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Why are wealthy people leaving India? What are global trends and its economic impact?

Everyone in India must have thought to go abroad if not to settle but to go on a vacation. But how about if you come to know that the wealthy people of a nation are preferring other countries to live rather than their homeland? It is a point of concern because it indicates that the country is not able to retain its wealthy people to stay in the country and contribute to the development of the country apart from the taxes that their businesses pay to the local government.

The Henley Private Wealth Migration Report 2024, released in June 2024 by international investment migration advisory firm Henley & Partners has indicated that the UK is expected to see an unprecedented net loss of 9,500 millionaires in 2024 after the Chinese who also are leaving China in largest amount.

As per the Henley report, China has been ranked as the top in the global ranking of countries with the highest number of millionaire emigrants, as an estimated 15,200 High networth individuals (HNWIs) are expected to leave the country this year (2024) (compared to 13,800 in 2023). Meanwhile, India has managed to curb its wealth outflow, dropping to the 3rd position after the UK, with only 4,300 millionaires projected to depart in 2024 (compared to 5,100 in the previous year). South Korea is anticipated to see an increase in HNWI emigration, with a predicted loss of 1,200 millionaires (compared to 800 in 2023). On the other hand, the wave of millionaires leaving Russia following the Ukraine war seems to be slowing down, with only 1,000 expected to relocate this year (compared to 8,500 in 2022 and 2,800 in 2023).

But where are these people going?

According to the report, the first preference is UAE who will take first place as the world’s leading wealth magnet with around 6,700 moneyed migrants expected to make the UAE their home by the end of the year, and majority of them will be from UK and Europe.

Why UAE is the preference for so many wealthy people?

Due to the absence of income tax, availability of golden visas, luxurious lifestyle, and strategic location, the UAE has solidified its position as the top global destination for wealthy migrants and is expected to receive a record net inflow of 6,700 individuals this year. With continuous high levels of migration from India, the broader Middle East, Russia, and Africa, the projected increase in the number of British and European migrants indicates that the UAE will attract nearly double the number of millionaires compared to its closest competitor, the US, which is forecasted to welcome 3,800 millionaires in 2024.

Singapore once again secures the 3rd position this year, with net inflows of 3,500. Following closely behind are the perennially popular destinations for migrating millionaires, Canada and Australia, ranking 4th and 5th with net inflows of 3,200 and 2,500 respectively. Making their way into this year's Top 10 for net millionaire inflows are European favorites Italy (+2,200), Switzerland (+1,500), Greece (+1,200), and Portugal (+800). Additionally, Japan is set to welcome 400 wealthy migrants, benefiting from the increasing trend of Chinese HNWIs moving to Tokyo post-Covid.

The report also pointed out that, the UK, and London especially, has traditionally been seen as one of the world’s top destinations for migrating millionaires and for many years (from the 1950s to early 2000s) it consistently attracted large numbers of wealthy families from mainland Europe, Africa, Asia, and the Middle East. Around ten years ago, a shift in this pattern emerged as an increasing number of millionaires started departing the country while fewer arrived. It is worth mentioning that between 2017 and 2023, following the Brexit decision, the United Kingdom witnessed a significant loss of 16,500 millionaires due to migration. The provisional estimates for 2024 are even more alarming, projecting a substantial net outflow of 9,500 millionaires for this year alone.

According to the W15 ranking of the world’s top 15 countries for millionaires published in the report, the number of millionaires in the UK has dropped by 8% over the past decade, while soaring elsewhere. In Germany, the HNWI population has increased by 15% over the last 10 years, in France it’s up 14%, while the number has risen by 35% in Australia, 29% in Canada, and an astonishing 62% in the USA. These growth rates are of course a product of several factors including new business formation, local stock market gains and prime property trends in each country, with millionaire migration also being a significant contributing factor, especially in the case of the Safe Haven 8.

What is impact of this migration?

The investment migration sector is experiencing a significant boost due to the increase in millionaire migration.

The migration also poses threat of economic loss and brain drain for the country who face emigration.

There might also be social, cultural in the countries they locate in, but since they are wealthy people so these things happen quite less, as it is said money solves half the problems in todays world.

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