determine what it wants from them.
Malta is a small EU Member State.
Its advantages include its geographic position, English-speaking environment, financial-services sector and connection to the European market.
There is a natural economic proposition available.
But it should be based on genuine economic participation.
Not simply a transaction.
The Investment Fund Model Is Interesting
This is where investment funds become particularly relevant.
A fund can provide a mechanism through which international capital enters the economy.
Rather than purchasing a passport, the investor allocates capital.
The capital can be directed toward businesses, infrastructure, private equity, venture capital or other productive investments.
The investor receives an investment asset.
The country receives capital.
And the economic contribution can be measured.
This is fundamentally different from treating citizenship itself as the investment product.
But a Fund Does Not Solve Everything
The industry should not make the mistake of assuming that putting an investment into a fund automatically solves the political problem.
It does not.
The fund must be genuine.
The investment must be genuine.
The economic activity must be genuine.
The governance must be credible.
And the applicant still needs to demonstrate why they should qualify.
Otherwise the fund simply becomes another mechanism for disguising a citizenship transaction.
That would not solve the underlying problem.
Citizenship Should Follow Contribution
This may ultimately be the better model.
Instead of:
Investment → Citizenship
the relationship becomes:
Contribution → Connection → Citizenship
The distinction is subtle but important.
The investment is evidence of commitment.
It is not necessarily the price of the passport.
The applicant becomes part of an economic and social ecosystem.
That creates a much stronger basis for citizenship.
The Investor Also Wants More
Interestingly, sophisticated investors may actually prefer this model.
The wealthy investor does not necessarily want to make a €1 million contribution that simply disappears.
They may prefer to invest €1 million into an asset with a potential financial return.
If the investment also contributes to qualifying for residence or citizenship, the investor receives two benefits.
Investment return.
And immigration optionality.
That is a much more sophisticated proposition.
The Future Market May Become Smaller
There is another consequence.
The European citizenship-by-investment market may become smaller.
That is not necessarily negative.
A programme attracting fewer but higher-quality applicants may be economically more valuable than one attracting thousands of applicants purely because the financial threshold is attractive.
The future market may therefore focus on:
quality rather than volume.
This is already happening elsewhere in investment migration.
The European Union Is Setting a Boundary
The Malta case also demonstrates something larger.
The European Union is increasingly prepared to intervene where national investment-migration programmes have implications beyond national borders.
The same pattern can be seen in the EU’s approach to Golden Visas.
Money laundering.
Security.
Tax transparency.
Sanctions.
Housing.
And ultimately citizenship.
The European investment-migration industry is therefore operating within a much more regulated environment than it was ten years ago.
This Is Not the End of Investment Migration
There is a temptation to look at the Malta dispute and conclude that investment migration is disappearing.
I don’t think that is correct.
The demand remains.
Global wealth remains mobile.
Geopolitical uncertainty remains.
Entrepreneurs still want access to different markets.
Families still want optionality.
Investors still want diversification.
What is changing is the product.
The Passport Is Becoming the Wrong Product
The strongest future programmes may not sell the passport.
They may sell something broader.
A long-term relationship with a country.
Residence.
Investment.
Business opportunities.
Education.
Family security.
Tax planning.
Access to markets.
And potentially, eventually, citizenship.
Citizenship then becomes the consequence of a genuine relationship rather than the immediate objective of an investment transaction.
The Malta Case Will Matter
The CJEU’s eventual judgment will be important.
If the Court takes a restrictive approach, other European citizenship-by-investment models will have to reconsider their structures.
If it gives greater weight to national competence, the debate will continue in a different form.
Either way, the case will not settle the commercial demand for investment migration.
It will define the legal parameters within which that demand can be served.
The Industry Has a Choice
The investment-migration industry can continue defending the old model.
Or it can evolve.
The second option is probably better.
The industry should stop presenting citizenship as a commodity.
Governments should stop measuring success purely by capital raised.
Investors should stop selecting programmes purely by price.
And investment structures should be designed to create genuine economic value.
That would create a more sustainable industry.
Citizenship Is Still Valuable
None of this diminishes the value of citizenship.
If anything, it increases it.
Citizenship should be valuable precisely because it is not simply a financial product.
It represents membership.
Identity.
Rights.
Responsibilities.
And a long-term relationship with a country.
That is why governments have become more protective of it.
And why investors should expect greater scrutiny when seeking it.
The Future of Citizenship by Investment
The next generation of investment migration will therefore look different.
Residence may continue to be linked to investment.
Investment funds may become more important.
Private equity and productive capital may replace passive property.
Due diligence will become more sophisticated.
And citizenship programmes may increasingly focus on exceptional contribution and genuine connection.
The question is no longer:
How much money does the applicant have?
It is:
What does the applicant bring to the country?
That is a much more difficult standard.
But it is also a much more sustainable one.
The Malta case may ultimately become the moment when Europe stopped treating citizenship by investment as a product and started treating it as public policy.
Citizenship should not be something an investor simply buys. It should be something a country has a reason to grant.