Almost 4,500 millionaires are expected to relocate to the UAE in 2023, making it the world’s second most popular country for relocation among high-net-worth individuals (HNWIs), as per a latest study.
Australia has emerged as the most preferred destination for the HNWIs, with 5,200 millionaires around the globe choosing it as their home, according to the same report.
The net HNWI inflow to the UAE in 2023 will surpass the 2022 tally, which saw 4,000 arrivals, the Henley Private Wealth Migration Report 2023 said.
Moreover, the crisis-ridden United Kingdom, whose economy has been performing poorly among its G7 peers, will see a larger net exodus of millionaires than Russia in 2023 as HNWIs are warry about the European country’s post-Brexit economic landscape as well as a government policy change that has removed permanent non-domicile tax status.
Almost 3,200 millionaires are expected to leave the UK this year, while 3,000 are expected to exit Russia. Growth engines of Asia, China and India too will see departures of HNWIs, with net losses of 13,500 and 8,000 millionaires respectively.
The total number of millionaires leaving the UK is expected to double, as 1,600 left in 2022, the Henley Private Wealth Migration Report said.
The study has placed Singapore in the third rank (in terms of millionaires’ arrivals), with a net inflow of 3,200 HNWIs, its highest on record, followed by the USA with an expected net inflow of 2,100 millionaires.
The other popular destinations for HNWIs in 2023 will be Switzerland, Canada, Greece, France, Portugal and New Zealand. Israel is predicted to fall out of the top 10 with its net inflow of millionaires to 600, compared to 1,100 in 2022.
Dr Juerg Steffen, CEO of Henley & Partners, told Zawya that there had been steady growth in millionaire migration over the past decade, with global figures for 2023 and 2024 expected to be 122,000 and 128,000, respectively.
“In general, wealth migration trends look set to revert to pre-pandemic patterns this year, with the notable exceptions of former top wealth magnets, the UK and the US,” the official said.
Steffen said the UK’s peak net HNWI outflow was 2017, following the Brexit referendum, when the European country voted to leave the European Union (EU) in 2016.
“While net losses dropped slightly between 2017 and 2019, the 2023 forecast indicates a far more significant millionaire exit is currently underway,” the report said.
Brexit and a government policy to remove permanent non-domiciled taxpayer status had made the UK less hospitable and welcoming to HNWIs.
Sunita Singh-Dalal, partner, private wealth and family offices at law firm Hourani & Partners told the media that unprecedented political volatility, rising debt, a dysfunctional healthcare system, high crime rates, and a general sense of lingering malaise, had “clearly tarnished the lustre of London” for millionaires.
The United States has also been less popular for migrating millionaires than pre-Covid, owing in part to the threat of higher taxes, the Henley Private Wealth Migration Report said.
However, the world’s largest economy is still attracting more HNWIs than it loses to emigration, with a net inflow of 2,100 projected for 2023, although the figure has dropped from a net inflow of 10,800 in 2019.
The remainder of the top 10 countries that will lose the most millionaires in 2023 are Brazil, Hong Kong, South Korea, Mexico, South Africa and Japan.
UAE’s Non-Oil Sector Outperforms GCC Peers
Listed companies in Dubai and Abu Dhabi have recorded over 50% jump in net profits year-on-year in the 2023 first quarter, outperforming their Gulf Cooperation Council (GCC) peers, whose quarterly profits declined on the back of a fall in energy and commodity prices.
Dubai-listed companies saw their net profits jump by 51.2% to reach USD 4.8 billion, compared to USD 3.2 billion in the 2022 first quarter. Kamco Invest, in its ‘GCC Corporate Earnings Report Q1-2023′ reports, said that the growth was primarily driven by earnings growth in the banking, real estate and capital goods sectors.
Also, Forbes’ latest list shows that four of the top ten listed companies in the Middle East are from the UAE.
As per Forbes’s flagship ranking of the Middle East’s top 100 listed companies for 2023, UAE’s International Holding Company (IHC) jumped from 12th place in 2022 to the fifth spot, followed by the First Abu Dhabi Bank, Emirates NBD and Taqa, who are positioned in the tally at the eighth, ninth and tenth spots respectively.