Insights

(Case-181/23 – Citizenship by Investment)

The Court of Justice of the European Union (CJEU) has announced the date for its much-anticipated ruling in the EU Commission’s infringement proceedings against Malta’s Citizenship by Investment framework: April 29, 2025. This follows the favourable Advocate General’s Opinion issued on October 4, 2024.

This decision will mark the culmination of a legal battle that began in October 2020 and saw Malta referred to the CJEU in March 2023.

Background reminder

Malta’s Citizenship by Investment (CBI) framework, officially called “Naturalisation for Exceptional Services by Direct Investment,” allows up to 1,500 individuals (with an annual cap of 400 main applicants) to gain Maltese citizenship by making significant economic contributions. This citizenship also grants EU citizenship.

In Commission v Malta (filed on the 22nd March 2023), the European Commission argues that Malta is violating Article 20 and Article 4(3) of the Treaty on the Functioning of the EU (TFEU) by granting citizenship to individuals with no “genuine link” to the country. The Commission claims this undermines the integrity of EU citizenship.

Malta, however, asserts that citizenship decisions are a matter of national sovereignty. It argues that neither EU law nor international law mandates a “genuine link” requirement for citizenship, maintaining that each country has the right to define its own criteria for granting nationality. According to Malta, the Commission has also over-simplified Malta’s CBI framework which involves a thorough and in-depth due diligence process with respect to the main applicant and his or her family members (besides other elements).

What do we know so far?

On the 4 October 2024, Advocate General Collins’ delivered his opinion in the proceedings, recommending that the Court dismiss the Commission’s case. He has advised the Court that the European Commission has failed to prove that EU citizenship law requires the existence of any “genuine link” or “prior genuine link”, while also emphasising that such decisions on granting citizenship are a matter of national sovereignty and do not fall under EU law.  Collins stated: “Member States have decided that it is for each of them alone to determine who is entitled to be one of their nationals and, as a consequence, who is an EU citizen”. (para.46)

Collins’ confirmed that it is “settled case-law that it is for each Member State, acting within its exclusive competence and having regard to international law, to lay down the conditions under which its nationality may be acquired and lost” (para.44). He further underscored that the EU can only intervene in citizenship matters when a Member State acts contrary to EU law.

What is an Advocate General (AG) and what role does the AG play?

While the Advocate General’s opinion strongly supports Malta’s arguments, his opinion is not binding on the Court and the final decision ultimately lies in the hands of the Court of Justice of the European Union.  It is the role of the Advocates General to, in complete independence, propose to the Court a legal solution to the cases that they are responsible for, and today’s Opinion is Advocate General Collins’ proposed legal solution to the infringement proceedings brought by the Commission against Malta in respect of the latter’s Citizenship by Investment framework.

Conclusion

As the last active CBI framework in the EU, Malta hopes its thorough applicant vetting process will continue to set a high standard. Applicants undergo extensive scrutiny to ensure their suitability.  Malta never promised a quick citizenship, or a simple process, but it always reassured applicants that at the end of thorough scrutiny, successful applicants will join a very select group of quality individuals who integrate into Maltese society and contribute to its economy.

The upcoming ruling on April 29, 2025, is expected to significantly impact the future of citizenship by investment frameworks across the EU. Malta and its many applicants await the decision with great anticipation.