For more than a decade, European investment migration was largely a real estate story.
The proposition was simple.
Buy a qualifying property.
Obtain residence.
Keep the property.
It was easy to understand, easy to market and relatively easy to execute.
It was also becoming increasingly difficult for governments to defend.
The next generation of investment migration is likely to look very different.
The property may disappear.
The investment will not.
And increasingly, that investment will 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.
The investment could potentially generate rental income or appreciate in value.
And governments could point to visible investment in their economies.
For the industry, it was also straightforward.
Developers created qualifying properties.
Agents sold them.
Lawyers structured the transactions.
The investor received a residence permit.
For years, this model worked.
But there was 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.
The Housing Problem Changed the Politics
The political environment eventually changed.
Housing affordability became a major issue across Europe.
Governments began asking whether foreign investment migration should be encouraging additional demand for residential property.
Portugal became the clearest example.
The Portuguese Golden Visa had attracted billions of euros since its introduction in 2012.
But the programme increasingly became associated with property prices and housing affordability.
Portugal first restricted the geographical areas in which qualifying property could be purchased.
Then the government moved toward ending the property-based programme altogether.
By October 2023, legislation had been enacted removing the qualifying real estate routes.
But something much more interesting happened at the same time.
Portugal did not simply eliminate investment migration.
It redirected it.
Portugal Shows the Future
Portugal’s October 2023 legislation removed several of the traditional Golden Visa investment routes, including the direct real estate route.
But it retained a €500,000 route involving qualifying non-real-estate collective investment undertakings.
Those funds must have a minimum five-year maturity and at least 60% of their investments must be made in commercial companies headquartered in Portugal.
This is a fundamental change.
The government is effectively saying:
We still want foreign capital. We simply want to decide where that capital goes.
That is a much more sophisticated approach to investment migration.
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.
The fund manager then allocates that capital according to an investment mandate.
The economic benefit can therefore extend beyond one property.
It can finance companies.
It can support expansion.
It can provide growth capital.
It can finance infrastructure.
It can support development.
It can create employment.
And it can potentially generate returns for the investor.
The government gets productive capital.
The investor gets an investment.
That is a much better alignment of interests.
Ireland Had Already Demonstrated the Concept
Ireland provides an interesting comparison.
Its Immigrant Investor Programme was closed to new applications in February 2023.
But the Irish programme was never limited to residential property.
It allowed investment into enterprises, approved investment funds, REITs and philanthropic projects.
The minimum investment into an approved investment fund was €1 million for at least three years, with the funds subject to regulatory approval.
Ireland therefore demonstrated something important.
Investment migration does not need to be based on property.
It can be structured around capital markets.
The subsequent decision to close the Irish programme was a reminder that even a more sophisticated structure remains subject to political and public-policy risk.
But the underlying investment model was already much closer to where Europe 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.
It can establish qualifying investment criteria.
It can require regulated fund structures.
It can impose minimum holding periods.
It can require investment into domestic businesses.
It can monitor compliance.
And it can potentially measure the economic impact.
That is much harder to achieve when the qualifying investment is simply a collection of privately owned apartments.
Funds Also Solve a Problem for Investors
The investor benefits too.
A €500,000 investment in one property is concentrated.
A €500,000 investment into a professionally managed fund can potentially provide diversification across multiple investments.
Instead of taking one property risk, the investor can participate in a portfolio.
Instead of managing tenants, repairs and property administration, the investor can delegate investment management.
And instead of making the immigration objective the only reason for the investment, the investor can consider the investment on its own merits.
That is important.
The best investment migration product should still be a good investment.
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 sales pitch was:
Buy this property and receive residence.
The better proposition is:
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.
That is a much stronger proposition.
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.
They want innovation.
They want domestic companies to expand.
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.
The Fund Manager Becomes More Important
This also changes the role of the fund manager.
Under a property Golden Visa, the developer often dominated the investment proposition.
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 will require a much higher level of institutional professionalism.
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.
It does not eliminate investment risk.
It certainly does not guarantee investment performance.
But it can provide a framework within which the investor, fund manager and government can understand their respective responsibilities.
That is increasingly important in an industry that has spent years fighting perceptions that residence can simply be purchased.
Greece Is Facing the Same Question
Greece illustrates the other side of the transition.
The Greek Golden Visa remained heavily focused on real estate.
The programme had attracted more than €5 billion of investment over its first decade, according to Enterprise Greece, with most of the investment going into real estate.
The government responded to pressure in the property market by increasing the minimum investment to €500,000 in selected areas from August 2023, while retaining the lower threshold elsewhere.
This 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.
The European Model Is Splitting
Europe is now moving in two directions.
One group of countries is restricting or closing investment migration programmes.
Another is keeping them but changing the qualifying investment.
And within that second group, there is a clear movement away from passive residential property.
That creates a new competitive landscape.
The successful programmes of the future may not necessarily be those with the lowest investment threshold.
They may be those that offer the best combination of:
Residence + Investment + Return + Diversification + Economic Substance.
That is a much more sophisticated product.
The Investor Is Changing Too
The modern HNWI does not necessarily want another apartment.
Many already have substantial real estate exposure.
They may own property in several countries.
They may have operating businesses.
They may have private equity investments.
They may have listed securities.
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.
The Golden Visa Is Becoming Institutional
This may be the most important development.
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.
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 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.
There must be governance.
There must be compliance.
There must be reporting.
The underlying investments must actually exist.
That should reduce the number of purely promotional products entering the market.
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:
What is the investment strategy?
What assets will the fund own?
Who manages it?
What are the fees?
What is the liquidity?
What is the expected holding period?
How is the investment valued?
What happens on exit?
And, critically:
Would I make this investment if there were no Golden Visa attached to it?
That may be the most important question of all.
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 about buying property.
The second generation is about allocating capital.
That is a major evolution.
It gives governments more control over the economic outcome.
It gives investors greater potential diversification.
It gives fund managers 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.
Investment migration is not disappearing.
Passive property investment is.
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.