Citizenship by merit is presented as the emerging alternative to formal citizenship by investment after European courts and regulators moved against price-tagged passport programs. The core argument is that investor demand for alternative citizenship has not disappeared; it has shifted toward older, discretionary nationality provisions that already exist in many countries’ laws.
In 2025, the EU Court of Justice effectively ended formal citizenship by investment in Europe by ruling against transactional, formula-based citizenship programs. The decision targeted the idea that citizenship in an EU member state can be sold through a structured program with fixed prices and published requirements.
This ruling marked the end of formal European citizenship by investment programs such as:
- Malta
- Cyprus
- Montenegro
- North Macedonia
The European Commission had been pushing against these programs for years, arguing that citizenship should be based on a genuine connection to a country rather than a purchasable product.
The transcript frames the problem around one word: transactional. Formal CBI programs were vulnerable because they looked like standardized commercial products, with clear thresholds, application rules, and government-approved price lists.
Demand did not disappear
The ruling did not remove demand for EU citizenship or alternative citizenship more broadly.
Investors and entrepreneurs still seek second citizenship for reasons such as:
- Travel freedom
- Tax planning
- Family security
- Political risk protection
- Optionality outside the home country
- Business and banking flexibility
- Long-term residence and relocation planning
The transcript argues that when formal programs are closed, demand reroutes into less visible channels.
Citizenship by merit
Citizenship by merit is described as the older and quieter alternative.
It is also called:
- Citizenship by decree
- Citizenship by exception
- Citizenship by discretion
According to the transcript, 74% of countries already have some form of this mechanism written into their nationality laws.
The basic structure is that a government has authority to grant citizenship to an individual it considers deserving. The decision may be made by a president, prime minister, parliament, or executive authority, depending on the country.
Typical qualifying contributions may include exceptional value in areas such as:
- Science
- Arts
- Sports
- Business
- Economic development
- Other fields considered nationally important
The criteria are usually vague by design. Most countries do not publish fixed thresholds, quotas, investment amounts, or processing timelines.
How citizenship by merit differs from CBI
Citizenship by merit differs from formal citizenship by investment in several important ways.
Case-by-case review
There is no standardized checklist.
Each application is evaluated individually, and the government keeps full discretion. This makes it harder to describe the process as a fixed commercial transaction.
Nebulous criteria
The laws usually refer to “significant contribution” or similar language without defining exact requirements.
This ambiguity is central to the model. It gives governments flexibility and makes the pathway harder to challenge in the same way as a formal CBI program.
Firms active in this space may understand approximate practical expectations, but those expectations are not official price lists.
Speed
Citizenship by merit can be faster than traditional naturalization and even faster than formal CBI.
Because citizenship may be granted directly by decree or parliamentary action, it may not require:
- Years of residency
- Standard naturalization periods
- Language testing
- Normal integration requirements
In some cases, the time from filing to passport may be measured in months.
Opacity
Formal CBI programs often publish some combination of prices, approval statistics, processing timelines, investment rules, and application documents.
Citizenship by merit usually does not.
There may be:
- No public list of applicants
- No official investment table
- No published approval statistics
- No public processing timeline
- No program website
The process moves quietly through government channels.
Protection from EU scrutiny
The transcript argues that citizenship by merit survives because it is treated as a sovereign prerogative.
Brussels has targeted formal CBI programs, but countries retain the right to decide who qualifies for citizenship based on national interest, merit, or exceptional contribution.
This legal distinction is what allows citizenship by merit to remain available even after formal CBI programs have been shut down.
Austria and Serbia
Austria is presented as the most prominent example.
The transcript says Austria has granted citizenship by merit to hundreds of individuals in exchange for major economic contributions. The key distinction is that Austria does not operate a formal citizenship by investment program. It has a discretionary legal provision.
This distinction matters because, while Malta and Cyprus were criticized for formal CBI programs, Austria did not face the same official pressure in the transcript’s framing.
Serbia is described as a more recent example of a country using discretionary citizenship grants in connection with investment in the country.
Why the model is expanding
The transcript predicts that citizenship by merit will become more important in 2026 because countries that wanted formal CBI programs may now avoid creating visible, price-tagged schemes.
Instead, governments may rely on existing discretionary provisions.
Countries most likely to expand this approach are described as including:
- Balkan states
- Caucasus countries
- Some Latin American countries
These countries may already have citizenship-by-merit provisions in their nationality laws and may also be motivated to attract capital without triggering the political backlash associated with formal CBI.
The transcript says this will not look like a normal program launch. There may be no public announcement, official price page, or glossy application portal.
Instead, a small number of connected firms may quietly tell clients that pathways are available, with a limited number of approvals each quarter.
Cost and professional role
Citizenship by merit is generally described as more expensive than traditional citizenship by investment.
Reasons include:
- No published minimum investment
- Case-by-case pricing
- Dependence on the applicant’s profile
- Need for high-level relationships
- More personalized advisory work
- Greater uncertainty
- More complex negotiation
A formal CBI application is described as a checklist. A citizenship-by-merit case is described as a negotiation.
The professional adviser therefore becomes more important than in standard CBI. The process depends heavily on judgment, relationships, positioning, documentation, and understanding what a government may consider valuable.
The scalability problem
The central tension is whether citizenship by merit can grow without attracting the same scrutiny that killed formal CBI.
Investors want predictability. Advisers want repeatable processes. Governments want discretion and legal defensibility.
The transcript describes the emerging challenge as finding a middle ground:
- Enough structure to make cases manageable
- Enough discretion to avoid looking like a price-tagged passport sale
- Enough variation to preserve the argument that each case is based on merit
If citizenship by merit becomes too standardized, it could begin to resemble the formal CBI programs that regulators already targeted.
Practical implications
Citizenship by merit may appeal to investors who want citizenship options but cannot use formal CBI programs in Europe.
However, it is not a mass-market pathway. It is likely to be more expensive, less transparent, and more dependent on professional guidance than standard programs.
Key considerations include:
- There may be no official price.
- Approval is discretionary.
- Timelines may be uncertain.
- Requirements may not be published.
- Government appetite can change.
- The adviser’s credibility matters heavily.
- A strong applicant profile may be more important than money alone.
- The pathway may work only in a small number of countries at any given time.
The practical takeaway is that the formal European citizenship-by-investment era may be over, but discretionary citizenship by merit remains available in many countries. It is quieter, more expensive, less predictable, and more relationship-driven, but it may become the main alternative for investors seeking citizenship after the collapse of formal CBI programs.
