An unprecedented amount of foreign capital is focused on U.S. real estate markets, and it’s coming from every region of the world. People are paying the most attention to money from countries with no strong history of heavy investment, such as China, Korea and Middle Eastern countries. Also high on the list are Canada and Australia, two countries where investors have been active in the U.S. for many years.

But countries like the UK and Germany, which have been major sources of U.S. real estate capital in the past, were relatively quiet in 2014. One reason may be that these institutions see opportunity in their own backyards, where relapses into recession have scared off global investors looking for safe-haven cities. But going forward, there’s another reason why European investors may be wallflowers at the U.S. investment party: No one is allowed to ask them to dance.

The European Union’s Alternative Investment Fund Managers Directive (AIFMD) fully took effect in 2014, imposing a new set of requirements on non-EU real estate investment managers (REIMs). The requirements include full disclosure of expense and fee data to EU investors, in-depth reporting to EU regulators, and a “passport” to do business across the EU.

The purpose seems to be to protect European investors, including sophisticated institutions, against third-party solicitation, even from long-term partners with strong track records of honesty and accuracy. U.S. REIMs are scratching their heads trying to figure out the directive—for instance, a ‘reverse solicitation’ feature allows EU investors to buy U.S. properties if they approach REIMs rather than the other way around. But virtually no deal has been reported as a reverse solicitation in the past, so if every deal is now called a reverse solicitation, EU regulators may view this avenue as a sham to get around the law. Another challenge is that the passport to operate across the EU is still being worked out, so in the meantime REIMs must register in each individual EU country, of which there are 28 currently.

The timing of AIFMD doesn’t help, either. With so much foreign and domestic money in real estate right now, investment advisors don’t need to jump through Europe’s hoops to raise capital.

One European country is showing up on the list of top global investors. Norway has come out of nowhere to be the most active regional investor in U.S. real estate. But Norway is not a member of the EU, so it’s not subject to rules like AIFMD. Is that a coincidence?