With its judgment in Case C-181/23, the Court of Justice ruled on whether a member state can grant citizenship in return for investment.
Maltese citizenship by investment
In July 2020, Malta implemented the so-called “citizenship by investment” program. This new legislation stipulated how foreigners could acquire the Maltese citizenship through a direct investment.
Under this law, foreign investors could obtain a Maltese passport. Consequently, they could get European citizenship, in exchange for an investment that met certain financial requirements. Naturalization could take place even in the absence of the applicant’s actual ties to Malta. This is different from standard EU citizenship procedures. In fact, most EU countries grant citizenship by birth, continuous residence or through the ius sanguinis principle.
The Commission considered the Maltese citizenship by investment as a violation of the EU rules. Therefore, it brought an action against Malta before the Court of Justice.
Judgement of the Court of Justice
In its judgment of April 29, 2025, the Court recalled that the citizenship granting procedures fall within national competence. However, it also highlited that member states must act in accordance with EU law and principles.
In fact, citizenship should rely on a relationship of solidarity, loyalty and reciprocity of rights and duties between state and citizens. In fact, European citizenship also guarantees free movement within a common area of freedom, security, and justice. This common area is based on the principle of mutual trust between states. Therefore, under the principle of loyal cooperation, each member state must refrain from decisions that endanger the EU common goals.
In conclusion, if a state grants citizenship in return of a predetermined investment or payment, it violates these principles.
So, the granting of citizenship through a commercial transaction is incompatible with the principles and concept of citizenship as defined by the EU treaties. Therefore, the Court found that the Maltese program constituted a violation of the principles of the EU.
