The ECJ Has Spoken: A Turning Point for Malta’s Exceptional Investor Naturalisation (MEIN) program

On April 29th, the European Court of Justice (ECJ) delivered a decision that marks a new milestone in the history of the investment mobility industry. With this ruling, Malta’s Exceptional Investor Naturalisation (MEIN) program has effectively reached the end of its legal road. As the highest judicial authority in the European Union, the ECJ’s decisions are final and not subject to appeal.

Though case law is not traditionally considered a direct source of law in many continental legal systems, within the European Union, ECJ rulings carry enormous interpretative authority. In fact, they often serve as a primary expression of the EU’s evolving legal and constitutional identity.

The case brought by the European Commission against Malta’s MEIN program challenged a citizenship pathway that granted nationality (and, by extension, EU citizenship) to truly exceptional third country nationals who demonstrated genuine connection through a series of requirements:

• Substantial financial contribution to Malta’s economic development of at least EUR 600,000, directly supporting infrastructure, healthcare, and education initiatives
• Meaningful philanthropic donation to registered Maltese non-governmental organizations that serve critical social needs
• Submission to arguably the world’s most comprehensive vetting system, including multi-tiered due diligence and AML processes that exceed international standards
• Completion of a minimum 12-month residency period in Malta
• Verifiable proof of physical presence and address in Malta

The cumulative effect of these rigorous requirements outlines a deliberate and selective pathway, ensuring that only genuinely exceptional individuals progress toward Maltese citizenship. As mentioned, genuine links to Malta are fostered through multiple avenues: significant financial contributions that bolster vital public services such as healthcare and education; philanthropic donations that reinforce the country’s civil society; and a meaningful period of physical residence.

Professor Dimitry Kochenov, a leading scholar in EU citizenship law, has argued for a reimagining of citizenship as a legal status, one that embraces a broader, more inclusive understanding of belonging. He calls for a framework that acknowledges diverse connections to the state, moving beyond rigid definitions rooted in ethnicity or birthplace. This vision was reflected in Malta’s MEIN program, which, in full alignment with the European Commission’s earlier recommendations, implemented a new legal and procedural framework precisely to foster genuine connections between applicants and the state.

It is also relevant to highlight that, against this evolving academic and legal backdrop, the ECJ’s ruling was particularly striking in its departure from the opinion of the Advocate General Collins, from 14th October 2024, who had clearly upheld the notion that nationality remains within the sovereign domain of Member States as the EU has no competence in this field.

It is important to approach the implementation of this ruling with perspective. The European legal order is founded on the principles of legal certainty and legitimate expectations. Individuals who engaged with the program in good faith under a lawfully established regime have rights and interests that must be considered as part of any transition.

For Malta specifically, one of the most immediate legal imperatives is the application of legal certainty and protection of legitimate expectations for individuals who applied under the MEIN program in good faith. These applicants engaged with a lawfully established regime and made significant personal and financial decisions based on the assurances and legal frameworks then in place. Accordingly, the phasing out of the MEIN scheme must include safeguards to ensure that their rights are respected in accordance with EU legal principles. This is not only a matter of fairness, but also of preserving the rule of law and trust in state institutions.

The EU and Malta must safeguard and uphold legal certainty and fundamental rights of all current applicants by:

• Protecting legitimate expectations: Applicants who submitted complete and compliant applications before the ECJ ruling could be allowed to complete the process under the previous legal framework. This respects the principle of legitimate expectations, as these individuals acted in good faith under a lawful system. ECJ case law has repeatedly upheld the right of individuals to rely on legal regimes that were valid at the time of their actions (e.g., Joined Cases C-110/03, C-147/03, Belgium v. Commission).
• Implementing a Transitional Period with Clear Legal Guarantees: Implement a formally defined transitional phase, during which the MEIN scheme is phased out but pending cases are processed under clearly defined and publicly communicated rules. (Art. 41 of CFR on the right of good administration).

Failing to implement safeguards that uphold legal certainty and fundamental rights during the phase-out of the MEIN program risks violating core principles of EU law, with potentially severe legal and reputational consequences. In particular, denying applicants the right to be heard or access to legal remedies would contravene Articles 41 and 47 of the Charter of Fundamental Rights of the European Union (CFR), which guarantee due process and effective judicial protection.

Similarly, failing to provide compensation or restitution to those who invested under a lawfully established regime could breach the principle of proportionality, as recognized in ECJ case law (e.g., Case C-201/08, Plantanol). Blanket rejections without individualized legal assessments would undermine the principles of fairness and non-discrimination, while the absence of parliamentary or judicial oversight would raise serious concerns regarding transparency and the rule of law, enshrined in Article 2 TEU.

Alternatively, Malta could adopt the bold course of action of pronouncing the ECJ’s judgment ultra vires (meaning that the Court has acted beyond its legal authority). In doing so, Malta would assert that, under the foundational treaties of the European Union, decisions concerning the acquisition and loss of nationality remain an exclusive domain of Member State sovereignty, shielded from supranational intervention. In doing so, Malta would not only challenge the immediate legal effect of the judgment but also defend the constitutional balance established within the EU framework. Such a declaration would signal that Malta does not recognize the Court’s authority to dictate nationality matters and would seek to preserve its sovereign prerogative. However, this move would inevitably trigger infringement proceedings and reputational costs, while also buying valuable time for domestic political and legal maneuvering.

It’s important to note that the Malta Permanent Residence Programme (MPRP) remains entirely unaffected by the ECJ’s ruling. Unlike the MEIN program, the MPRP grants only permanent residency status and therefore operates within a different legal framework that continues to be available. While residency programs across the EU face increasing regulatory scrutiny to ensure alignment with European security protocols and core values, they remain legitimate and distinct legal pathways that fall squarely within member states’ sovereign competencies regarding residency rights.

In response to the recent judgment by the ECJ,  the Government of Malta issued a declaration reaffirming its respect for the authority of the courts while emphasizing that it is currently undertaking a detailed analysis of the legal implications of the ruling. This assessment will guide the necessary adjustments to Malta’s citizenship regulatory framework to ensure alignment with the Court’s findings. The Government reiterated its long-standing position that citizenship policy falls squarely within national competence, a stance also supported by Advocate General Anthony Michael Collins in his 2024 opinion, which recommended dismissal of the case. Despite the Court confirming the principle of national competence, Malta expressed concern that the judgment diverged from the Advocate General’s conclusions by engaging with issues outside the core legal dispute. The Government underscored that all decisions taken under both current and previous frameworks remain valid. It also defended the program’s record, highlighting over €1.4 billion in revenue and investments in social housing, healthcare, education, and national development. Looking ahead, Malta called for national unity and stressed that the process of adapting to the ruling will be conducted in the national interest, with a focus on safeguarding the benefits delivered by the program while navigating the legal transition responsibly.

The significance of this decision stretches beyond Malta or any single program. It touches upon two foundational questions at the heart of the European project: the limits of national sovereignty and the emergence of a functional federalism.

1. A Quiet Federalism and the Principle of Mutual Trust

The decision reflects a subtle yet powerful shift toward federal reasoning in EU law. While the EU remains far from a federal state, the ECJ’s insistence on mutual trust (the idea that all member states must be confident in each other’s adherence to common legal standards) introduces a kind of soft federalism. When one country’s citizenship policy affects the rights of citizens across the EU, the Union has both the legitimacy and responsibility to intervene.

2. State sovereignty violation

The current proceedings involving the ECJ and Malta’s MEIN are drawing close attention for their potential impact on the evolving relationship between EU law and Member State sovereignty. The case touches on a sensitive and complex area: nationality, which has long been understood as a core national competence, deeply tied to the sovereign right of states to define their own citizenry.

The ECJ’s approach in the MEIN case represents a deeply problematic expansion of supranational authority into a legal domain long held as sacrosanct: the sovereign right of states to determine their own nationals. By subjecting Malta’s citizenship decisions to Union-level scrutiny, the Court has effectively disregarded decades of legal doctrine and jurisprudence that position nationality as a matter of exclusive national competence.

This move not only contradicts its own precedents in Micheletti and Rottmann, where Member States’ authority over nationality was preserved, but also undermines the foundational principle articulated in the Nottebohm ruling by the ICJ and echoed by the ECHR in Slivenko, affirming that nationality falls within the domestic jurisdiction of states. The ECJ’s reasoning appears to hinge on the functional spillover of national citizenship into EU citizenship, but this logic dangerously conflates consequence with competence.

The mere fact that national decisions have European effects does not automatically justify European interference, particularly when such interference reshapes the distribution of sovereign powers without treaty reform or democratic mandate. In this ruling, the Court not only stretched the principle of mutual trust beyond its intended bounds but also disregarded the fundamental tenets of legal certainty and proportionality.

Most troubling is the precedent this sets: if the Union can now police the internal citizenship regimes of its members, what remains of their constitutional autonomy? Rather than reinforcing integration through law, the ECJ risks destabilizing it by eroding trust in the limits of Union competence, weakening the constitutional equilibrium between the EU and its Member States.

At the core of Malta’s MEIN program was a deliberate and carefully constructed framework that sought to establish genuine connections between program candidates and the Maltese state. Through substantial economic contributions, philanthropic involvement, and residency requirements, the program was designed to transform economic investment into civic engagement, aligning with evolving academic thought on citizenship as a status rooted in belonging rather than birth or bloodline.

Yet, the ECJ’s decision took a fundamentally different direction, departing from the Advocate General’s opinion and overriding long-standing legal doctrine that views nationality as a core expression of state sovereignty. By asserting the Union’s right to intervene in Malta’s citizenship decisions, the Court set a precedent that challenges the constitutional division between national and supranational competences. While the EU has a legitimate interest in safeguarding the integrity of Union citizenship, this ruling blurs the legal boundaries and opens the door to broader federal intervention in traditionally sovereign domains.

Most pressing, however, is the need to uphold the principles of legal certainty, legitimate expectations, and fundamental rights during the dismantling of the MEIN program. Individuals who applied in good faith under a lawfully established regime must not suffer collateral damage in an evolving legal order. Failure to implement key safeguards, such as transitional measures, individualized assessments, the right to be heard, and compensation mechanisms, would not only violate the Charter of Fundamental Rights of the EU, but also risk undermining trust in both national and EU institutions.