"While the previous investor citizenship scheme is no longer in force, Malta established a new scheme at the end of 2020," the EU letter pointed out.
Malta started selling passports to wealthy foreigners in 2014, with strong demand mostly from rich Russians, Chinese and others in the Arab gulf.
An EU passport grants visa-free travel, working and residency rights throughout the 27-nation European Union.
In response to the Commission's move, the Maltese government said it "firmly" reiterated that citizenship is a matter for member states to decide and should remain so.
It added that it wanted a "constructive dialogue" with Brussels and would answer its objections more fully in due course.
Valletta's "citizenship by investment" scheme has raked in $1.5 billion since it was launched in 2014.
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