While it is widely believed that migration is a thing of the poor looking for a better life, the rich and super-rich people often vote with their feet too.
The 2023 Private Wealth Migration Report issued recently by Henley & Partners, a global leader in tracking the residence and citizenship by investment, forecasts that more than 122,000 high net worth individuals (HNWIs) will change their domicile by the turn of this year. In 2024, their number will climb to 128,000.
HNWIs are defined as individuals with a net worth of at least 1 million US dollars.
The analysis, which reflects the ranking of ten biggest winners and ten biggest losers, anticipates that Australia will be the top preference for millionaires and billionaires (+5,200) and China will experience the worst outflow (-13,500).
The United Arab Emirates has been for years a sweet goal for wealthy individuals, thanks to its residence-for-investment program. In 2023, the report says, it will be dethroned to the second landing place (+4,500).
By region, the European Union remains the most attractive destination for the super-rich and Eurasia the least attractive. In Europe, only the United Kingdom is a loser (-3,200) as many millionaires chose to settle on the neighboring continent or in North America.
Investors love economic freedom
India, in spite of its exceptional economic performance, will see 6,500 super-rich parting ways with the country, and Russia – struggling with sanctions and waging a war in Ukraine – emerges as the 4th net loser.
Surprisingly, Hong Kong - which has a short processing time (4-8 months), linkage with the largest economy, and no minimum capital requirements for investors seeking residency there - is on the list of losers (-1,000).
In Russia, many wealthy individuals are facing personal tariffs and trade restrictions from Western countries due to the war in Ukraine.
China’s crackdowns on Hong Kong have made it a less interesting place for business. And finally, the UK’s exit from the EU has deprived many business people from the easy movement of labor, finances, and investment that made operations across European borders seamless.
By comparison, Singapore, a relatively close journey from Honk Kong, will welcome the arrival of around 3,200 deep pockets. The fact that Singapore is the most economically free market in the world is the key reason.
Henley & Partners notes that the political climate and market restrictions overweigh such considerations as over-regulation and taxation burden. The older European democracies like Italy, Greece, Portugal, France, or Spain, for example, are no tax heaven to businesses, but they all run very seductive visa-for-investment programs and enjoy economic freedom.
An EU passport is a lucrative gate opener all over the world, the authors suggest.
“The investment migration sector is fluid and dynamic. As one program closes or adjusts its offering, two more are launched and flourish. Our client base is as accustomed to change as the sector itself and continues to expand at unprecedented levels,” the report reads.
Although some countries offer better conditions – take for example Montenegro with no minimum investment and a month-long processing time – they were not considered for the ranking due to a small number of new wealthy settlers.
A 2022 report by Altrata, a data processing and intelligence company, emphasized that some of these countries may still be adding homegrown millionaires and billionaires, but losing thousands of HNWIs to net migration does have a considerable economic impact.
During the ten years of reporting, Henley & Partners has observed that - despite a decline during the Covid pandemic - the number of wealthy individuals leaving their countries of origin has been growing every year and governments keep inventing new incentives to win the hearts and minds of economic elites to their side.
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