Golden Visa via Fund Investment: How Some Skip Property Purchase

Reading time: 12 minutes

Table of Contents

1. Introduction to Golden Visa Programs
2. Traditional Golden Visa Routes
3. The Fund Investment Alternative
4. Countries Offering Fund-Based Golden Visas
5. Advantages of Fund Investments for Golden Visas
6. Potential Drawbacks and Considerations
7. Economic Impact of Fund-Based Golden Visas
8. Future Trends in Golden Visa Programs
9. Conclusion
10. FAQs

1. Introduction to Golden Visa Programs

Golden Visa programs have become increasingly popular in recent years as a means for high-net-worth individuals to obtain residency or citizenship in foreign countries. These programs typically involve significant investments in real estate, government bonds, or business ventures. However, a new trend is emerging that allows investors to bypass traditional property purchases and instead invest in funds to secure their Golden Visa.

2. Traditional Golden Visa Routes

Historically, Golden Visa programs have been synonymous with real estate investments. Countries like Portugal, Spain, and Greece have long offered residency permits to those willing to invest substantial sums in local property markets. For instance, investors looking to buy property in greece could qualify for the country’s Golden Visa program with a minimum investment of €250,000 in real estate.

2.1 Real Estate Investment Requirements

The traditional route often involves purchasing one or more properties that meet specific criteria set by the host country. These requirements can include:

• Minimum investment thresholds (e.g., €500,000 in Spain, €280,000 in Portugal)
• Property type restrictions (residential, commercial, or both)
• Location limitations (urban centers, rural areas, or specific regions)
• Holding period mandates (typically 5-7 years)

2.2 Challenges with Property-Based Golden Visas

While property investments have been the cornerstone of many Golden Visa programs, they come with their own set of challenges:

• Market saturation in popular areas
• Potential for property bubbles
• Maintenance and management costs
• Illiquidity of real estate assets
• Exposure to local property market fluctuations

3. The Fund Investment Alternative

In response to these challenges and to diversify their Golden Visa offerings, some countries have introduced fund-based investment options. This alternative allows investors to obtain residency or citizenship by investing in government-approved investment funds rather than directly purchasing property.

3.1 How Fund Investments Work

Fund-based Golden Visa investments typically involve the following process:

1. Investor selects an approved fund
2. Capital is invested for a specified period (usually 5-7 years)
3. Funds are managed by professional investment firms
4. Returns are generated through various investment strategies
5. At the end of the term, capital is returned (subject to market performance)

4. Countries Offering Fund-Based Golden Visas

Several countries have embraced the fund investment model for their Golden Visa programs. Let’s examine some of the most prominent options:

4.1 Portugal

Portugal’s Golden Visa program now includes a fund investment option with a minimum threshold of €500,000. Investors can choose from a variety of funds focusing on sectors such as real estate, technology, and renewable energy.

4.2 Greece

Greece has recently introduced a fund investment route for its Golden Visa program. Investors can now obtain residency by investing €400,000 in approved Greek funds, offering an alternative to the traditional real estate option.

4.3 Ireland

Ireland’s Immigrant Investor Programme allows for investments of €1 million in approved investment funds for a minimum of three years. These funds typically focus on enterprises that promote employment in Ireland.

5. Advantages of Fund Investments for Golden Visas

The shift towards fund-based Golden Visa investments offers several advantages over traditional property purchases:

5.1 Diversification

Fund investments allow for greater diversification of assets, reducing risk compared to single property investments. Funds may invest across various sectors and asset classes, providing a more balanced portfolio.

5.2 Professional Management

Unlike direct property ownership, fund investments are managed by professional teams with expertise in local markets and investment strategies. This can potentially lead to better returns and reduced management burden for investors.

5.3 Liquidity

Fund investments often offer better liquidity compared to real estate. Some programs allow for partial redemptions or transfers of fund units, providing more flexibility than property investments.

5.4 Lower Entry Thresholds

In some cases, fund investment options have lower minimum investment requirements compared to real estate purchases, making Golden Visa programs more accessible to a broader range of investors.

6. Potential Drawbacks and Considerations

While fund-based Golden Visa investments offer numerous advantages, there are also potential drawbacks to consider:

6.1 Market Risk

Like any investment, funds are subject to market fluctuations and there’s no guarantee of returns. Investors should carefully assess the fund’s strategy and historical performance.

6.2 Less Tangible Asset

Unlike property investments, fund investments don’t provide a physical asset that can be used or enjoyed by the investor. This may be a drawback for those seeking a second home or vacation property.

6.3 Regulatory Changes

Golden Visa programs are subject to changes in government policies. Fund-based options, being newer, may face more regulatory scrutiny or adjustments in the future.

7. Economic Impact of Fund-Based Golden Visas

The introduction of fund-based Golden Visa options has significant economic implications for host countries:

7.1 Capital Allocation

Fund investments allow for more strategic allocation of foreign capital into sectors that governments deem priority areas for economic growth. This can lead to more balanced economic development compared to concentrated real estate investments.

7.2 Job Creation

Many fund-based programs require investments in funds that support job creation or innovation. This can have a more direct positive impact on local economies compared to passive real estate investments.

7.3 Market Stability

By diverting some investment away from real estate, fund-based options can help mitigate the risk of property bubbles in popular Golden Visa destinations.

8. Future Trends in Golden Visa Programs

As Golden Visa programs evolve, we can expect to see several trends emerge:

8.1 Increased Diversification

More countries are likely to introduce fund-based options to diversify their Golden Visa offerings and attract a wider range of investors.

8.2 Focus on Sustainable Investments

There’s growing emphasis on funds that focus on sustainable and socially responsible investments, aligning with global trends towards ESG (Environmental, Social, and Governance) criteria.

8.3 Digital Nomad Integration

Some countries may explore integrating digital nomad visas with investment-based residency programs, catering to the increasing number of location-independent professionals.

8.4 Enhanced Due Diligence

As Golden Visa programs face increased scrutiny, we can expect more rigorous due diligence processes for both investors and fund managers.

9. Conclusion

The emergence of fund-based Golden Visa options represents a significant shift in the landscape of investment migration. By offering alternatives to traditional property purchases, countries are adapting to changing investor preferences and global economic trends. While fund investments come with their own set of considerations, they provide a compelling option for those seeking residency or citizenship through investment.

As the Golden Visa market continues to evolve, potential investors should carefully weigh the pros and cons of fund-based options against traditional real estate investments. The choice between property and fund investments will depend on individual financial goals, risk tolerance, and lifestyle preferences. Ultimately, the diversification of Golden Visa programs through fund-based options is likely to attract a broader range of investors and contribute to more balanced economic development in host countries.

10. FAQs

Q1: Are fund-based Golden Visa investments safer than property investments?

A1: Fund-based investments offer diversification, which can reduce risk compared to single property investments. However, they are still subject to market fluctuations and there’s no guarantee of returns. The safety of the investment depends on the fund’s strategy, management, and market conditions.

Q2: Can I live in the country if I choose a fund-based Golden Visa option?

A2: Yes, fund-based Golden Visa options typically grant the same residency rights as property-based options. However, specific residency requirements may vary by country and program.

Q3: What happens if the fund I invest in performs poorly?

A3: Poor fund performance could result in a loss of investment value. However, most Golden Visa programs guarantee your residency status as long as you maintain the required investment for the specified period, regardless of the fund’s performance.

Q4: Can I switch from a property-based to a fund-based Golden Visa investment?

A4: This depends on the specific country’s regulations. Some countries may allow you to switch your investment type while maintaining your residency status, but this is not universal. Always consult with legal experts before making such changes.

Q5: Are there any tax advantages to choosing a fund-based Golden Visa option?

A5: Tax implications vary by country and individual circumstances. In some cases, fund investments may offer tax advantages over property ownership, such as avoiding property taxes. However, you should consult with a tax professional to understand the specific implications for your situation.

Article reviewed by August Schmidt, Alternative Investments Expert | Diversifying Portfolios with Unique Assets, on March 22, 2025