Malta after the CJEU judgment: what remains and what changed

What the Court decided

In Commission v Malta (C-181/23), judgment of 29 April 2025, the Court of Justice of the European Union held that Malta had failed to fulfil its obligations under Article 20 TFEU and Article 4(3) TEU by establishing and operating its 2020 investor-citizenship scheme, under which naturalisation was granted in exchange for predetermined payments and investments. The Court's press release describes the scheme as amounting to the commercialisation of the grant of Maltese nationality and, by extension, of Union citizenship, and as turning the acquisition of nationality into a mere commercial transaction, incompatible with the principle of sincere cooperation and with the mutual trust between member states on which their nationality rules rest.

Two features of the judgment matter for what follows. First, the Court did not hold that member states have lost competence over nationality; it accepted that competence while holding that it must be exercised with due regard to EU law. Second, the Court did not adopt a general genuine-link test for naturalisation. Its reasoning turned on the transactional character of the scheme, the exchange of citizenship for a predetermined payment. That distinction is the space in which Malta's legislative response was built. The Advocate General had proposed that the action be dismissed; the Court did not follow that opinion.

What Malta did next

The Government of Malta issued a press release on the day of the judgment stating that it respected the Court's decision, was studying its implications and would bring the citizenship framework into line with the principles in the judgment, while asserting that decisions already taken under the previous frameworks remained valid. On 30 October 2025 Legal Notice 159 of 2025 amended the regulations under the Maltese Citizenship Act (Subsidiary Legislation 188.06) to replace the investment-based scheme with a merit-based naturalisation: the applicant submits an individual proposal to Community Malta Agency describing exceptional service or contribution to Malta or humanity, or exceptional interest to Malta; the Agency conducts due diligence and an Evaluation Board recommends to the Minister; after approval in principle the applicant files a formal application with evidence of at least eight months' residence, adequate residential property, knowledge of Maltese or English and ties to Malta; and the Minister decides in his discretion, with power to revoke for breach of commitments.

Community Malta Agency's notice of 5 February 2026 states that marketing or promotion of this legislation is not permitted. WG therefore presents the framework as legal information only on its Citizenship by Merit page, offers no citizenship product, and treats any representation that a payment secures Maltese citizenship as both unlawful under EU law and contrary to the Agency's direction.

What the judgment did not touch

The judgment concerned citizenship. It said nothing about residence, and Malta's residence programmes continue under their own legislation with their own conditions. The Malta Permanent Residence Programme under S.L. 217.26 grants permanent residence for a non-refundable administrative fee (€60,000 at the Agency's current figures), a contribution (€37,000), a qualifying property bought for at least €375,000 or leased for at least €14,000 a year, a €2,000 donation and an asset test, after four-tier due diligence; its fees were revised by Legal Notices 310 of 2024 and 146 of 2025, independently of the judgment. The Startup Residence Programme grants residence to founders and core employees of ventures approved by Malta Enterprise. The Nomad Residence Permit grants a year at a time, to a maximum of four, to remote workers earning at least €42,000 from foreign employers or clients. The Global Residence Programme and The Residence Programme grant a special tax status of 15 per cent on foreign income received in Malta with a €15,000 minimum.

EU law on residence by investment is also unchanged by the judgment, though it is not static. The European Parliament and Commission have pressed for stricter conditions on residence-by-investment schemes across the Union, and the Commission's position has been that such schemes must be subject to rigorous due diligence and must not confer rights disproportionate to the applicant's presence. Malta's programmes are, in WG's reading, designed to withstand that scrutiny: they confer residence, not citizenship; they involve a public agency's due diligence rather than a private seller's; and the Agency's own publications now stress the distinction from citizenship.

What changed in practice

Three practical changes follow for families considering Malta. The first is in expectations. A family that approached Malta between 2014 and 2025 expecting a passport within 12 to 36 months of a payment will not get one; a family that wants EU citizenship must now either live in Malta long enough to naturalise under the ordinary residence-based provisions, which are discretionary, or possess the exceptional record the merit framework requires, which cannot be bought and which the Agency will not allow to be marketed.

The second is in due diligence. The investor-citizenship scheme attracted international scrutiny that Malta answered by building an elaborate verification apparatus, and that apparatus is now applied to every residence programme. The Residency Malta Agency's four-tier process covers every adult in the application and the donors, benefactors and business associates behind the funds. Licensed agents, who alone may file, carry their own regulatory exposure and decline cases they cannot stand behind. Families with complex ownership, political exposure or any prior refusal elsewhere should prepare the source-of-wealth narrative before filing.

The third is in the value of presence. Because citizenship is no longer a product, the question of whether a family actually lives in Malta has become the determinant of what Malta offers. A family present enough to acquire EU long-term resident status after five years gains Union-wide mobility rights; a family that holds an MPRP certificate from abroad gains permanent residence and Schengen visits, which is valuable but limited. The judgment, in effect, restored the link between residence and rights that the citizenship scheme had severed.

Reading the risk honestly

Clients ask whether the residence programmes are safe from a similar challenge. No lawyer can promise that EU law will not develop. What can be said is that the Court's reasoning rested on the specific status of Union citizenship, which carries free-movement and political rights across the Union and which, the Court held, cannot be sold without undermining the trust between member states; a national residence permit carries no such Union-wide status, and residence-by-investment programmes exist in several member states under national law. The Commission has pursued investor-citizenship schemes through infringement proceedings and investor-residence schemes through recommendations and proposed legislation, which is a different instrument with a different timetable. Families should structure Maltese plans on the assumption that due-diligence and presence requirements will tighten rather than loosen, and should avoid any arrangement whose value depends on their not doing so.

Mobility capital: what Malta is now for

In mobility-capital terms the judgment improved Malta as a jurisdiction while removing its most marketed product. The citizenship scheme produced no knowledge or cognitive return and an opportunity return disproportionate to any activity; the Court's objection was, in substance, that the status bore no relationship to anything the applicant had done. What remains rewards activity: a Maltese start-up approved by Malta Enterprise, a Maltese company with resident management, children in Maltese schools, a principal who is genuinely present. For a family enterprise from Asia or the UK, Malta is now an EU residential and corporate base whose value is proportionate to use. That is a narrower offer than before, and a more durable one.