CAPE TOWN – South Africa has seen a net outflow of 8 000 dollar millionaires over the last fifteen years. According to a new study from LIO Global and New World Wealth, this is among the largest migrations of high net worth individuals (HNWI) away from any country over this period.
The study compares the listed domiciles of a sample of around 60 000 dollar millionaires from 2000 with the same sample in 2014. It then extrapolates movements from those changes.
LIO Global and New World Wealth found that those HNWI that leave South Africa are most likely to move to Australia, the UK, Cyprus, Mauritius, the USA and Canada. Four of those countries are obviously appealing as developed nations, but Cyprus and Mauritius have become very popular as they offer citizenship to individuals who are able to buy property over a certain value.
Overall, the UK saw the highest inflow of dollar millionaires of any country. A total of 125 000 HNWI are estimated to have moved to its shores since 2000.
Most of these came from Europe, Russia, China and India. The study notes that London has become a hub for HNWI. The appeal lies in the convenience of travel from London because of the EU’s open border policy, the ease of buying property, and the quality of schools and universities in the area.
The USA is unsurprisingly second on the list, having attracted an estimated net inflow of 52 000 dollar millionaires. Most of these have been from China.
Singapore, which was very much founded on the principle of encouraging immigration, is third. It saw net inflows of an estimated 46 000 dollar millionaires.
The international nature of the city and its low tax structure remain Singapore’s most appealing characteristics, while it also benefits from its proximity to China, India and Indonesia. These are markets where the numbers of HNWI are growing rapidly.
The country that saw the biggest net outflow of dollar millionaires was China. An estimated 91 000 left its shores over the last 15 years. Their primary destinations were the US, Hong Kong and Singapore.
India also saw a large net outflow of HNWI. The study estimates that 61 000 sought domicile elsewhere, mainly in the United Arab Emirates, the UK, the USA and Australia.
Surprisingly, France saw the third largest outflow. Many French HNWI moved to the UK. There were however also significant movements to Switzerland and Luxembourg.
The study found that many HNWI see obtaining second citizenship as a way to improve their mobility and access to other markets. They are also looking for security, and the protection of their wealth.
“The majority of investors are typically looking towards the EU,” said Nadia Read, head of LIO Global. “Cyprus and Malta, in particular, are very popular as they offer direct citizenship without long waiting or residence periods. Portugal’s Golden Residence Visa, as well as the Hungarian Residence Bond program, have also seen significant interest, as they offer investors residence in exchange for a smaller investment (in comparison to Malta or Cyprus). The Caribbean has also recently seen strong demand as countries such as Antigua and Barbuda or Grenada offer direct citizenship in under six months.”