The Vanishing Path to EU Citizenship, doomed future for Malta Golden Passport

Over the years, Europe’s Citizenship by Investment (CBI) and Residency by Investment (RBI) programs have gathered considerable attention. According to official statistics, over 13,000 individuals have successfully obtained citizenship or residency rights through these two programs, with investments totaling a staggering amount of €214 billion.

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The CBI and RBI programs have long been under multiple pressures

The highly sought-after “golden programs” have not only catered to global high-net-worth individuals but have also caused numerous issues. Since 2014, the European Parliament has consistently opposed to the CBI and RBI programs, repeatedly calling for their termination. In August 2020, Al Jazeera’s “Cyprus Papers” further fueled the European Parliament’s efforts to shut down both programs. In October 2020, the European Commission formally issued notices to Malta and Cyprus, demanding the termination of the two programs. In November, following the suspension of the Cyprus Citizenship by Investment Program, Malta introduced new policies based on constructive feedback. In October 2021, the European Parliament released a 159-page study report on EU citizenship investment programs, primarily aimed at examining the “legal framework for the EU’s response to investment migration projects,” exerting further pressure.

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Proposal by the European Parliament to “Terminate CBI and RBI Programs by 2025”

The pressure from the European Parliament on the CBI and RBI programs has never ceased. One of the most significant developments in recent years occurred on March 9, 2022, when the European Parliament overwhelmingly passed a proposal from Dutch Member of Parliament Sophie Int’ Veld to terminate all Citizenship by Investment (CBI) and Residency by Investment (RBI) programs by 2025.

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The proposal primarily focuses on the serious security risks posed by the CBI and RBI programs, such as corruption and bribery fostered by large capital investments. The lack of common standards and unified management has also been cited as causing disruptions to the free movement of people within the Schengen Area, thus undermining the integrity of the European Union. Furthermore, a majority of European Parliament members believe that the identity of “EU citizen” itself carries unique significance, serving as a complement to their national citizenship and as a crucial achievement of EU integration. It grants all EU citizens equal and distinctive rights. However, the CBI programs allow third-country nationals to quickly acquire this unique identity through investment, thereby undermining the nature of EU citizenship. Subsequently, on September 29, 2022, the European Commission decided to refer Malta’s Investor Citizenship Scheme (also known as the “Golden Passport”) to the Court of Justice of the European Union. The European Commission argues that granting Maltese EU citizenship to foreign nationals through an investment of approximately €1 million does not align with the concept of EU citizenship outlined in the Treaty on the Functioning of the European Union.

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The Maltese Government‘s Determination to Defend Citizenship by Investment Program

In March 2022, the Maltese government announced the suspension of applications from Russian and Belarusian citizens. However, it explicitly stated that it had no intention of terminating the program. Faced with frequent pressure from the European Union, the Maltese government swiftly responded, emphasizing that the Citizenship by Investment program is a national prerogative of Malta as an EU member state. It asserted that the legitimate right to grant citizenship should not be subject to external interference or changes. Despite pressure from the European Parliament, the Maltese government remains steadfast in defending the legality of its Citizenship by Investment program. The government expressed its willingness to defend the Maltese citizenship program in the Court of Justice of the European Union if necessary. “Malta is willing to pursue all legal avenues to ensure that nationality and citizenship remain within the jurisdiction of member states. Even if the case is brought before the European Court, Malta will defend this position firmly and reaffirm that citizenship is a national prerogative of member states.”

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Future European Immigration Policies to Remain Tightened

While proposals passed by the European Parliament do not carry mandatory enforcement, it is undeniable that they wield significant influence over the direction of international policies. As stated by Simon Harris, the Irish Minister for Justice, reports and investigations provided by international organizations such as the European Commission and the OECD had a significant impact on the suspension of Ireland’s investment migration program in February 2023. Similarly, in April 2022, Bulgaria halted its Golden Passport program, followed by Greece raising the minimum investment for real estate residency in certain areas to €500,000 in August 2023. Portugal modified its Golden Visa scheme in October 2023, while the Netherlands terminated its Golden Visa program in January 2024. All these instances illustrate the determination and influence of the European Parliament regarding the cessation of various countries’ CBI and RBI programs, hinting at the continued tightening of future policies.

By February 28, 2024, the European Parliament overwhelmingly passed a draft anti-corruption directive proposed by the European Commission, including a proposal for a comprehensive ban on citizenship and residency obtained through investment schemes such as those in Malta. The European Parliament called upon EU member states to take action to prevent erosion of EU values. MEP Sophie Int Veld expressed concerns in the parliament about the rule of law in several EU countries, including Malta, advocating for a complete ban on citizenship and residency obtained through investment schemes. Given recent serious corruption scandals leading to the suspension of investment citizenship programs in Cyprus and Bulgaria, Malta, as the only remaining EU country offering citizenship through investment, became the focal point of the anti-corruption directive. Consequently, Malta’s Citizenship by Investment program faced another warning of termination.

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The Last “Lone Star” Malta, Likely to Shut Down Before 2025

As of now, the Maltese government has not publicly responded. If indeed Malta’s Citizenship by Investment program shuts down by 2025, will it affect applicants who are currently preparing or in the process of applying? We can refer to the practices of the Maltese Immigration Authority under the previous policy: the old policy was announced to be shut down in June 2020, and the Immigration Authority provided a two-month period for applicants to land and apply for an E-card. As long as applicants applied and fingerprinted before July 31, they were considered to have secured a quota under the previous policy. There are also numerous cases where clients under the previous policy continued their applications after the introduction of the current policy and eventually successfully obtained citizenship. Therefore, even if the program shuts down, based on past practices of the Immigration Authority, we have reason to believe that clients who entered the pipeline before the shutdown will likely not be affected.

Meanwhile, Globevisa’s Malta Citizenship by Investment Program Team immediately communicated with Maltese lawyers. However, staff members stated that the number of applicants this year has significantly increased compared to previous years, indicating that more and more people hope to catch the final chance before the Citizenship by Investment program may close in 2025. Therefore, for applicants eager to obtain EU citizenship, taking early action and seizing the opportunity to register biometrics becomes crucial. The reminder from lawyers also makes people realize the importance of applying early, speeding up the application process, and avoiding the impact of policy changes before the program closes.

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Globevisa: A Professional Service Provider with High Accumulated Experience

Globevisa’s Malta Citizenship by Investment Program has been in operation since the enactment of the Malta Citizenship Act. Since 2015, we have successfully assisted numerous high-net-worth families in obtaining citizenship, boasting years of operational experience and a wealth of satisfied cases. Our extensive case archive includes successful applications from various international locations such as the United States, the United Kingdom, Hong Kong, Spain, Canada, Australia, Saint Kitts and Nevis, Vanuatu and China. With our high level of accumulated experience, we provide comprehensive support throughout the entire application process, including post-passport services. To date, with our assistance, several applicants under the old policy have successfully completed post-citizenship matters such as lease termination, bond redemption, and passport renewal, ensuring applicants have peace of mind when choosing Globevisa.

Regarding the previous policy: The previous policy application period spans from 2014 to 2020 having the largest proportion of the 1800 global citizenship applications. From officially disclosed data, the Asian region indicates a total of 381 applications, with no specific data available for applications from China. Globevisa handled approximately 150 applications under the previous policy, representing 40% of the Asian market share.

The current policy, which comes into effect since November 2020, has not had its application numbers officially disclosed. Globevisa’s clients were the first to land in Malta in July 2021 and successfully obtained residency cards in August 2021. As of now, Globevisa has assisted hundreds of clients under the current policy, with over 50 applications already submitted.

References:

https://www.europarl.europa.eu/doceo/document/TA-9-2022-0065_EN.html

https://www.aljazeera.com/news/2020/8/23/exclusive-cyprus-sold-passports-to-criminals-and-fugitives

https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1925

https://malta.representation.ec.europa.eu/news/golden-passport-schemes-commission-proceeds-infringement-case-against-malta-2022-04-06_en

https://www.europarl.europa.eu/thinktank/en/document/EPRS_STU(2021)694217

https://timesofmalta.com/articles/view/european-parliament-overwhelmingly-votes-for-ban-on-golden-passport.940182

https://oeil.secure.europarl.europa.eu/oeil/popups/summary.do?id=1696813&t=e&l=en

https://ec.europa.eu/commission/presscorner/detail/en/ip_22_5422

https://www.gov.mt/en/Government/DOI/Press%20Releases/Pages/2022/03/02/pr220287.aspx

https://timesofmalta.com/articles/view/eu-insists-sale-of-passports-must-stop-malta-says-it-is-a-national.946483

https://www.europarl.europa.eu/news/en/press-room/20240223IPR18084/parliament-calls-for-action-against-the-erosion-of-eu-values-in-member-states