The world’s rich are voting with their feet, with China, Indonesia and Russia losing their wealthy to more attractive destinations.
High net worth (HNW) individuals, or those with at least US$1 million in assets, are on the move again after a pandemic-induced hiatus, although migration hasn’t yet reached pre-Covid levels, according to wealth manager Henley & Partners’ Global Citizens report for the second quarter.
«By the end of the year, 88,000 millionaires are expected to have relocated to new countries, which is 22,000 fewer than in 2019, when 110,000 moved,» Juerg Steffen, CEO of Henley & Partners, said in the report. «Next year, however, the largest millionaire migration flows on record are predicted — 125,000 — as droves of affluent investors and their families earnestly prepare for the new post-Covid world, with a yet-to-be revealed rearrangement of the global order, and the ever-present threat of climate change as a constant backdrop.»
Economic Indicator
Steffan noted that the movement of millionaires can be a key economic indicator as outflows point to a loss of confidence in a country, while inflows bring host countries their wealth, their businesses and their taxes.
China is among the biggest losers of millionaires, with around 10,000 expected to hit the road, the report said, noting that was only around 1 percent of the mainland’s HNW population. But it added, with general wealth growth in China slowing, the outflows may now be more damaging.
Russian Exodus
But that may be a drop in the bucket compared with Russia, which is likely «hemorrhaging» around 15,000 HNWs this year, or around 15 percent of its millionaires, the report said.
«Affluent individuals have been emigrating from Russia in steadily rising numbers every year over the past decade, an early warning sign of the current problems the country is facing. Historically, major country collapses have usually been preceded by an acceleration in emigration of wealthy people, who are often the first to leave as they have the means to do so,» the report said.
Russia is currently mired in a raft of sanctions amid international condemnation of its invasion of Ukraine.
For Southeast Asia, the report said Indonesia is projected to lose around 1 percent of its HNWs this year, or around 600 U.S. dollar millionaires – a U.S. dollar is buying nearly 15,000 rupiah, so it only takes around US$68 to be a local-currency millionaire.
Packing the Moving Van
After the rich load up the moving van, where are they headed?
Largely, countries such as wealth hubs U.A.E., Singapore and Switzerland, as well as Israel, Greece, Australia and the U.S., the report found.
«Countries that draw affluent individuals and families to migrate to their shores tend to be robust, with low crime rates, competitive tax rates, and attractive business opportunities,» Andrew Amoils, head of research at New World Wealth, said in the report.
Singapore’s Draw
Southeast Asian financial hub Singapore has remained Asia’s top destination for millionaires, with a net inflow of around 2,800 this year, the report said.
The U.S., however, appears to be losing its shine, amid a complicated health insurance system and concerns over crime, with the pace slowing to only a net inflow of 1,500 projected for this year, the report said.
The methodology for the data used investment migration program statistics in some countries, regular interviews with intermediaries and advisors, such as wealth managers, tracking HNWs movements in the media and real estate purchases.
