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

India is likely to see an outflow of at least 6,500 high-networth individuals in 2023, slightly lower than last year’s figure of 7,500, according to the Henley Private Wealth Migration Report, 2023, which tracks wealth and investment migration trends worldwide.

‘Millionaires’ or ‘high-networth individuals’ (HNWIs) refer to those with investable wealth of $1 million or more. 

This places India as the country with the second-highest outflow of HNWIs globally, next only to China (net loss of 13,500). 

The report ranks the UK (3,200) and Russia (3,000 ­vs 8,500 in 2022 following its invasion of Ukraine) in third and fourth places, respectively. 

Why are millionaires relocating? 

Dominic Volek, group head of private clients at Henley & Partners, said: “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 programmes 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.”

The report cited India’s prohibitive tax legislation, coupled with convoluted, complex rules relating to outbound remittances open to misinterpretation and abuse as some of the issues that had triggered the trend of investment migration from the country.

Given India’s capacity to generate new millionaires, the outflows are not considered particularly alarming. Global wealth intelligence firm New World Wealth projects India’s HNWI population will experience a remarkable 80 per cent increase by 2031, positioning the country as one of the world’s fastest-growing wealth markets during the period. This growth will mainly be fuelled by the thriving financial services, health care, and technology sectors within the country. Interestingly, the firm observed a notable trend of affluent individuals returning to India, and as the standard of living continues to improve, it anticipated a significant influx of wealthy individuals moving back to India in greater numbers.

“With a current count of approximately 357,000 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 per cent of the total number of enquiries recorded the previous year, which in itself was a record year. We project this upward trajectory will continue this year, with Indian investors voicing the demand for alternative residences and additional citizenships,” said Rohit Bhardwaj, director, private clients, Henley & Partners India.

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

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

The UK is expected to see a net outflow of 3,200 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 before 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 sharp drop from 2019, when the country saw a net inflow of 10,800 millionaires.

Australia takes the lead in 2023 in net inflow of HNWIs

 

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

While the United Arab Emirates has dropped 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 US with an expected net influx of 2,100.

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 top 10, with its net inflow of millionaires expected to almost halve to just 600, compared with 1,100 in 2022.