SA’s millionaires are emigrating in droves, and these are their destinations

South Africa’s millionaires appear to be leaving the country in droves, with data showing that about 4 500 high-net-worth individuals left the country over the past decade.

The reasons for their departure range from concerns about issues such as safety, rolling blackouts, corruption, and economic stagnation.

High-net-worth individuals (HNWI) are individuals with wealth of more than R15.7 million, including all assets such as property, cash, equities and business interests less liabilities. Sars will note their departure with a significant drop in the number of top earners.

According to the latest Henley Global Citizens Report, with forecasts by New World Wealth, the UK and US are no longer first on the list of countries where South African millionaires go, as the UAE now attracts the biggest group of millionaires in 2022.

The HNWI migration figures are based on dollar millionaires who stay in their new country for more than half of the year.

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This is where the millionaires are going

The majority were off to the UK, US and Australia, but according to New World Wealth, notable numbers also emigrated to Portugal, Switzerland, Israel, Mauritius, New Zealand, the UAE, Canada, Monaco and Malta.

How do dollar millionaires choose their new country of residence?

According to the report Portugal attracts millionaires with its popular Golden Residence Permit Programme, with the St. Kitts and Nevis Citizenship by Investment Programme hot on its heels.

The Canada Start-Up Visa Programme is next on the list, offering the fastest way for entrepreneurs and wealthy people to obtain Canadian residence. The Greece Golden Visa Programme is also becoming popular, followed by the Antigua and Barbuda Citizenship by Investment Programme.

South African millionaires are also heading to Malta, which has become one of Europe’s great success stories regarding millionaire migration and overall wealth growth.

Malta’s citizenship by naturalization process injected significant new wealth into the island’s economy, that stimulated strong growth in sectors such as financial services, IT and real estate. According to expectations, about 300 millionaires will move to Malta this year.

After being known for decades as a good island destination for a holiday, Mauritius has also become an attractive destination for high-net-worth individuals over the past decade.

It is easy to conduct business there, while it is also safe, offers competitive tax rates and has a fast-growing financial services sector. About 150 millionaires will move to Mauritius this year according to expectations.

Australia has been a popular destination for many years and New World Wealth estimates more than 80 000 US dollar millionaires moved there during the past 20 years, with another 3 500 expected this year, the second highest globally.

New Zealand expects 800 HNWIs in 2022, while Singapore also still attracts millionaires and expects 2 800 this year, a major increase of 87% compared to the 1 500 of 2019. Israel is also seeing an increase with 2 500 HNWIs expected this year, an increase of 79% since 2019.

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Millionaires are leaving these countries

However, as other countries gain dollar millionaires, the UK and US are seeing fewer millionaires choosing to live there, with data showing that these destinations that traditionally attracted wealthy investors are becoming less attractive.

The UK, once the world’s financial centre is steadily losing millionaires and is expected to see 1 500 of them leaving this year. Millionaires started leaving the UK after the Brexit vote and due to rising taxes. The UK has so far lost about 12 000 millionaires since 2017.

The US is also not so attractive anymore since the pandemic started, possibly because they are worried about higher taxes, although it still welcomes more HNWIs than it loses.

The country expects 1 500 new millionaires to move there this year, but it is a major decrease of 86% from 2019, when the country welcomed 10 800 millionaires.

The emigration of millionaires also means that there must be countries losing their millionaires. The ten countries with the highest emigration rates are Russia, China, India, Hong Kong, Ukraine, Brazil, the UK, Mexico, Saudi Arabia and Indonesia.

Russia saw the biggest emigration of millionaires since the beginning of 2022 after it invaded Ukraine, with forecast emigration of 15 000 HNWIs by the end of the year, an enormous 15% of its HNWI population and 9 500 more than in 2019.

It is also no surprise that so many millionaires are predicted to leave Ukraine after Russia’s invasion, with 2 800 millionaires (42% of its HNWI population) leaving, a loss of 2 400 more than 2019.

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More will leave and this is why

“HNWI migration was a rising trend over the past decade until, understandably, it dipped in 2020 and 2021 due to the Covid-19 pandemic. The 2022 forecast reflects an extremely volatile environment worldwide,” Dr Juerg Steffen, CEO of Henley & Partners, says.

A total of 88 000 millionaires are expected to emigrate this year, but this is still 22 000 less than the 110 000 in 2019. However, the largest millionaire migration on record, of 125 000, is predicted for 2023 as they get ready for the new post-Covid world and with a possible rearrangement of the global order against the background of climate change, he says.

Andrew Amoils, head of research at New World Wealth, says the HNWI migration figures are a good barometer of economic health, adding that wealthy people are extremely mobile. It is therefore important to watch these figures as they can provide early warning signals of future country trends.

“Countries that draw wealthy individuals and families tend to be robust, have low crime rates, competitive tax rates and attractive business opportunities.”