Traditional wealth centers wane, others gain as geopolitics rage

The United Kingdom and the United States have lost their appeal as places to live for millionaires, while Singapore, Israel, Australia and the United Arab Emirates, among others, are becoming more attractive, according to a report.

A report on how wealthy people move around the world predicts that the United Arab Emirates will overtake the United States in attracting the largest net inflows of millionaires this year.

By contrast, the UK has lost its status as a wealth hub, having recently discontinued its “golden visa” system, according to Henley & Partners, a consultancy on citizenship-residence schemes by investment.

The second quarter report examines the projected net inflows and outflows of dollar millionaires for 2022 – it tracks the difference between the number of wealthy people who move and the number who emigrate from a country.

Unsurprisingly, Russian millionaires have fled the country, with an expected net outflow of 15,000 by the end of 2022, 15% of its individual HNW population and 9,500 more than in 2019, before the pandemic, according to The report.

Russia’s invasion of Ukraine is also pushing HNW out of Ukraine, which is expected to suffer its highest net loss in the country’s history – 2,800 millionaires (42% of its individual HNW population) and a net loss 2,400 more than in 2019.

The top 10 countries in terms of net inflows of millionaires this year will be the United Arab Emirates, Australia, Singapore, Israel, Switzerland, the United States, Portugal, Greece, Canada and New Zealand. A large number of millionaires are also expected to settle in Malta, Mauritius and Monaco.

In contrast, the 10 countries with the highest net HNW outflows predicted are Russia, China, India, Hong Kong, Ukraine, Brazil, UK, Mexico, Saudi Arabia and Indonesia.

“By the end of the year, 88,000 millionaires are expected to have moved to new countries, down 22,000 from 2019 when 110,000 moved. Next year, the largest migration flows of millionaires on record are predicted – 125,000 – as well-to-do investors and their families prepare in earnest for the new post-Covid world, with a yet-to-be-revealed rearrangement of the world order, and the ever-present threat of climate change as a constant backdrop,” said Dr. Juerg Steffen, CEO of Henley & Partners.

The UK is losing its luster
The UK has seen a steady loss of millionaires, with net outflows of 1,500 forecast for 2022. This trend began five years ago when the Brexit vote and rising taxes saw more wealthy people leave the country to enter for the first time. The UK has suffered a total net loss of around 12,000 millionaires since 2017.

The appeal of another financial giant, the United States, is also rapidly waning. America is significantly less popular among migrant millionaires today than before the pandemic, perhaps in part because of the threat of higher taxes, the report said.

However, the United States still attracts more HNWIs than it loses to emigration, with a net influx of 1,500 projected for 2022, although this is a sharp drop from 86 % compared to 2019 levels, which saw a net inflow of 10,800 millionaires.

The winners
Net inflows of wealthy people are on the rise in Israel, with a figure of 2,500 forecast for 2022 – a 79% increase since 2019.

In other details, more than 80,000 millionaires (in US dollars) have moved to the country over the past 20 years. In 2022, the net influx is expected to be 3,500 – the second highest in the world. Neighboring New Zealand is expected to receive a net inflow of 800 wealthy people in 2022, and Asia’s main wealth center Singapore continues to attract millionaires, with net inflows of 2,800 expected – a prolific increase of 87 % from 2019 figure of 1,500.

Wealth emigration is starting to hurt in China, with net outflows of 10,000 wealthy people expected in 2022.

In Hong Kong (SAR China), outflows of high net worth individuals continue, albeit at a slower pace, with projected net millionaire outflows of 3,000 in 2022 (a 29% decline from 2019).

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