The European Commission has issued letters to Malta and Cyprus, marking the beginning of infringement proceedings against the two Member States for their investor citizenship schemes, or ‘golden visa’ schemes.
EU legislators have not felt as if golden visa schemes uphold European values, as schemes such as these only require that a person invests money into the host country in exchange for citizenship. In turn, these investors will receive all of the privileges and rights associated with being a citizen of a Member State.
“Due to the nature of EU citizenship, such schemes have implications for the Union as a whole. When a Member State awards nationality, the person concerned automatically becomes an EU citizen and enjoys all rights linked to this status, such as the right to move, reside and work freely within the EU, or the right to vote in municipal elections as well as elections to the European Parliament. As a consequence, the effects of investor citizenship schemes are neither limited to the Member States operating them, nor are they neutral with regard to other Member States and the EU as a whole,” reads the announcement of formal proceedings against Malta and Cyprus.
In addition, the Commission has determined that a person essentially buying their citizenship in the EU without having any link to the union undermines the ideology of what it means to be a citizen of the EU.
“The Commission considers that the granting of EU citizenship for pre-determined payments or investments without any genuine link with the Member States concerned, undermines the essence of EU citizenship,” the announcement reads.
Golden visa schemes allow for a person to invest a large pre-set sum of money into the host country, following predetermined investment routes, in return for citizenship in the host country. Other schemes might allow only for residence permits, which only permit a person to live in the host country, while still not being allowed to become a citizen.
Concerns surrounding golden visa schemes laid out by the Commission include security, money laundering, tax evasion, and corruption.
The Commission adopted a resolution on 10 July 2020 asking Member States to phase out all golden visa schemes as soon as possible, however, Malta and Cyprus have still not yet responded, causing formal action to be taken against the countries.
Bulgaria has been on the Commission’s watch list for some time, as the country has also received a letter of formal notice and not responded.
The European Commission will decide on further action in the coming weeks and months.