What the heck is a golden passport?

Aside from breathtaking views, the small Mediterranean island of Malta offers a unique opportunity to the ultra-wealthy: investment citizenship.

• For a hefty fee, people can become citizens of the country and procure a Maltese passport, one of several “golden passports” that allow visa-free travel throughout Europe.

The European Union isn’t a fan, and recently took Malta to court over the controversial program.

The golden passport…

… starts at $677.8k (€690k), not including background checks and legal fees. Since 2013, Malta has raised $1B (€1.1B) through the scheme.

EU officials claim the practice breaks EU law and poses multiple problems, including:

• Security risks: An investigation into a similar program in Cyprus found 30 applicants from 2017 to 2019 were under criminal investigation.
• Ethical concerns: In the words of one EU official, “Citizenship is a right, not a commodity to be bought and sold.”

While it’s easy to imagine international criminals flocking to the program, most applicants are just looking for an easier way to travel, according to Dr. Kristin Surak, a professor at the London School of Economics.

Even if the EU wins…

… Malta has other options to lure investments from rich travelers.

Take Portugal, which offers a residence visa that allows non-Europeans to pay ~$200k for the right to live, work, and study in the country, and travel visa-free to most EU countries for five years, after which they can apply for full citizenship.

The country’s “golden visa” has raised ~$6B since 2012.