In a landmark judgment delivered on the 29th of April 2025, the Court of Justice of the European Union (CJEU) provided important clarifications on the relationship between national citizenship laws and EU Treaties, with specific reference to Malta’s investor citizenship framework introduced in 2020.
The Court held that while Member States retain sovereignty in determining their own nationality laws, such discretion must be exercised in a manner that respects the principles and values of EU law, particularly where that citizenship also confers rights of Union citizenship.
The judgment affirms that Union citizenship is a fundamental status conferred on nationals of Member States, and is underpinned by a special relationship of solidarity and good faith between a Member State and its citizens.
Although the EU does not have competence to dictate how Member States grant nationality, the Court emphasised that the rights and obligations arising from Union citizenship presuppose a genuine and effective link between the individual and the Member State, consistent with the mutual trust and reciprocity on which the EU is built.
In its decision, the Court noted that regulations granting nationality primarily in exchange for predefined financial contributions, without requiring substantive ties to the country, may not meet the threshold of solidarity and good faith as envisaged under EU law.
According to the Court, programmes structured in this way risk being perceived as a commercialisation of nationality and Union citizenship, which is inconsistent with the spirit of Articles 20 TFEU and 4(3) TEU, relating to citizenship rights and the principle of sincere cooperation.
Court Recognises Member States’ Discretion, But Calls for Compliance
Importantly, the Court did not question the principle that nationality is a national competence. In fact, it reaffirmed that Member States have broad discretion in setting nationality criteria, so long as these are implemented in a manner consistent with EU Treaties.
Malta’s Position and Government Response
Following the judgment, the Government of Malta issued an official press release, underlining its respect for the decision while reaffirming its consistent position on national competence over citizenship matters.
Key points from Malta’s response include:
- The Government is analysing the legal implications of the judgment and will take the necessary steps to align its legislative framework with the principles outlined by the Court.
- Malta highlighted its long-standing position that citizenship decisions remain a national prerogative, a position also supported by the Advocate General’s opinion, which concluded that there was no case against Malta.
- The Government affirmed that past decisions under current and former legal frameworks remain valid, ensuring legal certainty for existing citizens.
- The Government reiterated its commitment to attracting quality investment that contributes meaningfully to the Maltese and Gozitan people.
We will keep you updated with developments as they happen. In the meantime, we anticipate that more formal guidance will be issued by the competent authorities in due course.
In a landmark judgment delivered on the 29th of April 2025, the Court of Justice of the European Union (CJEU) provided important clarifications on the relationship between national citizenship laws and EU Treaties, with specific reference to Malta’s investor citizenship framework introduced in 2020.
The Court held that while Member States retain sovereignty in determining their own nationality laws, such discretion must be exercised in a manner that respects the principles and values of EU law, particularly where that citizenship also confers rights of Union citizenship.
The judgment affirms that Union citizenship is a fundamental status conferred on nationals of Member States, and is underpinned by a special relationship of solidarity and good faith between a Member State and its citizens.
Although the EU does not have competence to dictate how Member States grant nationality, the Court emphasised that the rights and obligations arising from Union citizenship presuppose a genuine and effective link between the individual and the Member State, consistent with the mutual trust and reciprocity on which the EU is built.
In its decision, the Court noted that regulations granting nationality primarily in exchange for predefined financial contributions, without requiring substantive ties to the country, may not meet the threshold of solidarity and good faith as envisaged under EU law.
According to the Court, programmes structured in this way risk being perceived as a commercialisation of nationality and Union citizenship, which is inconsistent with the spirit of Articles 20 TFEU and 4(3) TEU, relating to citizenship rights and the principle of sincere cooperation.
Court Recognises Member States’ Discretion, But Calls for Compliance
Importantly, the Court did not question the principle that nationality is a national competence. In fact, it reaffirmed that Member States have broad discretion in setting nationality criteria, so long as these are implemented in a manner consistent with EU Treaties.
Malta’s Position and Government Response
Following the judgment, the Government of Malta issued an official press release, underlining its respect for the decision while reaffirming its consistent position on national competence over citizenship matters.
Key points from Malta’s response include:
- The Government is analysing the legal implications of the judgment and will take the necessary steps to align its legislative framework with the principles outlined by the Court.
- Malta highlighted its long-standing position that citizenship decisions remain a national prerogative, a position also supported by the Advocate General’s opinion, which concluded that there was no case against Malta.
- The Government affirmed that past decisions under current and former legal frameworks remain valid, ensuring legal certainty for existing citizens.
- The Government reiterated its commitment to attracting quality investment that contributes meaningfully to the Maltese and Gozitan people.
We will keep you updated with developments as they happen. In the meantime, we anticipate that more formal guidance will be issued by the competent authorities in due course.