Why Millionaire Migration Matters?

Approximately 142,000 of the world’s millionaires are projected to migrate to a new country in 2025, with the UAE, the USA, Italy, Switzerland, and Saudi Arabia topping the list of destinations.

The benefits of this migration of wealth and talent to these countries are wide ranging, and include:

• Forex revenue: Migrating millionaires are a vital source of forex revenue as they tend to bring wealth with them when they move to a new country. For instance, a migrant bringing USD 10 million is equivalent to a country generating USD 10 million in export revenue as both transactions generate USD 10 million of forex revenue for the country.
• New business: Many relocating high-net-worth individuals (around 15%) are entrepreneurs and company founders, who often start businesses in their new country, thereby creating local jobs. This percentage rises to over 60% for centi-millionaires and billionaires.
• Stock markets: Millionaires boost the local stock market via their equity investments. Also, some high-net-worth business owners may publicly list their companies on the local stock exchange.
• Job creation: Perhaps most importantly, high-net-worth individuals indirectly create thousands of well-paying jobs via their spending power, especially in high-value sectors such as luxury hotels, fine dining, luxury retail, high-end fashion, prime property, hi-tech, wealth management, and family offices.
• Multiplier effect: Inward wealth migration can have a multiplier effect on wealth growth due to the spillover effect on asset prices. For instance, 100 high-net-worth individuals moving to a country can result in its high-net-worth population increasing by well over 200 as it pushes local asset prices up and therefore drives up the wealth of locals living in that country.
• Boosts middle class: The businesses started by millionaires and billionaires have a significant positive spillover effect on the middle class as they create large numbers of well-paying jobs in their base country. Perhaps the best example of this is Microsoft, which has created thousands of jobs in the USA and has also contributed to America’s dominance in the global tech space for over 30 years.

The ‘Safe Haven 8’

The benefits of inward wealth migration are particularly noticeable in the leading safe haven markets of the world, namely, Switzerland, Singapore, the UAE, Malta, Monaco, New Zealand, Australia, and Mauritius, which have all positively transformed their economies by encouraging wealthy people to move there. Notably, foreign-born migrants now make up over 50% of the resident centi-millionaire populations in all of these countries.

For our purposes, a ‘safe haven’ is a country with high levels of safety and security that remains largely shielded from the world’s political and economic challenges.

Economic gauge

Millionaire migration figures are also a valuable indicator of a country’s economic health, especially when it comes to net outflows. If a country is losing large numbers of millionaires to migration, this often signals deeper underlying issues, as millionaires are typically among the first to relocate when conditions deteriorate. Such outflows can also be a warning sign for future economic challenges.

Common reasons why millionaires move

High-net-worth families choose to relocate for a range of reasons, including:

• Safety and security
• Financial concerns
• Taxes
• Retirement
• Work and business opportunities
• Lifestyle factors, including climate, nature, and scenery
• Schooling and education opportunities
• Healthcare
• Standard of living

Spotlight on taxes

Tax differentials between countries are often highlighted as one of the main drivers of the high level of millionaire migration that exists today. Capital gains tax and estate duty are traditionally the main taxes that wealthy people consider when migrating.

It is worth noting that most of the top destinations for millionaires globally do not impose estate duties. These include Australia, Austria, Bermuda, Canada, Cayman Islands, Costa Rica, Cyprus, Hong Kong, Israel, Mauritius, Malta, Monaco, New Zealand, Panama, Saudi Arabia, Singapore, and the UAE. In Italy and Portugal the rates are relatively low —4% and 10%, respectively, and several Swiss cantons also maintain low or negligible estate tax rates.

Notable jurisdictions with no capital gains tax include Bermuda, Cayman Islands, Hong Kong, Mauritius, Singapore, and the UAE, all of which are traditionally popular destinations for migrating millionaires, especially for those operating in the financial services sector.

Note:

The terms ‘millionaires’ and ‘high-net-worth individuals’ (HNWIs) refer to individuals with liquid investable wealth of USD 1 million or more.