The Government of Malta and Henley & Partners are among those who have responded to the European Court of Justice Ruling on Malta’s Citizenship Program.

Henley & Partners said it was "disappointed by the characterization of Malta’s citizenship program as an infringement of EU law or a 'commercialization' of citizenship".

In what it described as a "highly politicalised judgment" on 29 April, Henley & Partners said this ruling marked the conclusion of a case brought by the European Commission in March 2023.

"This case alleged that Malta’s citizenship by investment program violated the principle of sincere cooperation (a vague principle in EU law) and supposedly undermined the integrity of EU citizenship.

"However, the EU Commission’s, and now the ECJ’s reasoning, lacks a solid foundation in EU law, as many leading legal scholars and the Court’s own Advocate General have pointed out prior to today’s ruling.

"Indeed, there is a stark contrast to the thoughtful and legally grounded opinion of the Advocate General, the ECJ’s lead judge, who concluded that the Maltese program did not infringe EU law and that the EU Commission has no case.

"The Court has now reversed course by a staggering 180 degrees and issued a decision that appears politically motivated, as the reasoning provided by the court is tenuous at best. This undermines judicial consistency and confirms serious concerns about the increasing politicization of the EU’s legal institutions. This undermines two of the most important values of the EU itself, democratic legitimisation and rule of law."

Juerg Steffen, CEO of Henley & Partners, said: “At the heart of this case lies the principle of sovereignty and national competence in citizenship matters. Member States have the exclusive right to determine the criteria for the acquisition of their citizenship, which is clearly laid out in the EU treaties. This principle was first acknowledged but ultimately sidestepped by the ECJ in favour of a ruling that enables EU encroachment on national competence.”

The statement continued: "Even the EU itself, in its submission to the Court, explicitly stated that it does not seek to infringe on the sovereign discretion of Member States to confer citizenship. The EU just takes issue with the transparent and direct link of a specific amount of investment required — besides many other criteria needed to qualify — rather than the widely practiced and rather untransparent discretionary citizenship grants that happen in all EU countries, which the EU Commission acknowledged it does not want to touch.

"This ruling, targeting the smallest EU Member State, sets a worrying precedent for the undemocratic extension of EU competences beyond its treaty-based limits. It would be interesting to see what the outcome would have been if the case was against France or Germany. Ironically, such judicial overreach undermines the very EU values the Court claims to uphold, notably the rule of law and respect for democratic values."

Henley & Partners further said the portrayal of citizenship by investment as commercialization was "fundamentally flawed".

"Investment migration is a legitimate, internationally recognized policy instrument used by sovereign states to responsibly attract global capital. Malta’s program is underpinned by the strictest due diligence, multi-tiered vetting, and stringent eligibility criteria. While the United States, Canada, UAE, Singapore and other successful countries are leading the way in attracting investors and talent with investment migration programs, the European Union prefers to go backwards.

"Investor programs that allow the acquisition of citizenship are not casual transactions — they are structured and transparent legal pathways that demand lawful conduct, economic contribution, and commitment from applicants. Describing them otherwise diminishes the integrity and purpose of such programs. Countries can derive significant economic and social benefits from such well-structured programs, including Malta and by extension the European Union. It is a great pity that the ECJ has found that the European Union does not want its member states to attract talent and investors through such means."

Malta’s program in perspective

The current scrutiny of Malta’s program and the decision of the ECJ must also be viewed in the greater context. In 2023 alone, EU Member States collectively granted over 1.1 million citizenships —and often based on tenuous links to the granting country, such as a remote ancestry connection, without any current connection to the country granting citizenship and no other formal requirements, whether investments or residence time or other requirements. Moreover, among the largest recipients of EU citizenship are nationals from high-risk jurisdictions such as Morocco and Syria, with over 100,000 citizenships granted to individuals from each of these countries.

Against this backdrop, the few hundred citizenships granted annually by Malta, under the most stringent security and background checks, hardly justify the non-factual, alarmist narrative promoted by the Commission and echoed in the ECJ’s ruling.

As the Court itself admitted, it is approaching the issue from a broad and abstract perspective — in effect, ruling essentially on a (current) political dislike in parts of the EU for the transactional nature of citizenship by investment. While we acknowledge and respect this institutional preference, the decision is nevertheless a blow to foundational European principles, with decisions, such as today’s EU Commission vs. Malta ruling by the ECJ representing a further encroachment on the core sovereign rights of member states, which will, unfortunately, have far-reaching consequences for the EU.

A call for rational dialogue

Henley & Partners said it remained steadfast in its commitment to supporting investment migration programs that are governed by rigorous compliance, transparent processes, and social responsibility. Working on a global scale, we also see that these programs will continue to expand worldwide. Investment migration programs, when well-structured and properly run, serve as a bridge between global capital and talent, and national development goals.

Christian H. Kälin, chairman of Henley & Partners emphasizes that “the idea that investment migration undermines solidarity within the EU is not only unfounded but reflects a troubling misunderstanding of the socio-economic role these programs play. Malta’s framework exemplifies responsible nation-building — not opportunism.

"There are countless and major historic examples in Europe and elsewhere in the world. Rather than rejecting investment migration, the EU should focus on enhancing due diligence and harmonizing regulatory oversight, to attract the right people to the Union who contribute significantly and bring private investment, talent and entrepreneurship, which is urgently needed in Europe.”

The statement concluded: "The EU will continue to be an attractive place of residence and citizenship. However, even more specialized legal advice will be needed if open and well-structured citizenship programs such as the one in Malta are no longer available in the EU. For example, the combination of residence rights in the EU and citizenship in third countries is likely to be increasingly sought out as a solution by wealthy families advised by Henley & Partners."

The judgement by the ECJ

In the official statement on the Judgment of the Court in Case C-181/23 | Commission v Malta (Citizenship by investment) by the ECJ, it said "the acquisition of Union citizenship cannot result from a commercial transaction".

"While the definition of the conditions for granting and losing the nationality of a Member State is a matter of
national competence, that competence must be exercised consistently with EU law. The bond of nationality with a
Member State is based on a specific relationship of solidarity, good faith and the reciprocity of rights and duties
between the State and its citizens.

"Where a Member State grants nationality, and thus automatically Union citizenship, in direct exchange for predetermined investments or payments through a transactional procedure, it manifestly infringes those principles.

"Such ‘commercialisation’ of citizenship is incompatible with the basic concept of Union citizenship as defined by the Treaties. It infringes the principle of sincere cooperation and jeopardises the mutual trust between Member States concerning the grant of their nationality, which governed the establishment of Union citizenship in the Treaties."

Government of Malta response

In a separate statement the Government of Malta it said "as always it respects the decisions of the courts, while at this moment the legal implications of this judgment are being studied in detail, so that the regulatory framework on citizenship can then be brought in line with the principles outlined in the judgment".

"Since October 2020, when the European Commission initiated the infringement proceedings that led to this case before the Court of Justice of the European Union, the Maltese Government has consistently expressed its firm intention to defend this framework. This position was adopted particularly because issues related to citizenship fall entirely within the national sphere of competence. This stance has remained consistent for the past four and a half years. It should be noted that this principle was confirmed by the opinion of Advocate General Anthony Michael Collins, published on 4 October 2024, who also concluded that there was no case against Malta.

"The Maltese Government notes that although the Court confirmed the principle of national competence, it ignored the Advocate General’s recommendation that there was no case against Malta and instead delved into other aspects. It is important to clarify that decisions taken under both the current and the previous legislative framework remain valid.

"The Government of Malta takes pride in the wealth generated through this framework over recent years, which enabled the establishment of a national fund for investment and savings to address the needs of both present and future generations. The Government remains committed to continuing to attract the best investment, from which the Maltese and Gozitan people benefit.

"The Government recalls that, since its inception in 2015, this legislative framework has directly generated over €1.4 billion in revenue for Malta. These funds have always been divided between the National Development and Social Fund (NDSF), through which several beneficial projects and investments were and continue to be carried out, and the Consolidated Fund. During the COVID-19 pandemic, the percentage of contributions allocated to the Consolidated Fund was increased.

"Through the NDSF, significant investments were made in key sectors to improve the quality of life for the Maltese and Gozitan people. More than €60 million were allocated to social housing projects, providing hundreds of social housing apartments that have offered a more dignified life to thousands of individuals.

"Other socially focused projects included the guarantee scheme under New Hope, created for individuals who, due to illness or medical conditions, were unable to secure a home loan from banks; the investment in St Michael Hospice, a state-of-the-art palliative care project, where €8.5 million were allocated; and an additional €5 million invested in the Puttinu Cares apartments in London. Important projects operated by Caritas were also supported.

"In the healthcare sector, a €10 million investment programme was launched to strengthen health centres across the country, while several million euros were invested in new equipment at St Vincent De Paul and in the cardiology department at Mater Dei Hospital.

"Strategic investments were also made in the sports sector, both in athletes and infrastructure. Thanks to €5 million invested in athletes participating in the Games of the Small States of Europe, Malta won the games for the first time in history in 2023. Over €13 million were allocated to the construction of a car racing track, where works have commenced, and a €9 million agreement was reached with the Malta Football Association for a new technical centre, which is now nearly complete.

"Investments were also made in greening projects and numerous restoration initiatives to safeguard the national heritage. This is only a portion of the wealth and the many beneficial projects generated by this programme.

"Additionally, the framework generated €339 million from property purchases, €158 million from property rentals, and €236 million were invested in bond acquisitions. Applicants also contributed over €10 million in direct philanthropic donations to voluntary organisations across the country.

"Malta was not the only Member State operating similar frameworks, The Government calls for national unity in the steps that must now follow this judgment and everyone should rise above partisanship in favour of the national interest including the Opposition, which did its utmost to cause maximum damage, particularly at the European level, and to undermine our country’s framework even during the period in which the Maltese Government was defending the national interest in this case before the European Court over the past years."