Ultra-rich may leave India due to prohibitive tax legislation in 2023: Report
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Mumbai: India is expected to experience a significant outflow of millionaires, with approximately 6,500 high-net-worth individuals (HNWIs) predicted to leave the country in 2023, according to the recently released Henley Private Wealth Migration Report.
The report, which tracks global wealth and investment migration trends, ranked China as the country with the highest number of departing millionaires, followed by India.
While India's position in the report may seem concerning at first, experts suggest that the country's outlook remains positive due to its ability to generate a substantial number of new millionaires. Andrew Amoils, Head of Research at New World Wealth, emphasizes that India produces far more new millionaires than it loses to migration, alleviating some concerns about the exodus.
The migration trend from India can be attributed to several factors, including prohibitive tax legislation and complex rules concerning outbound remittances. Sunita Singh-Dalal, Partner at Hourani, points out that these issues, which are open to misinterpretation and abuse, have triggered the investment migration trend in the country.
Dubai and Singapore continue to be favoured destinations for wealthy Indian families seeking to relocate. Dubai, often referred to as the "5th City of India," offers a government-administered global investor "Golden Visa" program, a favourable tax environment, a robust business ecosystem, and a safe and peaceful environment, making it an attractive choice.
According to Henley and Partners, the first quarter of 2023 saw a surge in enquiries for investment migration schemes, with significant demand coming from both Indians and Americans.
On a global scale, the report predicts that Australia will witness the highest net inflow of millionaires in 2023, with 5,200 individuals expected to settle in the country. The United Arab Emirates (UAE) is projected to welcome 4,500 new millionaires, building on its record-breaking influx of HNWIs in 2022.
Singapore is expected to see a net inflow of 3,200 HNWIs, while the United States is set to add 2,100 people to its millionaire club. Switzerland, Canada, Greece, France, Portugal, and New Zealand also make the Top 10 list for net HNWI inflows.
Despite the migration challenges faced by India, experts remain optimistic about the country's wealth generation potential. Dr Juerg Steffen, CEO of Henley & Partners, highlights the steady growth of millionaire migration over the past decade, with approximately 122,000 and 128,000 millionaires expected to migrate globally in 2023 and 2024, respectively.
