When things starts to go wrong for a country, economically, politically, or socially, its wealthiest citizens are usually the first to know, and also the first to jump ship and migrate somewhere else, research from AfrAsia reveals.
The bank recently published its Global Wealth Migration Review for 2018, in which it argues that a trend of departing millionaires, billionaires, and mass affluents, is nearly always a sign that a country fortunes could be in decline. According to the reports authors:
“If a country is losing a large number of HNWIs to migration, it is probably due to serious problems in that country (i.e. crime, lack of business opportunities, religious tensions etc.). Conversely, countries that attract HNWIs tend to be very healthy and normally have low crime rates, good schools and good business opportunities. “
Unlike ordinary immigrants, who can be perceived by some sections of society as taking a toll on public services and claiming benefits without contributing enough to a country’s infrastructure and society in return, wealthy immigrants are generally welcome as they very rarely take jobs from locals, and almost never claim benefits, preferring to educate their children privately, use private healthcare, and pay for their own housing.
The report goes on to suggest that “in our view, the only possible negative of taking in a wealthy person is that they can push property prices up to levels that locals cannot afford.” Some might take issue with this statement, arguing that a wealthy immigrant could have the power to upset social norms, influence local politics, or deny locals access to public land by buying it up; such circumstances have pushed New Zealand, for example, to introduce a law preventing foreigners from buying property in the country (but not before some notable Silicon Valley billionaires bought huge estates in the country and even claimed citizenship).
Of the world’s 15 million High Net Worth Individuals (HNWIs), AfrAsia calculates that some 95,000 migrated in 2017. Their preferred destination? Australia, which attracted 10,000 HNWIs, followed by the US, 9,000, Canada, 5,000, and the United Arab Emirates, 5,000. The Caribbean, Israel, Switzerland, New Zealand and Singapore all attracted more than 1,000 wealthy immigrants.
In terms of net outflows, more wealthy Chinese left their country of birth than any other, although given China’s vast population of more than 2 billion, this represents a tiny percentage of the population, and may not reveal much about the state of the country’s economy, although it is worth remembering that the Chinese government has recently imposed strict controls on Chinese moving money overseas, which may have prompted some HNWI’s to skip town altogether.
Australia represents a convenient location for Asian HNWI’s as it puts them near to the original source of their wealth, has low inheritance tax, is safe, and provides a high standard of living. Compared to the US, AfrAsia notes, wealth has grown 83%, versus 20%. That said, the US is described as a “steady performer” when it comes to attracting the world’s wealthiest immigrants, and Australia is sometimes regarded as being too much of a “nanny state”, with complex rules and regulations, by some HNWIs.
In the UK, traditionally an attractive destination for incoming HNWIs, the country experienced its first ever net outflow in 2017, with some 5,000 wealthy citizens leaving, and only 1,000 HNWIs arriving. Factors that have affected this trend reversal may include the introduction of new taxes for non-doms, high inheritance taxes, rising crime, and, of course, the threat of Brexit.
AfrAsia cited the main reasons for HNWIs decision to migrate to be schooling, financial problems, lifestyle, safety, work and business opportunities, taxes, healthcare, religious tensions and overall standard of living.
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