An exclusive opinion piece for IMGW News by legal expert Rui Assis Passos
The European Court of Justice (ECJ) has delivered a landmark ruling in Case C-181/23, Commission v. Malta, declaring Malta’s Citizenship by Investment (CBI) programme incompatible with European Union law. The judgment represents a pivotal development in the EU’s evolving position on investment-based naturalisation, reaffirming that citizenship must embody a genuine link to a member state—rather than being reduced to a financial transaction.
In this exclusive opinion piece for IMGW News, legal expert Rui Assis Passos offers his analysis and reflections on the implications of the case.
“More rigorous requirements—such as prolonged physical residence, language proficiency, or civic integration – could help align its programme with EU norms while preserving its attractiveness to investors”
A Tale of Two Programmes
Residency and citizenship by investment programmes have proliferated over the past decade, offering individuals the possibility of acquiring rights in return for substantial economic contributions. The distinction is key:
- Citizenship by Investment (CBI) confers full nationality—typically including a passport—often without demanding physical residence or cultural integration.
- Residency by Investment (RBI) grants residence permits that may lead to naturalisation, usually subject to ongoing investment and residency criteria.
Though such programmes can inject much-needed capital into national economies, they have drawn criticism for their potential to facilitate money laundering, obscure beneficial ownership, and undermine the perceived value of citizenship.
Brussels Tightens the Reins
The EU’s position has gradually hardened. In 2014, the European Commission voiced concern over CBI programmes that appeared to circumvent the principle of genuine ties. By 2020, infringement proceedings had been launched against Malta and Cyprus. Two years later, the Commission formally recommended the abolition of all CBI programmes and tighter scrutiny of RBI programmes.
The ECJ’s 2025 judgment is thus the culmination of a long-running institutional unease. The court affirmed that EU citizenship, as a status derived from national citizenship, cannot be commodified. Citizenship, the Court held, entails reciprocal rights and obligations and should not be dispensed in return for payment.
More Than a Passport
The ruling reasserts a foundational tenet: EU citizenship brings substantial privileges—freedom of movement, the right to work and reside across member states—but these rights must be underpinned by genuine belonging. Reducing citizenship to a price tag, the Court concluded, is antithetical to the spirit of integration and solidarity that undergirds the Union.
This legal position reflects a broader ethical view that citizenship ought to be earned through a meaningful relationship with the country – by living, contributing, and participating in its civic life.
Risk, Reputation, and Reform
Critics of CBI programmes warn that they pose not only reputational risks but also tangible security concerns. The acquisition of EU citizenship via financial contribution could grant access to the bloc’s internal market and visa-free travel to individuals who have undergone insufficient scrutiny. It also threatens the mutual trust between member states on which the Union’s legal order depends.
That said, investment-based residency programmes, if properly structured, can still play a constructive economic role—funding infrastructure, supporting public finances, and creating employment. The challenge lies in designing such frameworks to preserve public confidence and uphold the integrity of national and EU-level citizenship.
A Question of Sovereignty
Malta now faces a choice: to reform its citizenship regime or risk further confrontation with EU institutions. More rigorous requirements – such as prolonged physical residence, language proficiency, or civic integration – could help align its programme with EU norms while preserving its attractiveness to investors.
Beyond Malta, the case reignites a fundamental legal question: who ultimately governs nationality within the EU? While member states have traditionally exercised exclusive competence over citizenship, the nature of EU citizenship as a derivative yet supranational status may be reshaping this prerogative. The tension between national sovereignty and Union-wide coherence in this area is unlikely to dissipate soon – and will be the subject of a future piece.
References
- Case C-181/23, Commission v. Malta, Judgment of 29 April 2025
- European Commission Press Release, 28 March 2022
- Transparency International, Press Release, May 2025
- Financial Times, April 2025
- OECD, “Misuse of Citizenship and Residency by Investment Programmes,” November 2023
𝑩𝒊𝒐𝒈𝒓𝒂𝒑𝒉𝒚
Rui Assis Passos is a seasoned Portuguese lawyer and founder of ERG Legal in Lisbon. With over two decades of experience in immigration, taxation, and estate planning, he has advised hundreds of high-net-worth individuals on legal pathways across Europe and the Gulf.
A key contributor to Portugal’s recent Golden Visa reform, Dr Passos now turns his attention to a ruling that could reshape the legal and political contours of EU citizenship.
In this commentary, he examines the European Court of Justice’s recent judgment against Malta’s citizenship by investment programme. The decision not only challenges the principle of national sovereignty over naturalisation but also signals a deeper redefinition of what it means to be a citizen in the European Union.
𝑭𝒐𝒓 𝒎𝒐𝒓𝒆 𝒊𝒏𝒇𝒐𝒓𝒎𝒂𝒕𝒊𝒐𝒏 𝒐𝒏 𝑹𝒖𝒊 𝑨𝒔𝒔𝒊𝒔 𝑷𝒂𝒔𝒔𝒐𝒔 𝒂𝒏𝒅 𝑬𝑹𝑮 𝑳𝒆𝒈𝒂𝒍, 𝒗𝒊𝒔𝒊𝒕 𝒘𝒘𝒘.𝒆𝒓𝒈𝒍𝒆𝒈𝒂𝒍.𝒑𝒕
𝑶𝒇 𝑰𝒏𝒕𝒆𝒓𝒆𝒔𝒕
