Wealthy Migration Surge: Why Rich Are Leaving & What It Signals

Almost everyone who is supposed to leave has done so, and the wealthier one is, the more inclined they are to immigrate, a trend observed among the global rich. Data indicates that over the past decade since 2013, the number of wealthy individuals choosing to emigrate has been on the rise, with a sharp increase in the first half of 2024. Why do the affluent seek to move abroad, and where do they prefer to relocate?

Recently, the renowned British consulting firm Henley & Partners released a report on the migration of the wealthy's wealth, stating that this year, 135,000 high-net-worth individuals globally will opt for immigration. Despite the seemingly small number, the criteria for inclusion are not easily met by the average person. The so-called high-net-worth individuals must have liquid assets of at least one million US dollars. In other words, even if one possesses hundreds of millions of dollars in real estate and stocks, without sufficient cash on hand, they cannot meet this threshold. Under such stringent conditions, 135,000 individuals still choose to emigrate. Where do these people come from, and where do they prefer to go?

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The top ten countries of origin for these migrants are China, the United Kingdom, India, South Korea, Russia, Brazil, South Africa, Nigeria, and Vietnam. Among them, Mainland China suffers the most severe loss of millionaires, with an expected outflow of 15,200 high-net-worth individuals this year, a 13% increase from last year, which is 1.6 times and 3.5 times that of the UK and India, respectively.

It is worth mentioning that the UK, as a traditional developed country, has managed to secure the second spot on the list, with an unstoppable pace of wealthy individuals leaving the country. Last year, 4,200 individuals departed, and this year, the number has reached 9,500. This aligns with the news we see about riots and fiscal bankruptcy in the UK.

Looking at the top ten destinations favored by the wealthy, in addition to the commonly heard Canada, Australia, and Switzerland, the United States, and Asian countries like Singapore and Japan are also on the list. Surprisingly, the United Arab Emirates in the Middle East ranks first. This year, it is expected to welcome 67,000 wealthy individuals, nearly double that of the United States in second place. It is noteworthy that Japan, which was in the top ten for wealthy individuals leaving last year, has now made it onto the list of those entering. The data also shows that while the locations from which the wealthy depart are quite dispersed, the destinations they choose are relatively concentrated, confirming that the wealthy indeed have similar tastes.

Some might argue that the wealthy can enjoy life anywhere with their money. What exactly prompts these wealthy individuals to go through the trouble of choosing to immigrate?

According to statistics, there are four main reasons for wealthy individuals to immigrate. First and foremost, it is to gain better development opportunities. Who would嫌 money too much? When your wealth is substantial, your options expand. The vast majority of wealthy immigrants seek broader market opportunities.A quintessential example is the 2016 United Kingdom referendum that decided to leave the European Union, and by 2020, it completed the severance with the EU in various aspects such as economy and society. Many large corporations and financial institutions, in order to retain the vast European market, chose to relocate their headquarters from London, UK, to cities like Paris, France, and Dublin, Ireland. With businesses moving, would the wealthy behind them remain indifferent? Precisely for this reason, many commentators have said that Brexit is an act of economic self-harm.

In addition to development, the second reason for the wealthy to immigrate is to escape war and natural disasters. Following the outbreak of the Russo-Ukrainian War, the number of wealthy immigrants from Ukraine and Russia surged, especially in 2022 when Putin announced the conscription of 300,000 reservists, leading to a mass exodus of Russian oligarchs, many of whom went to the United Arab Emirates and Turkey.

It is a universal truth that self-preservation is paramount, and fleeing war is a natural human instinct. However, even in the absence of war, some wealthy individuals still seek ways to ensure their personal safety. In recent years, some American billionaires have been concentrating on purchasing luxury homes in New Zealand. Beyond investment, these individuals are constructing basements and shelters in their mansions, complete with dedicated caretakers and stockpiles of food, energy, and other strategic supplies. Peter Thiel, the founder of PayPal, is a prime example. Even the wealthy worry about the end of the world. Why choose New Zealand? It is far from other continents, rich in energy and resources, making it an ideal refuge. Even in the event of a nuclear war, these billionaires, sheltering in their self-built bunkers, need not worry.

The third driving force behind wealthy immigration is related to tax avoidance. Tax policies vary from country to country, and generally, the wealthier you are, the more tax you pay. Therefore, if one can choose a destination with a lower tax rate, it can save a significant amount of money. This is why the United Arab Emirates has quietly attracted so many wealthy individuals in recent years, as there is no personal income tax, and during the early stages of business when profits are low, there is no need to pay taxes. In stark contrast, after government changes, both the United States and France have introduced high taxes targeting the wealthy. In 2010, Obama reformed policies to impose global taxation on those holding green cards, even if they are not in the United States. France went even further in 2012 by introducing a 75% tax on those with million-dollar incomes, which scared the French首富, the boss of LVMH, into considering leaving.

In addition to the three main reasons mentioned above, wealthy individuals also consider other policies when immigrating, which often varies from person to person. For example, some people immigrate for the education of their offspring and may choose countries with well-established education systems like the United States or Switzerland. Some countries and regions, in an effort to attract wealthy individuals, have introduced targeted policies. For instance, when virtual currencies were booming a few years ago, many countries enacted strict regulatory laws, but the United Arab Emirates went against the trend, attracting many cryptocurrency heavyweights to take Emirati nationality. Zhao Changpeng, the richest Chinese person, is a typical example.

Overall, the influx of wealthy individuals into a country is generally more beneficial than detrimental. The wealthy have more funds for consumption and investment, which can stimulate local economic development. Some wealthy individuals not only immigrate themselves but also bring their businesses, creating jobs locally. Conversely, the outflow of wealthy individuals often takes away a significant amount of local wealth. To prevent the loss of the wealthy, some countries have imposed high exit taxes or immigration taxes.

However, there are exceptions to everything. If too many wealthy individuals migrate to a country or region, it may cause wealth congestion, driving up local housing and commodity prices. Singapore is the best example of this. Since 2022, there has been a surge in wealthy individuals immigrating to Singapore, causing local housing prices to soar. It used to be said that Hong Kong was a land of gold, with housing in short supply. Now, Singapore's housing prices have surpassed Hong Kong's, becoming the most expensive in the world, placing a great burden on the lives of locals. The government has had to introduce new policies, such as imposing stamp duty on foreigners purchasing property in Singapore.

There is a wealth of information behind wealthy immigration. As the global economic landscape changes and unprecedented changes unfold, such migratory trends will continue, and competition between countries will become even more intense. If there are any omissions in the reasons why the wealthy choose to immigrate, please feel free to add your thoughts in the comments section!