Malta’s Citizenship Regulations: The Court’s Position and Malta’s Response

On 29 April 2025, the Court of Justice of the European Union (CJEU) delivered its judgment in European Commission v Republic of Malta, Case C-181/23, concerning Malta’s citizenship framework introduced in 2020.

The Court found that the institutionalised granting of nationality in direct exchange for predetermined financial contributions was incompatible with EU law.

While reaffirming that Member States retain competence over nationality matters, the judgment clarified that this competence must be exercised consistently with the obligations arising under the EU Treaties.

The Government of Malta responded by confirming its respect for the ruling, reiterating the principle of national sovereignty in citizenship matters and undertaking to bring the relevant legislation into conformity with the Court’s findings.

These developments subsequently resulted in legislative amendments enacted in July 2025, which discontinued the former transactional arrangements while reinforcing Malta’s distinct legal provisions for naturalisation on the basis of merit.

In its judgment of 29 April 2025, the CJEU examined whether Malta’s citizenship framework, introduced through amendments to the Maltese Citizenship Act in 2020, was compatible with the obligations arising under the EU Treaties.

The proceedings were brought by the European Commission under Article 258 of the Treaty on the Functioning of the European Union (TFEU).

The Commission argued that the granting of nationality primarily in exchange for predetermined financial contributions, without requiring a sufficient connection between the individual and the granting state, undermined the nature of Union citizenship and the principle of sincere cooperation between Member States.

The Court upheld the Commission’s action.

In its judgment in Case C-181/23, the Court characterised the arrangement as:

“a transactional naturalisation procedure in exchange for predetermined payments or investments”

The Court considered that such arrangements amounted to the commercialisation of Member State nationality and, by extension, Union citizenship.

This was found to be inconsistent with Article 20 TFEU, concerning citizenship of the Union, and Article 4(3) of the Treaty on European Union (TEU), establishing the principle of sincere cooperation.

The judgment consequently established an important limitation on the use of predetermined financial transactions as the basis for acquiring nationality within the European Union.

An important element of the judgment was the Court’s recognition that nationality remains a matter falling within the competence of individual Member States.

The European Union does not possess general legislative competence to determine the conditions under which individuals become nationals of its Member States.

However, the Court reaffirmed that national competence must be exercised consistently with EU law.

This reflects the relationship between national citizenship and Union citizenship. Under Article 20 TFEU, every person holding the nationality of a Member State is also a citizen of the European Union.

The Court considered that this relationship carries wider constitutional implications because the nationality decisions of one Member State affect the rights and obligations recognised throughout the Union.

In reaching its decision, the Court emphasised the special relationship of solidarity and good faith between a state and its nationals, together with the mutual trust and reciprocity underpinning Union citizenship.

Importantly, the judgment should not be interpreted as introducing a universally applicable minimum period of residence or a single prescribed test for acquiring nationality throughout the European Union.

The Court’s finding concerned the specific legal structure and transactional nature of Malta’s 2020 framework.

The broader implications of this distinction for European nationality law are examined in the CCLEX publication European Citizenship After Commission v Malta.

The Court’s decision also represented a departure from the earlier opinion delivered by Advocate General Anthony Michael Collins on 4 October 2024.

In his opinion, Advocate General Collins recommended that the Court dismiss the European Commission’s action against Malta.

His reasoning placed considerable emphasis on the distinction between national competence over nationality and the obligations arising under EU law.

In particular, he considered that the Commission had not established that Article 20 TFEU imposed a general requirement for a genuine or prior genuine link between an individual and a Member State as a condition for the lawful grant of nationality.

The Advocate General also examined the relevance of international nationality law and the distinction between the acquisition of citizenship and cases involving its loss or deprivation. His opinion in Case C-181/23 was advisory and did not bind the Court.

The final judgment nevertheless recognised the underlying principle that nationality remains a national competence, while adopting a different interpretation of the limitations imposed by the EU Treaties.

This distinction is significant. The disagreement was not simply about whether nationality decisions belong to Member States, but about the extent to which EU law restricts how that competence may be exercised.

Following the judgment, the Government of Malta issued an official statement on 29 April 2025, confirming that it respected the decision and would examine its legal implications.

At the same time, the Government reaffirmed its longstanding position that the granting of citizenship falls within national competence.

The Government noted that its position had been supported by the Advocate General’s earlier opinion, which recommended dismissal of the Commission’s proceedings.

In its official statement following the judgment, the Government identified several important considerations.

Respect for the Court’s judgment

Malta confirmed that the implications of the decision would be examined and that the applicable regulatory framework would be brought into line with the principles established by the Court.

Preservation of national competence

The Government maintained that the determination of nationality remains a sovereign responsibility, while acknowledging the Court’s findings concerning compliance with EU obligations.

Legal certainty for existing citizens

Of particular importance to individuals who had previously acquired Maltese citizenship, the Government expressly stated:

“decisions taken under both the current and the previous legislative framework remain valid.”

This statement was intended to provide reassurance concerning the continued validity of past nationality decisions.

The judgment itself concerned Malta’s compliance with its EU Treaty obligations. It did not constitute an individual determination annulling citizenship previously granted to particular persons.

Continued commitment to Malta’s development

The Government also reaffirmed its intention to attract individuals and investment capable of contributing positively to Malta’s development and to the interests of the Maltese and Gozitan people.

The immediate response therefore combined recognition of the Court’s decision with the preservation of Malta’s position on national sovereignty, legal certainty and the importance of meaningful contributions to the country.

The legal developments following the judgment culminated in amendments to the Maltese Citizenship Act.

On 16 July 2025, the Government announced proposed legislative changes intended to bring the relevant provisions into conformity with the Court’s ruling.

These changes were subsequently enacted through the Maltese Citizenship (Amendment) Act, 2025, Act XXI of 2025, published on 24 July 2025.

The amendments pursued three principal objectives.

First, they removed the provisions governing the former transactional citizenship arrangements, including references to the relevant financial transactions and associated agents.

Secondly, they strengthened the existing provisions concerning the discretionary granting of citizenship on the basis of merit, exceptional services, exceptional contributions and national interest.

Thirdly, they maintained the principle that the granting of nationality remains within Malta’s national competence.

The amendments were accompanied by changes to the relevant subsidiary legislation, including Legal Notice 159 of 2025.

These developments are reflected in the Maltese Citizenship (Amendment) Act, 2025 and the subsequent official notice issued by Community Malta Agency.

Citizenship by Merit and Sovereign Discretion

The distinction between the former transactional arrangements and Malta’s separate legal framework for citizenship by merit is fundamental.

Under the latter framework, naturalisation remains discretionary and is considered individually by reference to exceptional services, contributions or exceptional national interest.

A minimum of eight months of legal residence is required. Physical in-person presence is assessed on a case-by-case basis, taking account of the relevant circumstances, ties and the nature, value and alignment of the exceptional services or contributions involved.

The July 2025 legislative developments are considered more fully in Chetcuti Cauchi Advocates’ analysis of Malta’s citizenship law reform and the expansion of merit-based naturalisation.

The judgment and subsequent legislative developments have different implications depending on an individual’s circumstances.

For individuals who had already acquired Maltese nationality under previous legal frameworks, the Government’s statement confirming the continued validity of past citizenship decisions was particularly important.

Such individuals should distinguish between the finding that Malta had failed to fulfil its obligations under EU law and any separate legal question concerning the validity of an individual grant of nationality.

The judgment did not itself determine the status of individual naturalised citizens.

For individuals whose applications were pending when the legislation changed, the applicable transitional provisions and the circumstances of each application require separate consideration.

For prospective applicants, Malta’s current legislative framework must be assessed independently of the provisions governing the former arrangements.

The current framework for citizenship by merit is legally distinct and does not create an automatic entitlement to nationality through financial contribution.

These distinctions are particularly relevant to internationally mobile families and their advisers, for whom certainty concerning nationality, residence status and the applicable legal framework may form part of wider personal and family planning.

The judgment in Commission v Malta represents an important development in the relationship between national sovereignty and European citizenship.

It confirms that although Member States determine their nationality laws, the exercise of that competence may be subject to scrutiny where it affects obligations arising under EU law.

At the same time, the judgment did not create a uniform European nationality code or remove the discretion traditionally exercised by states in matters of naturalisation.

The central legal distinction emerging from the proceedings concerns the difference between the recognition of nationality through an exercise of sovereign discretion and its acquisition through an institutionalised commercial transaction.

Malta’s subsequent legislative response reflects an attempt to preserve that distinction while maintaining its sovereign competence over nationality.

The longer-term implications of the judgment for European citizenship law will depend on how its principles are interpreted and applied in future cases.

How Our European Citizenship Lawyers Can Help You

CCLEX’s European Citizenship Lawyers advise internationally mobile individuals and families on nationality law, residence and citizenship matters across selected European jurisdictions.

Our Immigration & Global Mobility team assists clients in understanding the implications of legislative and judicial developments, assessing their individual circumstances and identifying the legal requirements applicable to prospective or existing nationality arrangements.

Our lawyers also advise on questions involving Maltese nationality, exceptional naturalisation and the interaction between domestic citizenship legislation and European law.

About the Authors: Professional Contribution and Expertise

Dr Antoine Saliba Haig is a Partner specialising in Immigration & Global Mobility, with particular expertise in Maltese citizenship and nationality law. His legal practice covers citizenship by descent, marriage and naturalisation, together with cross-border immigration and residence matters affecting international families.

His doctoral research examined the acquisition and loss of Maltese citizenship, providing a specialist academic foundation for his professional work. Antoine joined the firm in 2014 and was admitted to the partnership in 2025. He contributes to industry publications, including Investment Migration Insider, and has participated in international conferences addressing citizenship and global mobility law.

Dr Jean-Philippe Chetcuti, BA, LLM, LLD, TEP is a co-founding partner of CCLEX, with over 25 years’ experience advising international families, entrepreneurs and HNW individuals on citizenship, residence and private client tax law. He is a specialist in European Citizenship Law and Citizenship by Merit frameworks.

His thought leadership includes the doctrine of contributive belonging and the concept of citizenship and residency as a distinct asset class, developed through the CCLEX Mobility Assets Spectrum™.