On 29 April 2025, the Grand Chamber of the Court of Justice of the European Union (commonly referred to as the “ECJ”) ruled that Malta’s so-called “golden passport” scheme represented a “commercialisation of the grant of the nationality of a member state” and by extension, EU citizenship. European citizenship carries with it an inherent right to live and work in all other EU Member States under the European Treaties, justifying the policing of citizenship in Member States by the bloc’s highest court. The Maltese scheme was said by the ECJ to undermine the mutual trust implied between EU Member States.
Cyprus and Bulgaria have already abandoned citizenship by investment programmes after pressure from the EU, but Malta had strongly resisted until a judgment was reached last month.
Malta offered investors of €600,000 or more a direct route to citizenship, albeit in theory the route contained a residence requirement of three years (on the face of it, requiring the applicant to have lived in Malta for three years). This residence requirement was reducible to a single year for people investing €750,000 (25% more than the base requirement). 15 days in Malta in any given year was normally sufficient to satisfy the requirements and obtain citizenship. Something the ECJ picked up on in particular, in its decision against Malta, was that the scheme had been publicly presented as one for acquiring the wider EU citizenship (not just Maltese), and the benefits that accompany it.
Retrospective effect?
The Government of Malta has announced that it respects the ECJ decision and is studying the legal implications of the ruling. The judgment itself does not expressly order any retrospective effect, but it is still unclear whether citizenships granted under the scheme could be affected. After Cyprus removed its own golden passport scheme, a number of high-profile revocations followed. Although these were done on a case-by-case basis and were not pursuant to any European legal action.
The Malta ruling is therefore potentially important for those who have obtained pre-settled or settled status in the UK, under the EU Settlement Scheme, on the basis of their citizenship granted under the Malta investor scheme, or the citizenship of a partner or family member.
While still uncertain, it seems unlikely that Maltese citizenships obtained under the scheme will be automatically revoked. The same government announcement that conceded to the ruling goes on to “recall” a long list of benefits that the government views its investor citizens have brought to its country. Legal provisions, based on the principle of legal certainty (meaning individuals must normally have some forewarning of the potential for any significant legal change), usually act to limit or prevent the removal of citizenship. For reference, the revocation of British citizenship is normally only possible in the most serious circumstances.
Under the ruling, the Malta citizenship scheme in its current form must be closed, or the state could face EU fines. Although Malta has three months in which to request reconsideration of the decision, a Grand Chamber judgment is not appealable. Whether the Maltese scheme will now simply be altered, and repackaged as a “golden visa” is less clear. The judgment itself was silent on visas or residency (as opposed to citizenship) by investment, but represents the clearest demonstration to date of the EU’s seriousness about its stance on protecting freedom of movement against acquisition solely by investment. The fact that the European Commission has also stated its interest in combating golden visa schemes could indicate that further litigation in this vein, against Member States still offering golden visas, is on the horizon.
Golden visas and Golden passports? What’s the difference?
It is important to distinguish what are commonly called “golden visas” from “golden passports.” In a golden visa scenario, an applicant who can demonstrate a certain level of investment in specified “qualifying assets” based in a particular country is granted temporary leave to enter and remain in that country, (aka a “visa”).
Golden “passports” however, as in the Malta scheme, describe an application or scheme that leads directly to citizenship. Citizenship almost invariably brings with it a lifelong (often, multigenerational) right to live and work in a particular country’s territory.
In the UK, certain types of visa offer a route to eventual residency, provided that conditions are later met by those visa holders. Although residency is usually a further stepping-stone towards citizenship, it is not the same thing, and (like a visa) residency will lapse after a certain time is spent outside the UK. Revocation and deportation of a resident is also possible where they have committed serious crimes.
Only someone who has already been a UK “resident” for at least one year is able to make an application for British citizenship by “naturalisation”. Furthermore, all UK residents who are applying for naturalisation as British citizens are, by default, required to have lived in the UK for at least the preceding five years. Importantly, and also at significant odds to the Maltese scheme, the requirements for time spent in the UK are strictly enforced and applicants must intend to continue living in the UK as their principal home. Applicants must also be of good character and have knowledge of language and life in the UK.
The UK has never had any scheme that could be described as a “golden passport”, whereby individuals are able to purchase British citizenship directly. There was, however, a visa called the “Tier 1 Investor Visa” for those investing £2 million in UK qualifying assets. The investor visa did provide successful applicants with a route to residency, and expedited routes for those who had invested larger sums. Citizenship applications from those investor residents nevertheless always required five years of continuous residence in the UK in order to be successful.
The British government announced in February 2022 that it was scrapping the UK’s “tier 1 investor visa” amid national security concerns and worsening relations with Russia. A review of 6,312 investor migrants had found “a small minority of individuals that were potentially at high risk of having obtained wealth through corruption or other illicit financial activity…” The government also cited concerns about the economic value of an investment-based route based on passive wealth.
Given the UK’s exit from the EU, adopting a different position to the one that the Commission is taking, by reintroducing an investor visa, is possible. However, this would mark a noteworthy legal divergence from our biggest trading partner. The prospects for a new investor visa are also affected by what appears to be continuing interest in Whitehall in heightening the requirements on UK visa holders and residents, rather than introducing new pathways or re-introducing old ones. Any increased restrictions on residents will in turn make acquiring UK citizenship more difficult.
Despite the removal of the UK investor scheme, alternative options for wealthy individuals seeking to relocate to the UK remain, such as via the Global Talent, Skilled Worker and Innovator Founder routes.
If you are looking to invest in a UK business and to move to the UK, we are able to advise and assist you on your available options.
For further information, please contact Kathryn Bradbury, Partner or Matt Ingham, Partner.
