India to lose 6,500 millionaires in 2023, Dubai and Singapore top choice

India is likely to see at least an outflow of at least 6.500 high net wirth individuals in 2023, slightly lower than last year's outflow of 7,500 millionaires, , according to the Henley Private Wealth Migration Report 2023 which tracks wealth and investment migration trends worldwide.

 This places India as the second-largest country in terms of HNWI outflow globally, following China (net loss of 13,500). 

The report further ranks UK (3,200) and Russia (3000 ­vs 8,500 in 2022 following its invasion of Ukraine) in third and fourth  and place respectively. 

Why are millionaires leaving India? 

“Recent and persistent turmoil has caused a shift — more investors are considering relocating their families for a range of reasons, from safety and security, to education and healthcare, to climate change resilience and even crypto-friendliness. It is important to note that nine of the Top 10 countries for forecast net HNWI inflows in 2023 host formal residence by investment programs that encourage foreign direct investment in return for the right to reside, which can also lead to citizenship in some cases. Investors see the clear value of diversifying their domicile portfolios as the ultimate hedge against both regional and global volatility, now and in the future," said  Dominic Volek, Group Head of Private Clients at Henley & Partners.

India's prohibitive tax legislation coupled with convoluted, complex rules relating to outbound remittances that are open to misinterpretation and abuse, are other issues that have triggered the trend of investment migration from India, said the report.

Dubai and Singapore remain preferred destinations for wealthy Indian families. The former, also known as the “5th City of India,” is particularly attractive for its government-administered global investor “Golden Visa” programme, favorable tax environment, robust business ecosystem and safe, peaceful environment.

Millionaire outflow not very concerning

Given India's capacity to generate new millionaires, the outflows are not considered particularly concerning. New World Wealth projects that high-net-worth individual population is projected to experience a remarkable 80% increase by 2031, positioning India as one of the world's fastest-growing wealth markets during this period. This growth will mainly be fuelled by the thriving financial services, healthcare, and technology sectors within the country. Interestingly, the firm has observed a notable trend of affluent individuals returning to India, and as the standard of living continues to improve, it anticipates a significant influx of wealthy individuals moving back to India in greater numbers.

 “With a current count of approximately 357,000 high-net-worth individuals (HNWIs) residing in the country, India showcases a robust wealth presence. Asia is home to various wealth hubs and just this year, the number of enquiries received from South Asia in the first four months of 2023 already accounted for 72.2% of the total number of enquiries recorded the previous year which in itself was a record year. We project this upward trajectory to continue this year, with Indian investors voicing the demand for alternative residences and additional citizenships," said Rohit Bhardwaj, Director - Private Clients at Henley & Partners India.

The report  exclusively features the latest forecasts of net inflows and outflows of US dollar millionaires, as projected by global wealth intelligence firm New World Wealth, which has been tracking global wealth migration trends for over a decade. 

Portugal golden visa most popular in 2023
Portugal’s Golden Residence Permit Program  has been the most popular overall in 2023, followed by Austria’s citizenship by investment offering and St. Kitts and Nevis’s Citizenship by Investment Program.

 Next is Canada’s Start-Up Visa Program, the fastest way for entrepreneurs and wealthy individuals to access Canadian residence and the North American market. 

Rising in popularity this year and last in the top five is Italy’s Residence by Investment Program, with Greece’s Golden Visa Program and Spain’s Residence by Investment Program hot on the heels of their Mediterranean counterpart.

China loses largest number of dollar millionaires
As it has for the past decade, China continues to lose the largest numbers of dollar millionaires each year to migration. Andrew Amoils, Head of Research at New World Wealth, said  that “general wealth growth in China has been slowing over the past few years, which means that the recent outflows could be more damaging than usual. China’s economy grew strongly from 2000 to 2017, but wealth and millionaire growth in the country has been negligible since then (when measured in US-dollar terms)”.

Brexit a bad bet for Britain, and US appeal waning 

The UK is expected to see a net outflow of 3,200 high-net-worth individuals (HNWIs) in 2023 — higher than the projected 3,000 net loss for Russia. The UK’s peak net outflow year was 2017, following the Brexit referendum in 2016. Prior to this, the country enjoyed net positive inflows of HNWIs. While net losses dropped slightly between 2017 and 2019, the 2023 forecast indicates a far more significant millionaire exit is currently underway.

The appeal of another financial giant, the US, is also dwindling fast. 

America is notably less popular among migrating millionaires today than pre-Covid, perhaps owing in part to the threat of higher taxes. The country still attracts more HNWIs than it loses to emigration, with a net inflow of 2,100 projected for 2023, although this is a staggering drop from 2019 levels, which saw a net inflow of 10,800 millionaires.

Australia Takes the Lead in 2023 in net inflow of HNWIs
 

Australia is expected to attract the highest net inflow of HNWIs in 2023, with 5,200 millionaires projected to relocate there. 

While the United Arab Emirates drops to second place after a record-breaking influx in 2022, it is still set to experience a significant net arrival of 4,500 new millionaires this year. Singapore ranks third with a net inflow of 3,200 HNWIs, its highest on record, followed by the United States with an expected net influx of 2,100 millionaires.

Switzerland (net inflow of 1,800) and Canada (1,600) occupy the fifth and sixth positions, respectively.

Greece (1,200), France (1,000, doubling last year's net intake of 500 millionaires), Portugal (800), and New Zealand (700) also make it to this year's Top 10 list for net HNWI inflows. However, Israel is predicted to drop out of the Top 10, with its net inflow of millionaires expected to almost halve to just 600, compared to 1,100 in 2022.

Popular investment migration pathways

Portugal’s Golden Residence Permit Program remains the most popular overall in 2023, followed by Austria’s citizenship by investment offering and St. Kitts and Nevis’s Citizenship by Investment Program. Next is Canada’s Start-Up Visa Program, the fastest way for entrepreneurs and wealthy individuals to access Canadian residence and the North American market. Rising in popularity this year and last in the top five is Italy’s Residence by Investment Program, with Greece’s Golden Visa Program and Spain’s Residence by Investment Program hot on the heels of their Mediterranean counterpart.

 Indians and Americans are the top two nationalities driving demand for enquires about investment migration programmes. said Henley & Partners. The lessons for those who hope to attract HNWIs are clear- “Political stability is the key metric for those selecting where they want to live, together with low taxation regimes and personal freedom," said Misha Glenny, award-winning journalist and Rector of the Institute for Human Sciences in Vienna.