For more than a decade, European investment migration was largely a real estate story. The proposition was simple: buy a qualifying property, obtain residence and retain the property for the required period. It was easy to understand, easy to market and, for much of the industry, relatively easy to execute.

It was also becoming increasingly difficult for governments to defend.

The political problem was not necessarily the amount of capital involved. It was the question of what that capital was actually accomplishing. If a wealthy foreign investor purchased an apartment in an already-established residential market, was the resulting economic benefit sufficiently different from an ordinary property transaction to justify granting an immigration benefit?

That question became increasingly difficult to answer.

The next generation of investment migration is therefore likely to look very different from the first. The property may disappear. The investment will not. Increasingly, that investment may be made through funds.

Why Property Became the Default

Real estate was attractive because it solved several problems simultaneously. The investor understood what they were buying, the asset was tangible, and the investment could potentially generate rental income or appreciate in value. Governments, meanwhile, could point to visible investment in their economies.

For the industry, the structure was equally straightforward. Developers created qualifying properties, agents sold them, lawyers structured the transactions and the investor received a residence permit. The interests of the various participants were relatively easy to align.

For years, this model worked.

But it contained an obvious weakness. The economic contribution of buying an apartment is difficult to distinguish from simply buying an apartment. The capital may be substantial, but its wider economic impact can be limited, particularly where the investment is concentrated in existing residential stock rather than new productive activity.

That distinction has become increasingly important.

As I argued in The Death of the European Property Golden Visa, the pressure on the property model was becoming structural rather than temporary. The question was no longer simply whether wealthy foreigners were willing to buy European property. It was whether governments continued to believe that property ownership was the most appropriate economic justification for granting residence.

The Housing Problem Changed the Politics

The political environment eventually changed because housing affordability became a major issue across Europe. Governments began asking whether foreign investment migration should be encouraging additional demand for residential property in markets where local residents were already facing higher prices and reduced affordability.

Portugal became the clearest example.

The Portuguese Golden Visa had attracted substantial foreign investment since its introduction in 2012, but the programme increasingly became associated with property prices and housing affordability. The government first restricted the geographical areas in which qualifying property could be purchased and subsequently moved toward ending the property-based model altogether.

By October 2023, the change had become law.

Portugal’s Law No. 56/2023 amended the country’s immigration framework as part of a broader housing package and revoked the real-estate-linked investment routes for new applications. At the same time, however, it retained several non-real-estate investment routes, including a fund-based route.

Something much more interesting therefore happened than a simple closure.

Portugal did not eliminate investment migration.

It redirected it.

Portugal Shows the Future

Portugal’s October 2023 legislation retained a €500,000 route involving qualifying non-real-estate collective investment undertakings established under Portuguese law. The qualifying vehicle must have a maturity of at least five years at the time of investment, and at least 60% of the value of its investments must be invested in commercial companies headquartered in Portugal.

This is a fundamental change in the philosophy of the programme.

The government is effectively saying: we still want foreign capital; we simply want greater influence over where that capital goes.

That is a much more sophisticated approach to investment migration.

It changes the proposition from one based primarily on ownership of a qualifying asset to one based on the allocation of capital.

From Property Ownership to Capital Allocation

The difference between the two models is significant.

Under the old model, the investor chose an apartment. Under the fund model, the investor provides capital to an investment vehicle, and the fund manager allocates that capital according to a defined investment mandate.

The economic benefit can therefore extend beyond one property. Capital can finance companies, support expansion, provide growth capital, finance development, support infrastructure or participate in other productive economic activities. At the same time, the investor has the possibility of receiving an investment return.

The government receives productive capital.

The investor receives an investment.

That is a much better alignment of interests.

It is also much easier for a government to explain politically why the investment should qualify for an immigration benefit. The argument is no longer simply that a foreign investor has purchased a property. It is that foreign capital is being channelled into economic activity that the country wishes to encourage.

This is an important evolution in investment migration.

Ireland Had Already Demonstrated the Concept

Ireland provides an interesting comparison because its Immigrant Investor Programme had already demonstrated that investment migration did not need to be based on residential property.

When Ireland closed the programme to new applications in February 2023, the government noted that it had approved almost €1.252 billion of investment since inception. The programme included enterprise investment, approved investment funds, Irish REITs and philanthropic endowments. The investment-fund route required a minimum €1 million investment for at least three years, with the funds subject to approval and regulation by the Central Bank of Ireland.

Ireland therefore demonstrated something important before it closed its programme: investment migration does not need to be structured around property. It can be structured around capital markets and professionally managed investment vehicles.

The subsequent decision to close the Irish programme was a reminder that even a more sophisticated investment structure remains subject to political and public-policy risk. But the underlying model was already much closer to where European investment migration appears to be heading.

Funds Solve a Problem for Governments

The attraction of a fund-based system for governments is obvious.

A government can define the economic objectives it wants to achieve, establish qualifying investment criteria, require regulated structures, impose minimum holding periods and determine whether capital must be directed toward domestic businesses or other strategic sectors. It can also create mechanisms for monitoring compliance and, at least in principle, measuring the economic impact of the programme.

That is much harder to achieve when the qualifying investment consists simply of privately owned apartments.

A property transaction can certainly have economic benefits. Construction, development, professional services, taxation and subsequent expenditure can all contribute to an economy. But once the property has been purchased, the government has relatively little control over what happens to the capital thereafter.

A properly structured investment vehicle creates a different relationship between the investor and the economy.

Funds Also Solve a Problem for Investors

The investor can benefit from the same change.

A €500,000 investment in a single property is concentrated. A €500,000 investment in a professionally managed fund can potentially provide exposure to a portfolio of investments and therefore a different risk profile.

Instead of taking one property risk, the investor can participate in a diversified portfolio. Instead of managing tenants, repairs and property administration, the investor can delegate investment management. Instead of making the immigration objective the only reason for the investment, the investor can evaluate the investment on its own merits.

That is important.

The best investment migration product should still be a good investment.

The immigration benefit should be an additional advantage, not the sole justification for putting capital at risk.

The Investment Should Stand Alone

This is where the industry needs to mature.

For too long, some Golden Visa products were effectively sold backwards. The proposition was: buy this property and receive residence.

The better proposition is fundamentally different: make a sensible investment that also provides an immigration benefit.

That sounds like a small distinction.

It is not.

If the investment only makes sense because it provides a visa, the investor is exposed to policy risk. If the investment makes sense independently, the immigration benefit becomes an additional advantage attached to an investment that the investor would otherwise consider.

That distinction should increasingly become one of the defining tests of the industry.

As I argued in Investment Migration Is No Longer Just About a Passport, investment migration is becoming less about the immigration document itself and more about the broader economic and strategic reasons for establishing a relationship with a jurisdiction.

Private Equity Is Particularly Interesting

Private equity may become an important component of the next generation of investment migration.

Governments want companies to grow. They want capital to reach productive businesses. They want employment, innovation and domestic companies capable of expanding into new markets. Private equity is designed to provide precisely that kind of capital.

A properly structured investment vehicle can therefore connect international investors with domestic businesses while giving governments a clear economic rationale for the programme.

The investor is not simply purchasing an asset.

The investor is supplying capital.

That is a fundamentally different economic relationship.

It also creates the possibility that investment migration could become connected to sectors such as technology, healthcare, renewable energy, infrastructure, tourism, manufacturing and other areas where governments actively want to attract capital.

The Fund Manager Becomes More Important

This transition also changes the role of the fund manager.

Under a property Golden Visa, the developer often dominated the investment proposition. The developer controlled the asset, the sales proposition and, in many cases, the narrative surrounding the investment.

Under a fund model, the fund manager becomes central.

Investment strategy matters. Governance matters. Valuation matters. Risk management matters. Liquidity matters. Fees matter. Exit strategy matters. Most importantly, the manager needs to demonstrate that the fund is a genuine investment vehicle rather than simply a repackaged immigration product.

That requires a much higher level of institutional professionalism.

It also brings investment migration much closer to the established world of private capital and asset management.

Regulation Will Matter

This is one reason regulated funds are likely to have an advantage.

Governments increasingly want to know where investor money goes. Investors increasingly want to know how it is managed. Regulatory oversight can provide an additional layer of credibility and accountability.

It does not eliminate investment risk, and it certainly does not guarantee investment performance. Regulation cannot transform a poor investment strategy into a good one.

What it can provide is a framework within which the investor, fund manager, administrator, regulator and government can understand their respective responsibilities.

That is increasingly important in an industry that has spent years fighting the perception that residence can simply be purchased.

The European Commission had already identified concerns around investor residence schemes, including security, money laundering, tax evasion and corruption, and had called for greater transparency and effective independent oversight.

The move toward regulated investment vehicles does not solve every concern, but it potentially provides a much more institutional framework for addressing them.

Greece Is Facing the Same Question

Greece illustrates the other side of the transition.

The Greek Golden Visa remained heavily focused on real estate. According to Enterprise Greece, the programme had brought in more than €5 billion of investment over its first decade, primarily in real estate, with approximately 13,000 visas issued. From August 1, 2023, the minimum property investment in selected areas was doubled to €500,000, while the existing threshold remained elsewhere.

The Greek approach therefore represented an adjustment rather than a fundamental change in the investment model.

That may ultimately prove to be a temporary solution.

Increasing the price of the property does not fundamentally change the nature of the investment. It is still residential real estate. The more fundamental question is whether Greece eventually wants to channel some of this international capital into productive investment instead.

This is where the Greek and Portuguese models begin to diverge.

Portugal is asking where foreign capital should be allocated.

Greece, at this stage, was primarily asking how much foreign capital should be required to enter particular property markets.

The distinction may become increasingly important.

The European Model Is Splitting

Europe is now moving in several directions.

Some countries are restricting or closing investment migration programmes. Others are retaining them but changing the qualifying investment. Within that second group, there is a growing movement away from passive residential property and toward forms of investment that governments can more readily associate with productive economic activity.

That creates a new competitive landscape.

The successful programmes of the future may not necessarily be those with the lowest investment threshold. They may instead be those that offer the strongest combination of residence, investment, potential return, diversification and economic substance.

That is a much more sophisticated product.

It is also a much more difficult product to create.

The Investor Is Changing Too

The modern HNWI does not necessarily want another apartment.

Many wealthy investors already have substantial real estate exposure. They may own property in several countries, operate businesses, hold private equity investments and maintain diversified listed portfolios.

What they increasingly want is optionality: residence, mobility, tax planning, family access, investment diversification and protection against political or economic change.

A fund-based investment migration product can potentially fit into that broader portfolio because the qualifying investment can be evaluated alongside the family’s existing allocation to real estate, equities, private markets and other assets.

The investor is therefore no longer necessarily asking, “Which property should I buy?”

The more sophisticated question is, “Where does this investment belong within my portfolio?”

That is a significant change.

The Golden Visa Is Becoming Institutional

This may be the most important development of all.

Investment migration is moving from the property industry into the financial industry. That means the next generation of products will increasingly look like investment products.

They will have investment mandates, fund structures, professional managers, administrators, auditors, custodians, compliance systems, reporting, valuations and investment committees.

The immigration benefit will remain important.

But it will no longer necessarily be the entire product.

This is why the development of investment migration should be understood not simply as a change in immigration law but as a shift in the institutional architecture surrounding international capital.

This Is Better for the Industry

The move toward funds should also improve the quality of the investment migration industry.

It creates barriers to entry.

A property developer can create a project relatively quickly. A credible investment fund requires considerably more infrastructure. The manager must have an investment strategy, governance framework, compliance systems, reporting procedures and an identifiable investment team. The underlying investments must actually exist, and investors must be able to understand how their capital is being deployed.

That should make it more difficult for purely promotional products to enter the market.

It should also move the industry closer to the standards expected in mainstream private capital.

The consequence may be fewer products, but better products.

But Funds Are Not Automatically Better

There is an important caveat.

A fund is not automatically a good investment simply because it is regulated.

The investor still needs to understand the investment strategy, the underlying assets, the manager, the fees, the liquidity, the expected holding period, the valuation methodology and the exit strategy.

Most importantly, the investor should ask a deceptively simple question:

Would I make this investment if there were no Golden Visa attached to it?

That may be the most important question of all.

If the answer is no, the investment may be little more than a visa product disguised as an investment.

If the answer is yes, the investor has a much stronger basis for proceeding.

The New Investment Migration Product

The next generation of European investment migration is therefore likely to be fundamentally different from the first.

The first generation was largely about buying property.

The emerging model is about allocating capital.

That is a major evolution.

It gives governments greater control over the economic outcome. It gives investors the potential for greater diversification. It gives fund managers access to a new international investor market. And it creates the possibility of connecting migration policy with genuine economic development.

Portugal has provided perhaps the clearest early example of this transition.

The property route is being removed.

But the investment route remains.

That distinction tells us something important about where the industry is going.

As I argued in Citizenship by Investment: Product or Public Policy?, the long-term sustainability of investment migration depends in part on whether governments can demonstrate a genuine public-policy rationale for the capital they seek to attract. The same principle applies to residence programmes: the more clearly the investment contributes to the host economy, the easier it becomes to defend the immigration benefit attached to it.

The Future Belongs to Capital Allocation

The central change is therefore not simply that funds are replacing property.

It is that investment migration is beginning to move from asset acquisition to capital allocation.

That distinction matters.

A property transaction asks the investor to buy an asset.

A fund asks the investor to trust an investment manager with capital.

The second model is more demanding. It requires professional management, governance, valuation, reporting, risk management and an investment thesis that can withstand scrutiny.

But that may be precisely why it has a future.

Investment migration is not disappearing.

Passive property investment may increasingly disappear from the centre of the model.

The future may belong to the fund manager rather than the property developer.

And if that happens, investment migration will become less about buying a European address and more about becoming a participant in the European economy.