On 29 April 2024, the Court of Justice of the European Union (CJEU) issued a landmark ruling in Case C-181/23, declaring that Malta’s Individual Investor Programme (IIP)—commonly referred to as the “golden passport” scheme—violates EU law. This decision marks a critical turning point in the EU’s campaign to prevent the commodification of citizenship and uphold the supremacy of EU law over national schemes that risk undermining collective European values.
National Competence vs. EU Obligations
While nationality law remains under the exclusive competence of Member States (Article 4(2) TEU), the acquisition of nationality in any one state automatically grants EU citizenship (Article 20 TFEU), including key rights such as free movement, consular protection, and non-discrimination.
The European Commission argued, and the Court accepted, that Malta’s golden passport program enabled individuals to obtain EU citizenship rights without creating any genuine connection to Malta. In the Court’s view, this practice breached the principle of sincere cooperation between Member States (Article 4(3) TEU) and weakened the foundation of mutual trust across the Union.
In short: while Malta may define its nationality criteria, it cannot use that competence to bypass EU law by granting citizenship purely on the basis of financial contributions, with no requirement for residency, integration, or cultural connection.
Citizenship is Not for Sale
The ruling firmly rejects the commercialization of EU citizenship. The CJEU emphasized that EU citizenship is not a tradable commodity and should not be reduced to a product available for purchase.
Beyond legal principles, the Court highlighted how such schemes create risks to the Union, including money laundering, corruption, security threats, and tax evasion. The judgment reiterates that EU citizenship must reflect shared values and integration, not market-based transactions.
Impact on Malta and the Investment Migration Industry
The Maltese government has indicated that it will comply with the judgment, effectively ending one of the EU’s most scrutinized investment migration programs. While Malta’s IIP generated over €1.4 billion and maintained high due diligence standards, the Court ruled that its structure violated the spirit and letter of EU law.
Industry stakeholders—including firms like Henley & Partners—have expressed concern, warning that the decision undermines national sovereignty and disregards the role of citizenship-by-investment in a globalized economy. Nonetheless, the message from Luxembourg is clear: EU citizenship must not be monetized.
Hungary’s Guest Investor Program: A Compliant and Increasingly Strategic Alternative
Crucially, the ruling does not affect residency-by-investment schemes—commonly known as golden visa programs—so long as they adhere to EU law and traditional immigration frameworks. This distinction carves out space for legitimate investment migration pathways within the Union.
One such program, launched in 2024, is Hungary’s Guest Investor Program (GIP). Unlike Malta’s IIP, the Hungarian program does not confer immediate citizenship but instead offers a 10-year residency permit to third-country nationals and their families in exchange for investments starting at €250,000. Options include subscribing to real estate funds or making a €1 million donation to Hungarian higher education institutions operated by public-interest foundations.
Hungary’s GIP is legally sound, transparent, and well-aligned with EU principles. Importantly, even independently of the CJEU’s ruling, it represents a compelling, long-term route for individuals seeking European access through investment. But in the aftermath of the Malta judgment, the strategic significance of Hungary’s GIP has only grown—now one of the few robust, EU-compatible channels remaining for investors.
With no shortcuts to citizenship and a structured residency pathway, the Hungarian model reflects a balanced, credible approach: it respects national sovereignty while staying within the EU legal framework. For many high-net-worth individuals, it may now become the gold standard for golden visas in Europe.
Conclusion: A Turning Point for EU Citizenship, A Rising Opportunity for Hugary
With this ruling, the EU has drawn a legal and moral boundary: citizenship must be rooted in genuine ties—not in transactional payments. While Malta’s IIP is consigned to history, the path remains open for residency-based programs that honor both national prerogatives and Union values.
Hungary’s Guest Investor Program emerges not just as a lawful alternative, but as a leading solution in the post-Malta era—offering investors a reliable, strategic entry point to the European Union without compromising the integrity of citizenship.
