The Great Millionaire Migration | Basil Mohr-Elzeki on Global Wealth Migration
Nov 3, 2024
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Basil Mohr-Elzeki, Managing Director and Head of Americas for Henley & Partners, discusses the rising trend of millionaires relocating for better opportunities and safety. He unpacks the motivations behind global wealth migration and how taxation and geopolitical risks influence these decisions. Interestingly, he highlights the allure of citizenship by investment programs in various countries, including Malta and Portugal, and the increasing interest from crypto investors seeking more favorable regulations. The conversation sheds light on the strategic planning crucial for affluent families navigating these changes.
The surge in millionaire migration in 2024 is driven by geopolitical risks, economic fluctuations, and tax considerations across countries.
Citizenship and residency investment programs offer varied investment thresholds, ranging from $100,000 to over €8 million, attracting foreign direct investment.
High-net-worth individuals are increasingly seeking low-tax jurisdictions like the UAE to optimize their financial situations amid rising tax concerns.
Deep dives
Overview of Citizenship and Residency Investing
Citizenship and residency investing involves programs that allow individuals to obtain residency or citizenship in a country by making financial contributions, such as purchasing real estate or making non-refundable contributions. Governments design these programs to attract foreign direct investment, stimulating their economies. For instance, the EB-5 program in the United States offers a pathway to a green card for those who invest a specified amount into job-creating projects. Globally, there are over 100 such programs, with the most reputable being handled by firms like Henley and Partners.
Investment Requirements and Options
Investment thresholds for citizenship or residency vary significantly across countries, ranging from as low as $100,000 to upwards of €8 million. Austria offers a unique Citizenship by Merit that can require investments of €3.5 million or €8 million for certain projects, while Caribbean nations provide more affordable options with faster processing times. In the Caribbean, countries like Antigua and Barbuda have flexible programs allowing for quick citizenship through real estate or donations, typically within six to twelve months. The complexity of these options reflects the differing economic needs and appeal of various countries.
Changing Motivations for Seeking Dual Citizenship
The reasons individuals pursue alternative citizenship and residency have evolved from mainly securing better lives in developing nations to seeking geopolitical risk hedges in first-world countries. Today, wealthy individuals from the U.S., Canada, and the U.K. often view acquiring a second passport as a safety net amid rising global uncertainty. Factors like the COVID-19 pandemic, political instability, and economic fluctuations have led individuals to desire mobility and the ability to relocate quickly if necessary. For many, it's not an immediate relocation plan but rather a strategic option for the future.
Tax Considerations and Strategic Planning
Tax implications are pivotal in considering residency or citizenship in new countries, especially for U.S. citizens subject to worldwide income taxation. Some individuals seek citizenship in low-tax jurisdictions, like the UAE, to benefit from more favorable tax regimes, potentially leading to a significant financial advantage. Henley and Partners mention various programs across Europe and the Caribbean that present unique tax opportunities, though they do not provide direct tax advice. As higher tax rates and potential new wealth taxes loom in places like California and the U.K., more individuals look to diversify their residency as a strategic move.
Current Trends and Future Projections
A notable trend is the significant outflow of high net worth individuals from countries like the U.K. and China, with the UAE and the U.S. seeing a large inflow of these individuals. Economic and political shifts in countries such as Brazil and the U.K. prompt wealthy residents to consider alternative residency and citizenship options, particularly amidst threats of increased taxation and regulatory changes. Reports suggest that 2024 will witness a historic number of millionaires relocating, with a projected 128,000 planning to leave for various reasons, including tax and lifestyle optimization. This growing market underscores the importance for individuals to carefully evaluate their citizenship and residency options to mitigate current and future risks.
Email info@monetary-matters.com to inquire about Henley & Partners, and Jack will connect you with Basil.
Basil Mohr-Elzeki, Managing Director and Head of Americas for Henley & Partners, joins Jack on Monetary Matters to explain why more millionaires than ever are going to relocate countries in 2024. He delves into the causes of this phenomenon, the nuances of citizenship and residency investment, and the role that taxes, geographic diversification and other factors play in driving the migration of the world’s high-net-worth individuals.
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