New Delhi: India could be looking at an outflow of 6,500 high-net-worth individuals (HNWIs) this year, according to The Henley Private Wealth Migration Report 2023.
Compiled by London-based investment migration consultancy Henley & Partners, the report published Tuesday placed India second only to China, which has been seeing a record surge in outflow of millionaires since 2013.
Findings suggest that India expects an outflow of 6,500 HNWIs as against the actual outflow of 7,500 in 2022, indicating a lower outflow of millionaires than anticipated. This forecast for 2023 stood at 13,500 for China, 3,200 for the UK and 3,000 for Russia.
Sunita Singh Dalal, a partner at Private Wealth & Family Offices in Hourani in the UAE, in the report attributed this “trend of investment migration from India” to, among other issues, “prohibitive tax legislation coupled with convoluted, complex rules relating to outbound remittances that are open to misinterpretation and abuse”.
Dalal pointed out that Dubai — also referred to as the fifth city of India — and Singapore remain “preferred destinations for wealthy Indian families”.
In the case of Dubai, its global investor Golden Visa programme, “favourable tax environment, and robust business ecosystem” is what attracts Indian millionaires. Portugal too emerged as a recipient of “significant wealth from the Indian diaspora” despite its government’s decision to terminate the Portugal Golden Residence Permit Program.
Basing its forecast on data from the period between January to date, the report took into account countries and territories with net inflows or net outflows of 100 or more HNWIs who reported living in a new country for more than six months a year.
HNWIs are individuals with documented wealth of $1 million or more.
Data for the report was sourced from global wealth intelligence firm New World Health, which tracks migration trends and spending attitudes of high-net-worth individuals around the world.
Further, the report attributed the generation of wealth in India to conditions facilitated by “concentrated attention on economic advancement in diverse sectors, including infrastructure development and the emergence of technological startups”. It added that projections suggest an 80 per cent rise in India’s HNWI population in 2031.
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Australia, UAE preferred destinations
According to the report, private wealth migration trends are likely to revert to pre-Covid patterns in 2023, with Australia ranking first in net HNWI inflows. Andrew Amoils, head of research at New World Wealth, attributed this to Australia’s points-based immigration system, which he wrote “favours wealthy individuals and those with professional qualifications (accountants, doctors, engineers, hi-tech professionals, and lawyers)”.
Adding that approximately 82,000 HNWIs moved to Australia between 2002 and 2022, the report said identified ‘wide open spaces, safety and security, first-class healthcare system and excellent education opportunities’ as other factors contributing to this migration.
The UAE emerged as the second most preferred destination for high-net-worth individuals, followed by Singapore owing to their reputations “of being safe havens not only for living but also for preserving wealth”.
The report also highlighted that nine of the top 10 countries with the highest estimated net HNWI inflows in 2023 offer investment migration programmes and grant residence rights in exchange for foreign direct investment (FDI).
Dr. Juerg Steffen, the CEO of Henley & Partners, noted that outflow of HNWIs indicates a drop in confidence in a country since “high- and ultra-high-net-worth individuals have the means to leave and are usually the first to exit and vote with their feet when circumstances deteriorate”.
This, said the report, predominantly happens because of increased security, political and economic risks coupled with current volatility, which prompt the wealthy to diversify their domicile portfolios through investment migration.
It added that high-net-worth individuals are “looking for optionality to move to cities that are more resilient to climate change and that offer a good quality of life, and to put down roots in countries where their capital can be protected for many generations to come”.
More than 1,22,000 millionaires are expected to relocate globally by the end of this year followed by another 1,28,000 by the end of 2024, said the report, besides providing insights into how private wealth is distributed irregularly around the world.
(Edited by Amrtansh Arora)
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