For many years, investment migration was described in very simple terms.
Invest a certain amount of money.
Obtain residence.
Or obtain a passport.
The investment was often presented as the price of admission.
That description is becoming outdated.
For wealthy investors, investment migration is increasingly about something much broader: where they can live, where they can invest, where their families can establish themselves and what options they have if circumstances change.
The passport may be the final document.
It is not necessarily the reason for the investment.
The Passport Is Only One Asset
Citizenship has obvious value.
A second passport can provide greater travel flexibility, access to another country and, depending on the jurisdiction, additional rights and opportunities.
But wealthy investors increasingly look beyond the passport itself.
They consider residence.
Taxation.
Education.
Healthcare.
Security.
Business access.
Investment opportunities.
Succession.
And the ability to move between jurisdictions.
The real asset is therefore not necessarily citizenship.
It is optionality.
Residence Can Be More Valuable Than Citizenship
This distinction is particularly important in Europe.
An investor may not need a new nationality.
They may simply want the right to reside in another country.
That right can provide a base for the family, access to a particular lifestyle and a degree of geographic diversification without requiring the investor to abandon their existing nationality.
Residence programmes have therefore become an important part of the investment migration market.
The distinction between citizenship by investment and residence by investment is fundamental.
Citizenship changes nationality.
Residence changes where a person is legally permitted to live.
For many investors, the second may be more important than the first.
Europe Is Changing the Rules
The European Union has also made clear that it views these programmes differently.
In March 2022, the European Commission called on EU Member States to repeal investor citizenship schemes and to strengthen controls around investor residence schemes. The Commission specifically linked the issue to concerns over security, money laundering and the implications of the war in Ukraine.
The political direction was therefore becoming clear.
The era of simply selling access to European citizenship was coming under increasing pressure.
But that does not mean demand for investment migration was disappearing.
Quite the opposite.
The underlying demand remained.
Why Does the Demand Exist?
The reasons are broader than taxation.
Consider an entrepreneur whose business has become internationally successful.
Their children may want to attend university in Europe.
Their family may want a European base.
They may want access to European healthcare.
They may want a second place to live.
They may want greater political or economic diversification.
Or they may simply want the ability to leave their home country if circumstances change.
None of these objectives necessarily requires citizenship.
They require mobility.
The Wealthy Think in Options
This is where investment migration increasingly intersects with wealth management.
A wealthy investor already understands diversification.
They diversify equities.
They diversify currencies.
They diversify banks.
They diversify real estate.
They diversify investment managers.
Why would they not also diversify jurisdictions?
A second residence can therefore be viewed as another form of diversification.
It is not necessarily an insurance policy against a specific event.
It is an insurance policy against being completely dependent on one country.
COVID Changed the Psychology
The pandemic reinforced this idea.
For many people, the ability to move freely between countries suddenly became far more important.
Borders closed.
Flights stopped.
Residency rules changed.
Governments imposed restrictions.
People who had previously assumed that international mobility was effectively guaranteed discovered that it was not.
For wealthy individuals with international businesses and families spread across several countries, the experience was particularly instructive.
Mobility had value.
And the value of mobility became more obvious when mobility disappeared.
Ukraine Changed the Calculation Again
The war in Ukraine added another dimension in 2022.
European governments became much more focused on the relationship between investment migration, security and sanctions.
This inevitably increased scrutiny of applicants and programmes.
But it also demonstrated why international mobility can matter to wealthy families.
Political risk is not theoretical.
It can change quickly.
The question for a wealthy family is therefore not necessarily:
“Will I move?”
It may be:
“Could I move if I had to?”
That is a very different question.
The Investment Matters
This is where the quality of the investment programme becomes important.
If the investment is simply a cost paid to obtain a document, the economic logic is relatively weak.
The investor is effectively purchasing a migration benefit.
But if the investment itself is economically productive, the calculation changes.
The investor may obtain the desired residence status while simultaneously owning an asset that generates income or appreciates in value.
That is a much more sophisticated proposition.
Portugal Is an Interesting Example
Portugal illustrates this transition.
The Portuguese Golden Visa had historically been strongly associated with property investment.
But from January 2022, qualifying property investment was restricted in the most popular areas, including Lisbon and Porto and certain coastal areas.
Investors therefore began considering alternative routes, including investment in Portuguese companies and qualifying investment funds.
This is important.
It demonstrates that investment migration does not have to mean buying a house.
The investment can potentially become part of a wider portfolio.
From Property to Funds
This may ultimately be one of the most important developments in the sector.
Real estate is easy to understand.
An investor can see the property.
They can visit it.
They can rent it.
They can sell it.
But property is not always the best economic investment.
A fund can provide exposure to multiple assets.
It can provide professional management.
It can potentially diversify geographical and sector exposure.
And, depending on the programme and its rules, it can connect an immigration objective with a genuine investment strategy.
That is a very different proposition from simply purchasing an apartment.
Investment Migration Should Create Economic Value
There is also a broader public-policy issue.
Governments have a legitimate interest in attracting foreign capital.
But they should ask what type of capital they want.
A €500,000 investment into an empty apartment may produce a very different economic result from €500,000 invested into operating businesses, infrastructure, development or professionally managed investment funds.
The first may inflate an existing asset price.
The second may create employment, business activity and productive investment.
This distinction matters.
The Programme Is Not the Product
This is where I believe the industry needs to evolve.
The product should not simply be:
“Invest €X and receive residence.”
The product should be:
“Invest intelligently in a jurisdiction while obtaining a legitimate residence benefit as part of the overall investment strategy.”
That is a much stronger proposition.
It also creates better alignment between the investor and the host country.
The investor receives an investment.
The country receives productive capital.
And the residence programme becomes the mechanism connecting the two.
The Rise of the Investment Fund
This is one reason investment funds are becoming increasingly interesting in the investment migration market.
A fund can aggregate capital.
It can invest across multiple assets.
It can be professionally managed.
And it can potentially direct foreign capital toward sectors that governments actually want to develop.
For the investor, this can be more attractive than owning a single property.
For governments, it can be more economically productive.
The challenge is ensuring that the fund is a genuine investment vehicle rather than an immigration product disguised as one.
Citizenship Is Becoming Harder to Sell
The European political environment is also changing.
In March 2022, the European Parliament supported calls to end citizenship-by-investment schemes in the EU and to regulate residence-by-investment programmes more closely.
Later that year, the European Commission referred Malta’s investor citizenship scheme to the Court of Justice of the European Union.
This is significant.
The political debate is moving away from the idea that citizenship can simply be exchanged for a predetermined investment.
That does not eliminate investment migration.
It changes the model.
The Future May Be Residence Rather Than Citizenship
The European market may therefore move toward a different form of investment migration.
Residence.
Long-term residence.
Business establishment.
Investment funds.
Entrepreneurship.
Real economic activity.
The investor may still eventually qualify for citizenship through the ordinary naturalisation process, but citizenship becomes the consequence of a genuine relationship with the country rather than the immediate investment product.
That may ultimately prove more sustainable.
The Wealth Management Connection
Investment migration should therefore not be viewed as a stand-alone immigration decision.
For a high-net-worth individual, it can form part of a much larger wealth-management strategy.
Where should the family live?
Where should the children be educated?
Where should the family office be based?
Where should investments be held?
Where should property be acquired?
Where should businesses be established?
Where will the next generation live?
And what happens if the political or tax environment changes?
These are wealth-management questions.
Immigration status is simply one component.
The New Investment Migration Investor
The old investment migration investor was often described as someone looking for a passport.
The new investor is different.
They may be looking for:
A second residence.
Geographical diversification.
Tax efficiency.
Family security.
Business access.
Investment opportunities.
A European base.
Or simply the ability to keep their options open.
The passport may be useful.
But it is only one part of the equation.
The Opportunity for Governments
Governments should recognise this change.
The most successful programmes will probably not be those that simply sell the fastest route to a passport.
They will be those that attract long-term productive capital.
That means investment funds.
Businesses.
Development.
Infrastructure.
Technology.
Real estate where it genuinely creates additional economic value.
And investors who have a meaningful economic relationship with the country.
Investment migration can therefore become a form of economic policy rather than simply an immigration policy.
The Opportunity for Investors
Investors should also change the way they evaluate these programmes.
The question should not be:
“What is the cheapest way to obtain residence?”
Nor should it simply be:
“Which country gives me the strongest passport?”
The better question is:
“Which jurisdiction gives me the best combination of residence, investment, taxation, lifestyle and long-term optionality?”
That is a much more sophisticated investment decision.
The New Product
Investment migration is evolving.
The passport is no longer necessarily the product.
The product is optionality.
The best programmes will increasingly combine a legitimate immigration benefit with a genuine investment proposition.
For wealthy investors, that creates something more valuable than another document.
It creates another jurisdiction in which to live, invest, operate and build.
And in an increasingly uncertain world, having another credible option may be one of the most valuable assets a wealthy family can own.