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For decades, citizenship-by-investment (CBI) programs have provided qualifying individuals and families with a relatively straightforward way to obtain a second citizenship through a defined economic contribution. These programs have become an important part of international mobility and wealth planning, particularly for high-net-worth and internationally mobile families.
However, the regulatory environment surrounding citizenship-by-investment has changed significantly in recent years.
Governments are facing greater scrutiny over the way citizenship is granted, particularly where citizenship can be obtained without a substantial connection to the country. At the same time, international organizations and neighboring countries have become increasingly focused on due diligence, security, transparency, and the integrity of passports issued through investment programs.
Against this backdrop, a different concept has begun receiving greater attention: citizenship by merit.
But what exactly does citizenship by merit mean, and why are jurisdictions increasingly considering this type of framework?
Citizenship by merit is generally understood as a discretionary form of naturalization in which an individual’s overall contribution, achievements, circumstances, or potential value to the country are considered rather than citizenship being granted solely because the applicant has completed a prescribed investment.
The distinction is important.
A traditional citizenship-by-investment program generally establishes a defined legal framework. An applicant who satisfies the eligibility requirements, completes the required investment or contribution, passes the applicable due diligence process, and meets the other conditions can qualify for citizenship.
Citizenship by merit operates differently.
Rather than creating a simple transaction in which a specified investment leads to citizenship, the state retains greater discretion to determine whether a particular individual has demonstrated sufficient merit to justify the granting of citizenship.
The concept can encompass individuals who have made, or are expected to make, exceptional contributions in areas such as:
The precise criteria vary by jurisdiction, and citizenship by merit should therefore not be treated as a standardized global program.
Malta provides one of the clearest current examples. Under its Citizenship by Naturalization on the Basis of Merit framework, an individual may be considered where they have rendered exceptional service to Malta or humanity, made an exceptional contribution, or are of exceptional interest to Malta. The process is expressly discretionary and conducted on a case-by-case basis, with due diligence and vetting forming part of the assessment.
This is fundamentally different from a system in which citizenship follows automatically from completing a prescribed investment.
The move toward merit-based citizenship reflects a broader evolution in how governments view investment migration.
The central question is increasingly no longer simply:
“How much money will this applicant contribute?”
Instead, governments are asking:
“Why should this particular individual become a citizen of our country?”
That distinction is becoming increasingly important.
Citizenship is fundamentally different from residence.
A residence permit generally gives an individual permission to live in a country. Citizenship, by contrast, creates a permanent legal relationship with the state and can provide political rights, access to public institutions, and the ability to pass citizenship to future generations.
Because of this, governments have greater political and constitutional sensitivity around the granting of citizenship.
Citizenship by merit allows governments to preserve the ability to attract internationally successful individuals while moving away from the perception that nationality is simply an asset that can be purchased.
The Changing Regulatory Environment
The growth of citizenship-by-investment programs has inevitably attracted increased international scrutiny.
The European Union has been particularly active in examining citizenship programs and the consequences of one country granting citizenship that may provide rights throughout a wider regional bloc.
The most significant development came in April 2025, when the Court of Justice of the European Union ruled in Commission v Malta (C-181/23) that Malta’s former investor citizenship scheme was contrary to EU law.
The Court emphasized that EU citizenship is based on a special relationship between a Member State and its citizens and on mutual trust between Member States. It found that granting nationality primarily in exchange for predetermined payments or investments, without requiring a genuine relationship between the applicant and the state, was incompatible with the nature of EU citizenship.
The decision is particularly important because it goes beyond questions of due diligence.
The issue was not simply whether applicants were properly screened.
The Court’s concern was fundamentally about the nature of citizenship itself and whether nationality could be granted through what it regarded as a transactional process.
That distinction may prove highly influential in the future development of investment migration.
One of the principal attractions of a merit-based framework for governments is that it provides a different policy narrative.
A traditional CBI program can be characterized by critics as:
“Give the government money and receive a passport.”
That description oversimplifies the legal, regulatory, and due diligence requirements of many programs, but it is nevertheless an effective political criticism.
A merit-based system is fundamentally different in its framing.
The government is not necessarily saying:
“Invest X and receive citizenship.”
Instead, it is saying:
“The state has the discretion to recognize individuals whose achievements, contributions, or circumstances are considered sufficiently valuable to justify citizenship.”
That distinction can be important when governments are attempting to balance economic interests with concerns about national identity, sovereignty, and public confidence.
It also gives governments greater flexibility.
If an applicant is financially successful but has no meaningful contribution beyond the required investment, a discretionary system can allow the government to decline the application.
Conversely, an entrepreneur, scientist, philanthropist, athlete, or internationally recognized professional may be considered valuable even if their contribution does not fit neatly into a standardized investment category.
Not necessarily.
The emergence of citizenship by merit does not mean that structured citizenship-by-investment programs are disappearing everywhere.
Investment migration remains economically important to a number of jurisdictions, particularly smaller countries where foreign investment can provide significant capital for national development.
The Caribbean programs are an example of jurisdictions that have responded to international scrutiny by strengthening due diligence, increasing information sharing, standardizing procedures, and implementing other reforms designed to improve the credibility and sustainability of their programs.
The more likely development is that the industry will become more differentiated.
Some jurisdictions may continue to operate structured CBI programs with clearly defined investment requirements.
Others may place greater emphasis on residence and genuine connection before citizenship.
And some may increasingly use discretionary or merit-based frameworks to attract individuals who can demonstrate exceptional value to the country.
In other words, the future of investment migration may not be about choosing between “investment” and “merit.”
It may involve different jurisdictions using different combinations of investment, residence, connection, and contribution.
The difference between citizenship by investment and citizenship by merit may initially appear semantic.
It is not.
Under a traditional CBI model, the applicant’s financial contribution is generally a central and objectively defined component of eligibility.
Under a merit-based model, the applicant’s individual characteristics and contribution to the country become central to the decision.
That can include achievements that have already occurred as well as future contributions that an applicant intends to make.
Malta’s current framework illustrates this distinction. Applicants are required to submit a detailed proposal describing their background and achievements, their exceptional service or contribution, and a forward-looking plan explaining how they intend to continue contributing after naturalization. The proposal is then subject to evaluation, verification, assessment, and due diligence before a final discretionary decision.
This is a very different process from simply demonstrating that a particular investment has been completed.
The development of citizenship by merit should also be viewed within the broader maturation of the RCBI industry.
Investment migration has become increasingly sophisticated.
Today’s internationally mobile families are often considering far more than the amount required to obtain a passport or residence permit.
They may be evaluating:
Governments are similarly looking beyond the immediate financial contribution of an applicant.
They increasingly want to attract people who can contribute to the economy, create employment, build businesses, support communities, enhance the country’s international reputation, or otherwise provide long-term value.
This represents a significant conceptual shift.
The question is no longer simply whether an applicant can contribute capital.
It is whether the applicant can contribute value.
The emergence of citizenship by merit does not mean that every wealthy investor will suddenly be expected to demonstrate extraordinary achievements.
Nor does it mean that every CBI program will evolve into a discretionary merit-based system.
Different jurisdictions have different economic realities, political priorities, and legal frameworks.
However, the direction of travel is becoming clearer.
International scrutiny is encouraging governments to think more carefully about why citizenship is being granted, not simply whether an applicant has met a financial threshold.
For some countries, the answer may continue to be a structured investment program.
For others, it may increasingly involve genuine residence and integration.
And for jurisdictions seeking to attract exceptional individuals, citizenship by merit may offer a way to combine international openness with greater selectivity and government discretion.
The question, therefore, is not whether investment migration is disappearing.
It is how the relationship between investment, contribution, residence, and citizenship is changing.
For high-net-worth individuals considering a second citizenship, that evolution could have important implications.
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