Malta's parliament on Tuesday (12 November) approved selling citizenship of the Mediterranean island for €650,000 for each non-European Union applicant.
Prime Minister Joseph Muscat said the programme was meant to bring in revenue to the country while attracting "high value" people who could potentially invest in the island.
He estimated the scheme would earn the government €30 million in its first year – meaning around 45 people would be sold citizenship, which would also give them work and residency rights in the rest of the 28-member bloc.
Malta is a member of the European Union, a member of the Schengen border-less travel area and has a visa waiver agreement with the United States.
Eric Major, the CEO of Henley and Partners, the international group that will administer the scheme, told the Maltese media that between 200 and 300 individuals were expected to apply every year.
"This will be an open and transparent programme," he said.
The opposition Nationalist Party has strongly opposed the scheme, complaining that it is not linked to residence or investment. Opposition leader Simon Busuttil warned in parliament that Malta could end up being compared to tax haven countries in the Caribbean.
Busuttil said his party was not ruling out a proposal to collect signatures to try to force a referendum on the scheme.
The government insists applicants will be vetted and that people connected to crime will not be accepted. It says other EU countries are considering similar schemes.
A small protest was held outside parliament during the vote, with the demonstrators calling for citizenship to be linked to substantial investment, rather than just being sold.
Malta, along with Italy and Greece, has borne much of the brunt of the EU's two-decade immigration crisis, with gangs smuggling poor migrants from Africa to its shores in rickety boats to seek a new life in the European Union.