The so-called “Golden Passport” scheme in Malta, which allows third-country nationals to acquire Maltese citizenship—and consequently EU citizenship—has been ruled incompatible with EU law. This landmark decision was issued on Tuesday, April 29, by the European Court of Justice, marking the end of a legal battle that began in 2020.

Malta’s investment-based citizenship program was the last of its kind in the EU, as Cyprus and Bulgaria had already scrapped theirs in 2020 and 2024 respectively, following pressure from the European Commission.

Now, the only remaining programs in EU member states aimed at attracting foreign investment are “Golden Visa” schemes, which are also under close scrutiny by Brussels.

Golden Passport vs. Golden Visa – Differences and Similarities

A “Golden Passport” or Citizenship by Investment (CBI) program grants EU citizenship to third-country nationals in exchange for a financial investment. In Malta, for instance, purchasing real estate worth €700,000 was sufficient for a third-country national to obtain all the rights of EU citizenship. According to the European Parliament, this has raised concerns about corruption, money laundering, and security threats.

In contrast, the “Golden Visa” or Residence by Investment (RBI) scheme, still active in several EU states including Greece, grants temporary or permanent residence (depending on the country) in return for a set investment amount. If the country is within the Schengen Area, the investor and their family may travel freely within Schengen countries—i.e., most EU member states (except Cyprus and Ireland), as well as Iceland, Norway, Switzerland, and Liechtenstein.

Spain’s Program Termination May Boost Demand in Greece

Golden Visa programs emerged in the early 2000s and became especially popular after the 2008 financial crisis. In 2010, only four EU countries had such programs; by 2017, nearly half of EU member states had adopted similar schemes to boost economic development. However, recent years have seen a shift, with many countries discontinuing these programs due to their perceived impact on housing markets, as in the case of Spain.

Spain’s government, under Pedro Sánchez, has announced it will terminate its Golden Visa program within the year. Analysts suggest this could redirect demand toward the remaining six countries that maintain similar initiatives: Greece, Portugal, Italy, Hungary, Latvia, and Cyprus. However, since Cyprus is not part of the Schengen Area, third-country investors there cannot travel freely within Schengen without following standard entry procedures—potentially increasing demand in Greece and Portugal.

Cypriot legal experts confirmed to newmoney.gr that Cyprus’ residence-by-investment scheme allows legal residency but not employment, nor does it grant freedom of movement within the EU or Schengen Area.

Over €21.4 Billion in Eight Years for EU Member States

According to a report by the European Parliamentary Research Service (EPRS), over 132,000 individuals obtained residency or citizenship in the EU via Golden Visa or Golden Passport programs between 2011 and 2019, generating investments of more than €21.4 billion. From the outset, both programs—particularly the Golden Passport—were closely monitored by the European Parliament and Commission.

The EU Parliament’s LIBE Committee (Civil Liberties, Justice and Home Affairs) and subsequently the plenary called for the abolition of citizenship-by-investment programs and regulation of residence-by-investment schemes. However, the Russian invasion of Ukraine on February 24, 2022, shortly after the LIBE report was approved, added urgency to these concerns.

According to the EU report, although Russian nationals did not dominate the global CBI market, they accounted for over 50% and 40% of citizenships granted through such programs in Cyprus (which ended its scheme in 2020) and Malta, respectively.

A Brussels-based legal source with deep knowledge of EU law told newmoney.gr that “EU law governs entry conditions for certain categories of third-country nationals. However, residence permits granted to investors are still regulated at the national level.”

Still, as noted in European Commission and Parliament reports, “a residence permit issued under an investor residence scheme in one member state has implications for others.” Therefore, the EU Parliament has proposed that countries with Golden Visa programs should make ongoing contributions to the EU budget, proportionate to the investment amounts received.

Brussels: “We Are Closely Monitoring Developments”

Although Golden Visa programs haven’t attracted as much controversy as Golden Passports, the Commission is paying close attention. A senior EU official told newmoney.gr:

“The Commission has repeatedly voiced serious concerns and has taken steps to address the risks posed by investor residence schemes in the EU. In March 2022, following Russia’s invasion of Ukraine, we issued a recommendation for immediate action on both citizenship and residence investor programs.”

The anti-money laundering regulation and directive, adopted in 2024 following a Commission proposal, require member states with such programs to assess related risks and implement mitigation measures. The Commission has also proposed a revision of the Long-Term Residents Directive to introduce stricter controls against abuse by third-country investors.

The Malta Case and the End of Golden Passports

In October 2020, the Commission launched infringement proceedings against Malta. Though Malta suspended its program for Russian and Belarusian nationals after the invasion of Ukraine, it continued it for others. On April 6, 2022, the Commission issued a reasoned opinion—the final step before referral to the EU Court of Justice, which happened in June.

Three years later, the EU Court ruled definitively that Malta’s 2020 citizenship-by-investment program violated EU law, branding it as commercialization of EU citizenship. The Court emphasized that while EU member states retain the right to set nationality rules, this must align with EU principles.

EU citizenship grants access to a common area of freedom, security, and justice, based on mutual trust and recognition of national decisions. Therefore, selling EU citizenship through investments undermines the principle of loyal cooperation and transforms citizenship into a commercial transaction.