The Court of Justice of the European Union delivered a significant judgment on 29 April 2025, ruling that Malta’s investor citizenship scheme was contrary to EU law.

The Court found that Malta had commercialised the granting of its nationality, and therefore EU citizenship, by offering naturalisation in direct exchange for predetermined payments or investments.

For you as an investor, business owner or internationally mobile family, the judgment does not mean that European migration planning has ended. However, it does mean that you should be cautious about any service promising quick EU citizenship primarily in return for an investment.

Malta has since discontinued its former citizenship by investment framework and introduced revised rules for naturalisation on the basis of merit. Coates Global’s updated guide to Malta citizenship by investment explains what changed and which options may still be available.

What did the EU Court decide?

The case was formally known as Commission v Malta, Case C-181/23. It concerned Malta’s 2020 investor citizenship scheme, officially called Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment.

Under that framework, foreign nationals could apply for Maltese citizenship after meeting several conditions that were mainly financial. These included a government contribution, an approved property commitment and a charitable donation.

The Court confirmed that each EU Member State remains responsible for setting its own nationality rules. However, those powers must be exercised in accordance with EU law because citizenship of an EU Member State automatically provides EU citizenship.

The judges found that nationality should reflect a relationship of solidarity, good faith and reciprocal rights and duties between a country and its citizens. Granting nationality through a transactional process involving predetermined payments or investments was incompatible with that principle.

The Court also found that the scheme undermined sincere cooperation and mutual trust between EU Member States.

Does the decision ban all citizenship by investment programmes?

The judgment directly concerned an EU Member State offering its nationality through a commercial transaction. It did not rule that every citizenship by investment programme operating elsewhere in the world is unlawful.

Citizenship programmes remain available in several non-EU countries. However, you must assess each option according to its own legislation, due diligence standards, international agreements and travel rights.

You should also avoid assuming that citizenship from a non-EU country provides the same rights as citizenship of an EU Member State. Visa-free travel to the Schengen Area is not the same as the right to live, work and study across the EU.

Why does the ruling matter to UK applicants?

The Brexit transition period ended on 31 December 2020. Since then, most British citizens have no longer benefited from automatic freedom of movement throughout the EU, unless they hold another qualifying nationality or are protected by the Withdrawal Agreement.

This has increased interest in European residence options among UK families, entrepreneurs and retirees. However, residence and citizenship are legally different.

You should begin by identifying your real objective. You may want easier European travel, a second home, access to education, business expansion or a long-term route to permanent residence.

The wider range of global residency and citizenship programmes can then be assessed against those priorities.

Programme costs are normally quoted in euros. If your funds are held in GBP, currency movements can affect the final £ cost of an investment, property purchase, professional fee or government charge.

What happened to Malta’s former scheme?

Malta amended its citizenship legislation on 24 July 2025. Further regulations took effect on 29 July 2025.

The amendments discontinued the Granting of Citizenship for Exceptional Services by Direct Investment framework. References to the investment transaction and the programme’s agents were removed from the legislation.

Malta now has a framework for citizenship by naturalisation on the basis of merit. Community Malta Agency has made clear that this is not a programme, scheme or replacement citizenship by investment pathway.

The current rules allow the responsible minister to consider a person who has provided exceptional services, made an exceptional contribution to Malta or humanity, or whose naturalisation would be of exceptional interest to Malta.

Potential applicants may include scientists, researchers, athletes, artists, cultural performers, entrepreneurs, philanthropists and technologists. Job creation may also form part of an exceptional contribution.

You can review Coates Global’s wider Malta immigration guidance when considering the country as part of a longer-term residence or citizenship strategy.

How does Malta’s merit-based process work?

Citizenship by merit is discretionary and assessed individually. Having substantial wealth, owning property or offering to invest money does not create an automatic entitlement to citizenship.

The process begins with a detailed proposal submitted to Community Malta Agency. It should explain your background, achievements, proposed contribution and plans for continuing that contribution after naturalisation.

Proposals are considered by an independent evaluation board, while the Agency undertakes due diligence and verification. The board makes a recommendation before the proposal is sent to the minister for approval in principle or rejection.

After approval in principle, you must satisfy further requirements. These include:

• Proving at least 8 months of residence in Malta and holding adequate residential property

• Demonstrating the exceptional service, contribution or national interest supporting your application

• Confirming knowledge of Maltese or English

• Providing evidence of the connections you have created with Malta

• Completing the required due diligence and documentation process

The final decision remains with the minister. Approval is not guaranteed, and commitments made during the process may continue after citizenship is granted.

What happened to existing citizenships and pending applications?

The 2025 regulations include transitional provisions. Citizenship already acquired under the previous applicable legislation continues to be regulated by that legislation and remains valid.

However, applications made under Part IV of the former direct investment regulations that had not received ministerial approval for naturalisation before 29 April 2025 ceased to have effect.

This distinction is important. The judgment did not automatically remove the citizenship of every person previously naturalised through the former framework.

If you already hold Maltese citizenship or had an application in progress, you should obtain advice based on your approval date, application stage and supporting documents.

Residence by investment remains legally different

The Malta judgment concerned the transactional granting of nationality. It did not prohibit all residency by investment programmes in the EU.

Residence programmes normally provide a residence permit after you make a qualifying investment or meet another approved condition. They do not provide immediate citizenship.

Naturalisation may become possible later, but only where you satisfy the country’s nationality rules. These may include lawful residence, physical presence, language ability, integration, good character and tax compliance.

Before committing funds, you should compare residency and citizenship programmes carefully.

Key issues to consider include:

• Investment requirements and holding periods

• Residence and renewal conditions

• Source of funds and source of wealth evidence

• Family eligibility and dependant rules

• Tax residence and reporting implications

• The realistic route to permanent residence or citizenship

Which European alternatives could you consider?

There is no direct replacement for Malta’s former investor citizenship scheme.

The Greece Golden Visa may suit you if you want an investment-based residence permit and a Mediterranean base. Investment thresholds and property rules vary, so the location and asset type must be checked carefully.

Portugal residence options include investment and non-investment routes. You should assess residence and citizenship as separate stages because nationality rules can change.

You may also consider Cyprus residency by investment or the Hungary Guest Investor Programme. Neither should be treated as an automatic passport route.

The right option depends on your budget, family needs, preferred location, residence plans and long-term objectives.

Plan around your real priorities

The Malta judgment is a reminder that citizenship and residence planning should begin with your circumstances rather than a heavily promoted programme.

Your application may involve detailed evidence about how your wealth was created and how your funds moved between accounts. Company records, tax returns, bank statements, property sale documents, inheritance records and dividend evidence may all be relevant.

Coates Global’s explanation of how the firm operates sets out the importance of a structured and compliance-led approach.

Before making an investment or relocating your family, make sure the proposed route is legally available and genuinely supports your goals.

Contact Coates Global to discuss your options and build a strategy based on the current rules.