The World's Richest Are Moving To These Countries
The global economy is worsening. All the signs are out there: There's a probability of a U.S. recession, macroeconomic stress in Argentina and Turkey, and disruptions to the auto sector in Germany, to name a few. According to the International Monetary Fund, we're experiencing a "significantly weakened global expansion." It's something the wealthy have noticed, and they've decided to act fast by moving to countries with better situations.
According to AfrAsia Bank and New World Wealth's Global Wealth Migration Review 2019, approximately 108,000 high net worth individuals (HNWIs) migrated in 2018 compared to 95,000 in 2017. Most of these HNWIs come from China, Russia, India, Turkey, France, the U.K., Brazil, Saudi Arabia, and Indonesia.
The report shows Australia is the favorite destination of the super-rich followed by the U.S. and Canada. The wealthy are drawn to Australia for its low crime rate, first world economy, first class healthcare system, growing economy, and tax rates—as a plus, Australia has no inheritance taxes.
The mass migration of HNWIs had been reported as far back as 2012. Back then, CNBC pointed to the rich's need for a change of scenery as the reason. While safety and lifestyle are still seen as two driving factors, Global Wealth Migration Review also cites escaping economic and political tensions as a rising factor. The other reasons why HNWIs leave their countries are financial concerns, schooling and education opportunities for their children, work and business opportunities, taxes, healthcare, religious tensions, and standard of living.
Though Turkey's millionaires placed fourth among the list of wealth outflows, it's ranking is alarming for a country that doesn't produce as many new millionaires as China and Russia. About 10 percent of the country's millionaires have fled due to political instability, mass protests, rising living costs, and high inflation. The U.K. had long been favored by the super-rich but due to Brexit, it's seen a decline with about 7,000 HNWIs moving to other cities such as Sydney, Melbourne, New York, Geneva, and San Francisco.
Migration has been a service several financial advisory firms offer through investor visa programs. Referred to as a golden visa, these programs require an investment of $300,000 to $3 million in property, bonds, or businesses. In turn, wealthy individuals are given citizenship or residence visas. However, according to the report, only 30 percent of HNWIs go through this route. The most popular methods still include second passports, work transfers, ancestry visas, spousal visas, and family visas.