Millionaires are flocking in their thousands to these countries – here’s why
Millionaire migration can be a telling sign regarding the state of a given economy, and approximately 16,800 ultra-wealthy people are moving from their home countries to attractive destinations such as Australia, the UAE, Singapore, the USA, and Switzerland in 2023.
This is according to the Henley & Partners private wealth migration report for 2023, which highlighted the top five migration destinations for high-net-worth individuals (HNWIs), how many of these wealthy people they are expected to attract, and the reasons why HNWIs find these countries attractive in 2023.
HNWI are defined as people who have a net worth of over US$1 million (approximately R18 million as of July 2023).
The report noted that millionaire migration figures are a good indication of the health of an economy, as wealthy people are extremely mobile and tend to be the first to move when the need arises.
The countries that consistently attract affluent families through migration tend to be economically robust and usually have low crime rates, and offer attractive business opportunities.
South Africans leaving
According to Henley & Partners’ data, South Africa saw 400 HNWIs emigrate in 2022, with 500 expected to leave in 2023.
Comparatively, the latest African Wealth Report for 2023 shows that South Africa was home to 37,800 US dollar millionaires at the end of 2022, down from 39,300 recorded at the end of 2021 – a loss of 1,500 HNWIs.
If only an estimated 400 of these HNWIs emigrated that year, the remaining 1,100 millionaires simply lost their millionaire status, seeing their net worth drop below the US$1 million mark due to the prevailing economic conditions in the country.
For reasons as to why wealth destruction occurs in the country, Investec economist Lara Hodes said rich and skilled South Africans are leaving the country because of very poor governance and service delivery that has led to crime, load shedding, political uncertainty, and harsh economic challenges.
This is the same for other global millionaires who are fleeing their home countries, particularly China, India, the UK, Russia, and Brazil, and instead are looking for political stability, low taxation, personal freedom and safety, and to protect their lifestyles, wealth, and legacies.
The countries HNWIs are migrating to
The same reasons that force HNWIs to leave their home countries, including in South Africa, are also what makes other countries very attractive.
According to the report, Australia is expected to be the top destination for HNWIs – due to its favourable weather, first-class healthcare system, advanced economy, and safety and security (which ranked as one of the safest countries in the world).
The second destination is the United Arab Emirates (UAE) for its low tax rates, luxury lifestyle and real estate, quality international education system, and all-year-round leisure activities. It is also one of the main destinations for migrant South Africans.
Following the UAE is Singapore (3rd), the United States of America (4th), and Switzerland (5th).
The report noted that Singapore is the top wealth management centre in Asia, while its major drawcard – especially for tech entrepreneurs – is the fact that the city-state positions itself to rival Tokyo and Shenzhen to become the “Silicon Valley of Asia”.
This is the same reason for the attraction to the USA, which see successful tech start-up entrepreneurs often move to the country (Silicon Valley especially) to take their companies to the next level. Interestingly, the USA is attracting a lot of HNWIs from Asia, while others involved in entertainment and financial services also choose the States.
Rounding off the top five countries, Switzerland shows that the country’s enduring appeal lives on. While taxes are quite high in the country, this is outweighed by the level of service delivery, the clean and preteen environment, as well as still being the safest country on earth.
These top five countries and how many HNWIs they are expected to attract in 2023 are listed below.
1. Australia
- Net inflow expected in 2023: 5,200 HNWIs
2. United Arab Emirates (UAE)
- Net inflow expected in 2023: 4,500 HNWIs
3. Singapore
- Net inflow expected in 2023: 3,200 HNWIs
4. The United States of America (USA)
- Net inflow expected in 2023: 2,100 HNWIs
5. Switzerland
- Net inflow expected in 2023: 1,800 HNWIs
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