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Henley & Partners welcomes the opinion expressed by the Advocate General, who has come out firmly and clearly in favor of the right for Malta (and other EU member states) “to determine who is entitled to be one of their nationals and, as a consequence, who is an EU citizen”.
The landmark case was brought by the European Commission, which challenged Malta’s Granting of Citizenship for Exceptional Services by Direct Investment Regulations (S.L. 188.06), which allow for the granting of citizenship by a certificate of naturalization to foreign individuals and their families who contribute to the country’s economic development.
The Commission argued that the regulations violated the principle of sincere cooperation and compromised EU citizenship by granting it without a “genuine link” between the applicant and the country. However, Malta has consistently argued that there is no legal requirement for such a link under EU law, and yesterday, the Advocate General agreed, confirming that “the Commission has failed to prove that EU rules on citizenship (Article 20 TFEU) require that a ‘genuine link’ or ‘prior genuine link’ between a Member State and an individual must exist in order for it to grant citizenship”.
He added that under EU law, member states had agreed that their “respective conceptions of nationality touch on the very essence of their sovereignty and national identity, which they do not intend to pool. It follows that the Member States have decided that it is for each of them alone to determine who is entitled to be one of their nationals and, as a consequence, who is an EU citizen.”
Citizenship a matter of national sovereignty
Dr. Christian H. Kaelin, Chairman of Henley & Partners, says this court case has important implications. “Its significance goes well beyond the niche of investment migration, which only accounts for 200 to 300 cases in Malta annually, compared to the 700,000 citizenships granted across the EU without investment each year. The fundamental question centers on EU competences and the European Commission’s approach towards member states on a core sovereign matter: the right to control national citizenship.”
He added that the case directly addresses the balance of power between national sovereignty and EU oversight, and the Advocate General made it clear that “the duty under EU law to recognise the nationality granted by another Member State is a mutual recognition of, and respect for, the sovereignty of each State and is not a means to undermine the exclusive competences that the Member States enjoy in this domain.”
The Advocate General went on to explain that “there is no logical basis for the contention that because Member States are obliged to recognise nationality granted by other Member States, their nationality laws must contain any particular rule. To find otherwise would upset the carefully crafted balance between national and EU citizenship in the Treaties and constitute a wholly unlawful erosion of Member States’ competence in a highly sensitive field which they have clearly decided to retain under their exclusive control”.
Socio-economic benefits of investment migration
Malta’s citizenship by naturalization process has made a substantial contribution to the country’s economy. The funds generated through this initiative, channelled through the National Development and Social Fund, have been used to support essential public services, including primary healthcare, social housing, drug rehabilitation, and grassroots sports programs.
In addition to these direct contributions, the program has attracted high-net-worth investors who bring long-term economic benefits to Malta. These individuals invest in local businesses, create jobs, and contribute to the country’s cultural and social landscape. Importantly, Malta’s framework includes post-naturalization monitoring, ensuring that recipients of citizenship maintain their commitment to Malta and continue to pose no security risks.
Dr. Kaelin says confronted with economic challenges at home and volatility in international markets, sovereign states can capitalize on the innovative financing opportunity that investment migration programs present. “Numerous small nation states have bolstered their financial independence and enhanced their sovereign equity thanks to the alternative residence and citizenship by investment programs they have introduced, reducing their public debt and their reliance on debt financing from supranational institutions, and enabling them to allocate funds to national or regional social, infrastructure, and development projects that directly benefit their citizens.”
Ends.
Notes to Editors
About Henley & Partners
Henley & Partners is the global leader in residence and citizenship by investment. Each year, hundreds of wealthy individuals and their advisors rely on our expertise and experience in this area. The firm’s highly qualified professionals work together as one team in over 55 offices worldwide.
The concept of residence and citizenship by investment was created by Henley & Partners in the 1990s. As globalization has expanded, residence and citizenship have become topics of significant interest among the increasing number of internationally mobile entrepreneurs and investors whom we proudly serve every day.
The firm also runs a leading government advisory practice that has raised more than USD 12 billion in foreign direct investment. Trusted by governments, the firm has been involved in strategic consulting and in the design, set-up, and operation of the world’s most successful residence and citizenship programs.
Media Contact
For further information, please contact:
Sarah Nicklin
Group Head of Public Relations
sarah.nicklin@henleyglobal.com
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