Where millionaires are moving to (and why) might surprise you. According to a new study by New World Wealth, more high net worth individuals moved to Australia last year than to any other country. This was the second year in a row wealthy people favored the land Down Under over their second and third choices: the U.S. and Canada. The study considered only millionaires who physically moved from one country to another for at least six months and defines “millionaire” as someone with $1 million or more in assets (not including his or her primary residence). (For more, see The Great Millionaire Migration.)
Where Millionaires Are Moving
In 2016 11,000 millionaires moved to Australia, 10,000 to the U.S., 8,000 to Canada, 5,000 to the United Arab Emirates and 4,000 to New Zealand, accounting for the top five destinations. In 2015 64,000 moved to another country, while in 2016 the total was 82,000. That’s a net increase of more than 28%.
Although the U.S. came in second as a millionaire destination for the second year in a row, New World Wealth’s head of research, Andrew Amoils, doesn’t believe this country will see their number decline anytime soon. “We don’t think the new leadership in the U.S. will have a big impact. We expect another big net inflow of high net worth individuals into the U.S. in 2017,” Amoils told CNN.
Why They Move
With so many wealthy individuals on the move, it’s not surprising that their reasons are varied. Education (for family members) and personal safety are the two most frequently stated reasons for emigrating, according to New World Wealth. Others include climate, healthcare and business opportunities. This is especially true for high net worthindividuals moving to Australia from China, South Korea and India.
One of the least important reasons for millionaire migration is taxes (except in France – see below). Most wealthy people are concerned about living in stable countries with financial systems that can protect their wealth, even if income taxes are higher than in their birth country.
The Rich Can (and Do) Live Anywhere
The increasing number of high net worth individuals who migrate highlights an aspect of wealth noted by Reaz H. Jafri of Withers Worldwide, a law firm that assists wealthy clients who want to relocate. “The wealthy today don’t have a country,” Jafri told The New York Times. “They don’t view their success as being related [to] or dependent on a single country, but on their own business strategies. It’s amazing to me how many of the very wealthy are going totally mobile.”
Countries Left Behind
Australia’s gain, of course, is another country’s loss. The most frequent loser in 2016 was France, which saw 12,000 wealthy citizens leave it last year. China, with 9,000 emigrants, was next, followed by Brazil at 8,000. Rounding out the top five countries for millionaire decline were India and Turkey, with losses of 6,000 millionaires each.
As for exit impetus, those leaving France cite high taxes and religious tensions as the main reasons for their exit. Recent terror attacks may be a contributing factor to the latter. It’s worth noting that rich people leaving France don’t do so for education and personal safety, the norm for most of the rest of the world. No matter the reasons, countries such as France and China care about these losses, because when millionaires leave, in most cases they take their wealth with them. The impact on the local economy is noticeable.
The wealthy have an advantage not enjoyed by most immigrants. Visa programs for investors, also known as “golden-ticket visas” and officially called the special investor visa, are becoming increasingly popular with millionaires, who have the ability and inclination to invest in their new homeland. Strangely, so far at least, only one in five migrant millionaires uses these programs, the rest favoring the more traditional work transfers, second passports, ancestry visas, spousal visas or family visas.
Countries with attractive golden-ticket visa programs include Australia, which requires a $3.8 million investment, and the United States, with a $500,000 investment requirement. Canada recently dropped its main investor-visa program but retains others, which are used mainly by wealthy Chinese immigrants. (For more, see Getting a U.S. Visa for Entrepreneurs & Investors.)
The Bottom Line
By the end of 2016 13.6 million high net worth individuals with total accumulated wealth of $69 trillion lived somewhere on the planet. As noted above, the rich have greater freedom to live where they want. Although millionaires don’t care as much about tax rates as they do about access to education, personal safety and wealth protection, countries where they live do care. Wealthy individuals support the economy of their country of residence by paying taxes and through investments. As long as that is the case, where millionaires are moving to will continue to matter.