From Our Bureau
NEW DELHI: Exodus of millionaires from the country is expected to continue as 6,500 high-net-worth individuals (HNWIs) are expected to migrate in 2023, according to the Henley Private Wealth Migration Report 2023, which tracks wealth and investment migration trends worldwide.
The reports is annually produced by London based Henley and Partners.
Dubai and Singapore remain preferred destinations for wealthy Indian families. Dubai, also known as the ‘5th City of India’, is particularly attractive for its government-administered global investor ‘Golden Visa’ programme, favourable tax environment, robust business ecosystem, and safe, peaceful environment,” say experts.
Interestingly, according to the report, recently, Portugal has also been a recipient of significant wealth from the Indian diaspora after Lisbon had announced its Golden Residence Permit Programme. It seems that the attractive permit programme has reached its maximum potential as the termination of the Portugal Golden Residence Permit Program was announced, which had attracted significant investment in Portuguese real estate and other ventures, experts point out.
China has been ranked first in terms of the outflow of millionaires from the country this year. It is predicted to lose 13,500 HNWIs, followed by India, which has secured second place. However, despite having the second biggest exit numbers in the report, India’s position is likely to improve since last year when its outflow of millionaires was 7,500. Andrew Amoils, Head of Research at New World Wealth points out, “these outflows are not particularly concerning as India produces far more new millionaires than it loses to migration.”
Juerg Steffen, CEO, Henley and Partners, says an increasing outflow of millionaires often points to a drop in confidence in a country as HNIs are usually the first to exit and vote with their feet when circumstances deteriorate. “Affluent families are extremely mobile, and their transnational movements can provide an early warning signal in terms of a country’s economic outlook and future country trends,” he notes.
Moreover, wealth migration trends are swinging back to pre-pandemic patterns with Australia reclaiming its top position for net inflows even as China continued to see the highest number of HNIs leave its shores. The report finds out that the highest proportion of wealthy families relocating this year are considering Australia, the UAE, Singapore, the USA, and Switzerland as their top preferences while the largest net outflows of millionaires are expected to come from China, India, the UK, Russia, and Brazil.
Importantly, nine of the top 10 countries attracting the most HNIs this year offer investment migration programmes, also known as golden visa programmes, as a magnet to attract foreign direct investment. “Singapore, Switzerland, and the UAE have all built their reputations on the premise of being safe havens not only for living but also for preserving wealth. They have also established themselves as highly attractive business hubs where companies can thrive in fiscally advantageous jurisdictions with favourable corporate tax rates as well as zero wealth and inheritance taxes,” the report says.
The report suggests that the number of HNIs departing from India has decreased and the number of HNIs leaving China and the UK has significantly increased on a year-on-year basis. “China continues to lose large numbers of millionaires to migration. General wealth growth in the country has been slowing over the past few years, which means that the recent outflows could be more damaging than usual. In particular, the banning of Huawei 5G by several major markets (USA, UK, and Australia) appears to have been a major blow for China, as much of the country’s future growth plan was based around its hi-tech sector,” the report highlights.
The report also mentions that around 12,500 millionaires left the UK between 2017 and 2022. Some reasons include high capital gains tax and estate duty rates, which are among the highest in the world, and the shrinking importance of the London Stock Exchange on the global stage.
