There is a risk in every investment that rarely appears in the investment memorandum.

Political risk.

An investor can analyse:

• The property.
• The fund.
• The manager.
• The expected return.
• The tax treatment.
• The financing.
• And the exit.

But there is another question:

What happens if the government changes the rules?

This question has become particularly important in European investment migration.

Over the past several years, governments have changed Golden Visa programmes, tax regimes and citizenship programmes at an increasingly rapid pace.

Portugal changed its Golden Visa.

Spain has now abolished its property-based Golden Visa.

Greece has increased investment thresholds in selected markets.

Italy changed the economics of its special tax regime.

And Malta has just lost its landmark legal battle over citizenship by investment before the Court of Justice of the European Union.

For investors, the lesson is bigger than any individual programme.

Government policy is itself an investment risk.

The Investor Makes a Long-Term Decision

An investment migration decision is fundamentally different from an ordinary investment.

An investor may purchase an asset today based on the expectation of maintaining residence rights for many years.

The decision may involve:

• a home;
• a business;
• an investment fund;
• school arrangements;
• family relocation;
• tax planning;
• succession planning; and
• long-term capital allocation.

These are not decisions that can easily be reversed.

If the government changes the rules six months later, the investor may already have reorganised their entire life around the original framework.

That creates an important policy issue.

The Government Has a Different Time Horizon

Governments think in electoral cycles.

Investors think in decades.

A programme introduced by one government may be amended by another.

A tax incentive introduced to attract capital may become politically unpopular.

A Golden Visa that was once promoted as foreign investment may later be criticised as contributing to housing inflation.

A citizenship programme that was once regarded as an economic opportunity may later be regarded as a constitutional problem.

The investor cannot assume that yesterday’s policy objective will remain tomorrow’s policy objective.

Spain Is the Latest Example

Spain provides a particularly clear example.

The country’s investor residence regime was established in 2013.

The property route became one of the better-known European Golden Visa programmes, with a minimum €500,000 qualifying real-estate investment.

But the political environment changed.

The government increasingly focused on housing affordability and argued that foreign investment in residential property was contributing to pressure in certain markets.

The Spanish legislature ultimately abolished the investor residence provisions, with the change taking effect on 3 April 2025.

That is a dramatic change for a programme that had existed for more than a decade.

But there is an important distinction.

Spain did not simply erase the legal position of every investor who had previously participated.

The legislation contains transitional provisions dealing with existing authorisations and applications.

That distinction matters enormously.

New Investors and Existing Investors Are Different

There are really two questions when a government changes an investment programme.

Can the government change the rules for new applicants?

And:

What happens to people who have already invested under the old rules?

The first is primarily a question of public policy.

The second is a question of investor confidence.

If governments can change the economic proposition retrospectively, investors will eventually demand a much higher risk premium.

The Principle of Grandfathering

This is why grandfathering provisions are so important.

A government may decide that no new investors can enter a programme.

That does not necessarily mean that existing investors immediately lose their rights.

The distinction can be fundamental.

An existing investor may have:

• already invested capital;
• already obtained residence;
• already purchased property;
• moved their family;
• paid taxes;
• established a business; or
• committed to a long-term investment.

If the government respects the existing position while closing the programme to new applicants, the political decision is much easier to manage.

The programme changes.

But the investor’s original bargain is not necessarily destroyed.

Portugal Demonstrated the Same Issue

Portugal provides another example.

The country changed its Golden Visa framework and ultimately removed the traditional residential-property route.

But existing Golden Visa holders were not simply told that their investment had become irrelevant.

The legal framework included transitional treatment and renewal arrangements.

This is important because investment migration depends heavily on confidence.

An investor needs to believe that the government will respect the legal consequences of a decision already made.

Malta Is Different

The Malta situation demonstrates a different kind of policy risk.

On 29 April 2025, the CJEU ruled in Commission v Malta, C-181/23 that Malta’s investor citizenship scheme was contrary to EU law.

The Court found that a system of naturalisation in exchange for predetermined payments or investments amounted to a commercialisation of the grant of nationality and, by extension, EU citizenship.

This is different from a government simply changing an investment programme.

It is a determination that the underlying model itself is incompatible with EU law.

That distinction is critical.

An investor can accept that governments change policy.

But when the legal basis of a programme changes fundamentally, the consequences can be much greater.

Legal Risk Is Investment Risk

This is why sophisticated investors increasingly need to treat legal and regulatory risk as part of investment analysis.

A fund investor already understands this.

They ask:

What happens if interest rates rise?

What happens if regulation changes?

What happens if the investment thesis is wrong?

Investment migration investors should ask similar questions.

What happens if the programme closes?

What happens if the investment threshold increases?

What happens if the qualifying asset changes?

What happens if tax treatment changes?

What happens if the government introduces new residence requirements?

What happens if the EU intervenes?

These questions should be asked before investing.

Not afterwards.

The Cheapest Programme May Be the Riskiest

This also changes the way programmes should be compared.

Suppose one jurisdiction offers residence for €250,000.

Another requires €500,000.

The first looks cheaper.

But what if the €250,000 programme has a history of political instability?

What if the government regularly changes the rules?

What if the investment has poor liquidity?

What if the programme is under pressure from the EU?

What if the qualifying investment is concentrated in an asset class that is becoming politically unpopular?

The apparent saving may not be a saving at all.

Policy Stability Has Economic Value

Investors routinely pay for stability.

They pay for stable currencies.

Stable banks.

Stable legal systems.

Stable governments.

Stable regulation.

The same principle applies to investment migration.

A programme that has existed for ten years with clear legislation and predictable renewal rules may be more valuable than a newly launched programme offering a superficially better financial proposition.

The investor is buying more than residence.

They are buying a degree of policy certainty.

The Investor’s Real Asset Is the Investment

This is another reason why investment selection matters.

If an investor is going to commit €500,000 or €1 million to a qualifying investment, the investment should make sense independently of the immigration benefit.

If the programme changes, the investor should still own something of economic value.

This is one of the strongest arguments for properly structured investment funds.

The residence benefit can change.

The investment remains an investment.

The underlying portfolio may continue to generate returns.

That provides a degree of protection that a purely transactional migration payment does not.

Property Has a Different Risk

Property can also provide this protection.

But it has its own risks.

An investor may own a €500,000 apartment.

If the Golden Visa disappears, the apartment remains.

But its investment value may have been influenced by the migration programme itself.

If thousands of investors purchased property because of the residence benefit, the disappearance of that demand could affect liquidity and pricing.

The investor therefore has to separate:

property value

from

migration value.

They are not necessarily the same thing.

The Exit Strategy Matters

This is why the exit strategy should be considered at the beginning.

If the investment is being made for five years, what happens in year three if the programme changes?

Can the investment be sold?

Can it be transferred?

Can it be refinanced?

Does the investor retain residence rights?

Does the family retain derivative rights?

What happens if the investor no longer qualifies under the new rules?

These are not immigration questions alone.

They are investment questions.

Tax Is Even More Difficult

Tax regimes can change even faster.

A government may introduce a special regime to attract wealthy individuals.

A few years later, the regime becomes politically controversial.

The exemption is reduced.

The rate increases.

The qualifying conditions change.

Or the regime disappears for new entrants.

Italy’s decision in 2024 to increase the annual lump-sum tax for new participants in its special regime from €100,000 to €200,000 was a reminder that even jurisdictions actively competing for wealthy residents can change the economics of their proposition.

Existing and future residents may therefore face very different tax outcomes.

Tax Planning Must Be Flexible

This is why tax planning for HNWIs should never be built entirely around one incentive.

A robust structure should survive a policy change.

The investor should understand:

• current taxation;
• potential future taxation;
• exit taxation;
• inheritance;
• capital gains;
• property taxation;
• treatment of investment structures; and
• the consequences of changing residence.

The objective is not simply to minimise tax.

It is to avoid creating a structure that becomes economically unworkable when the government changes one rule.

Governments Also Need to Think About Confidence

There is a broader lesson here for governments.

Changing a programme for new applicants is one thing.

Changing the rules for people who have already invested is another.

If investors begin to believe that government promises have a short shelf life, capital becomes more cautious.

Investors demand greater returns.

Lawyers demand stronger protections.

Investment structures become more complicated.

And the jurisdiction becomes less competitive.

Policy instability therefore has an economic cost.

The Best Programmes May Be the Most Boring

This is perhaps counterintuitive.

The strongest investment migration programme may not be the one with the most generous benefits.

It may be the one with:

• clear legislation;
• transparent qualifying criteria;
• strong due diligence;
• stable administration;
• credible investment structures;
• predictable renewal rules;
• proper transitional provisions; and
• a government committed to long-term policy.

In other words:

boring can be valuable.

For wealthy investors, predictability is an asset.

The Investor Should Read the Exit Rules First

Before investing, I would ask a simple question:

What happens if the programme is abolished tomorrow?

If the answer is:

“You lose everything.”

That is a serious problem.

If the answer is:

“The investment remains valuable, existing rights are protected and the government has transitional provisions.”

That is very different.

The distinction should be part of every serious investment-migration due-diligence process.

The European Market Is Maturing

The European investment-migration market is therefore entering a more mature phase.

The easy years are over.

Governments are more cautious.

The EU is more involved.

AML requirements are stronger.

Housing policy is more important.

Citizenship is being scrutinised.

Tax regimes are changing.

And investors are becoming more sophisticated.

This should ultimately improve the market.

Weak programmes will disappear.

Strong programmes will have to demonstrate genuine economic value.

Investment Migration Needs a Longer Contract

The fundamental issue is one of trust.

An investor makes a long-term decision based on a government framework.

The government should retain the right to change public policy.

But the investor also needs reasonable confidence that a decision made legally and in good faith will not simply be rendered worthless overnight.

That balance is essential.

Without it, investment migration becomes speculation on government policy.

And that is not a sustainable investment product.

The Future Will Belong to Credible Jurisdictions

The European investor now has more choices than ever.

That gives governments an interesting problem.

If they want international capital, they must compete not only on tax and investment incentives.

They must compete on credibility.

Credibility of the law.

Credibility of the regulator.

Credibility of the programme.

And credibility of the government’s commitment to existing investors.

The countries that provide this confidence will have a significant advantage.

The Investor’s Rule

There is a simple rule I would apply to every investment-migration decision:

Never invest solely because a government promises something.

Invest because the underlying asset makes sense.

Choose the jurisdiction because the legal and economic environment makes sense.

And make sure the structure remains viable if the government changes the rules.

The best investment migration strategy is therefore not the one that assumes governments will never change.

It is the one that is designed on the assumption that, eventually, they will.

Governments have the right to change policy. Investors have the right to price that risk. The most successful jurisdictions will be those that understand both.