Global markets are not what they were five years ago. In fact, they’re not what they were last year.
Historically, investors have looked to Europe as a bastion of stability. But watching the region navigate geopolitical tensions and the resulting ripple effects has forced them to reconsider their options.
The war in Ukraine has deepened economic fractures, with the US and EU drifting apart on everything from defense spending to trade policies. Plus, Trump is back in office, and US support for Ukraine is wavering. Europe has been left to shoulder more of the financial burden, and budgets are feeling the strain.
In this climate, more capital is being routed toward stable regions. Thanks to a booming real-estate market and investor-friendly policies, the Caribbean is a compelling alternative.
Geopolitical tensions are nothing new, but the growing divide between the EU and the US over Ukraine is becoming one of the most consequential in recent history. What began as a united front against Russian aggression is now unraveling.
At the start of the war, the US and EU stood in lockstep. They imposed sanctions and delivered billions in aid (which Donald Trump has now halted). Under the Biden administration, the US took the lead—organizing military support and funneling funds into Ukraine’s defense. Europe was a little slower to act but committed financial and military resources—all the while facing economic fallout.
But Donald Trump has returned to the Oval Office. The president’s skepticism toward continued US involvement in Ukraine reached a fever pitch during Ukraine President Volodymyr Zelenskyy’s disastrous visit to the White House in March 2025. Trump’s response sent shockwaves through Europe (and the world).
Sanctions were supposed to weaken Russia, but in reality, they hit Europe just as hard. Energy shortages, inflation, and economic uncertainty have left investors questioning whether the strategy is worth the cost.
For example, between 2010 and 2020, the Dutch TTF gas price hovered around €20 per MWh, but by March 2022, it had risen sharply to €345 per MWh—an all-time high. France allocated €45 billion between 2022 and 2023 to shield households from soaring energy costs.
What’s more, US-EU trade tensions are escalating. Trump’s tariffs and protectionist policies will strain economic relations further, and the EU will be forced to reduce its reliance on US economic ties.
Investors want stable and predictable opportunities, but Europe is unable to deliver. So they are looking elsewhere, and here’s why.
The war in Ukraine has pushed European markets into prolonged volatility, where inflation continues to spiral on an upward trajectory due to ongoing energy disruptions and supply chain issues.
Consumer inflation in Ukraine rose from 10% in early 2022 to a peak of 26.6% by October of that year. Germany, France, and Italy have all seen inflation rise too, this time driven largely by energy costs. Stagflation—a dangerous mix of economic stagnation and high inflation—could take hold if energy prices remain unstable.
As the US winds back its foreign policy priorities, European nations are forced to rethink defense spending. A stronger defense is crucial for regional security, but it also stretches national budgets thin.
Germany, for example, has pledged to increase defense and infrastructure spending to €1 trillion over the next decade. This kind of financial reallocation raises red flags for investors who want to see economic stability, not escalating military expenditures.
Foreign direct investment (FDI) into Europe declined by 7% in 2023, leaving more capital to flow toward stable and high-growth markets—including the Caribbean.
The Caribbean’s strong economic fundamentals are drawing increasing interest from those looking to hedge against European unpredictability.
Unlike Europe, which is experiencing growing political fragmentation, the Caribbean has remained relatively stable. Many Caribbean nations have strong economic ties to the US and Canada, which provide a level of financial security that investors find appealing.
The Caribbean’s projected GDP growth for 2025 is 2.5%, an improvement over the stagnant 0.5% average recorded between 2010 and 2019. The broader Latin America and Caribbean (LAC) region is also expected to grow at 2.5% in 2025—offering consistent, moderate growth potential.
Several Caribbean nations have minimal corporate, capital gains, and inheritance taxes, which makes them attractive tax havens for high-net-worth individuals and businesses.
The Cayman Islands, for example, impose a 0% corporate tax rate as long as businesses pay an annual license fee.
Tourism is back in full force, and the Caribbean real estate market is feeling the effects. Luxury beachfront properties are in high demand, and investors are paying attention.
Tourism in the Caribbean is forecast to expand at an annual rate of 5.3% between 2024 and 2029, surpassing pre-pandemic levels.
For investors weighing their options, here’s how the two regions compare:
European real estate has long been considered a safe bet. Recently, it’s become more volatile due to inflation and economic instability. In contrast, the Caribbean’s property market is experiencing steady growth. Between 2019 and September 2024, prices per square foot for prime secondhand villas in the Caribbean increased by 41%. Mainstream properties saw a 26% rise.
Europe’s rising living costs and stricter tax policies have made long-term property investments less attractive. At the same time, Caribbean nations are rolling out digital nomad visas and residency programs, so it’s easier for professionals to relocate and invest in real estate.
Predictions suggest that Europe’s investment climate will remain volatile for the foreseeable future. Inflation, energy insecurity, military spending, and rising tension will continue to challenge economic stability. Some investors may find niche opportunities in defense or renewables, but risk perception remains high.
The Caribbean’s investment appeal is growing. High-net-worth individuals and institutional investors turn to the region as a safe haven. Looking ahead, as beachfront property becomes scarcer, interest in more secluded, undeveloped Caribbean areas could lift. This will likely drive further real estate demand.
Diversification is more important than ever. For long-term financial security, it’s time to look beyond the usual investment hubs and explore emerging, stable markets like the Caribbean.
