More than 15,000 millionaires will flee Russia by the end of this year as they turn their back on Vladimir Putin‘s regime, a study has claimed.
Around 15 per cent of Russians with $1million (£820,000) are expected to emigrate from the autocratic state by the end of 2022, according to projections by Henley & Partners based on migration data.
The firm acts as a go-between for the super-rich and countries that are selling citizenship.
Despite the drain of high-net worth people from the country, it is not the nation which has lost the most millionaires relative to population.
Around 15 per cent of Russians with $1million (£820,000) are expected to emigrate from the autocratic state by the end of 2022
High-wealth Russians are fleeing Vladimir Putin’s flagging economy which has been hit by sanctions
Ukraine, the target of Russia’s invasion, will lose 2,800 millionaires before the end of the year – a startling 48 per cent reduction.
Andrew Amoils, the head of research at New World Wealth, which compiled the data, said: ‘Affluent individuals have been emigrating from Russia in steadily rising numbers every year over the past decade, an early warning sign of the current problems the country is facing.
‘Historically, major country collapses have usually been preceded by an acceleration in emigration of wealthy people, who are often the first to leave as they have the means to do so.’
The most popular destination for these wealthy expats is expected to be the United Arab Emirates (UAE) – who have taken the millionaire’s playground title from traditional destinations like the US and UK.
Henley wrote in its report: ‘UK has lost its wealth hub crown, and the US is fading fast as a magnet for the world’s wealthy, with the UAE expected to overtake it by attracting the largest net inflows of millionaires globally in 2022’.
Around 4,000 Russian millionaires are expected to move to the UAE by the end of the year.
Australia (3,500), Singapore (2,800) and Israel (2,500) will also attract the high net-worth people to their shores as part of the Russian exodus, the report claims.
Also expected to be popular are the so-called ‘three Ms’ tax havens of Malta, Mauritius and Monaco.
The most popular destination for these wealthy expats is expected to be the United Arab Emirates (UAE)
‘Malta has been one of Europe’s great success stories of the past decade, not just in terms of millionaire migration but also in terms of overall wealth growth,’ Amoils said.
‘It is currently one of the world’s fastest-growing markets, with US dollar wealth growth of 87% between 2011 and 2021. Its citizenship by naturalisation process has brought substantial new wealth to the island nation and has been credited with propelling Malta’s strong growth in multiple sectors including financial services, IT and real estate.’
Malta offers an expedited process that only calls for proof of 12 months of residency so long as the applicant contributes more than $925,000 to the national development fund
Malta offers EU citizenship to those who contribute more than $740,000 to the national development fund, more than $860,000 into real estate investment, more than $12,000 to charity, and provide proof of at least 36 months of residency in the country.
‘Approximately 300 millionaires are expected to move to Malta in 2022.’
The nation also offers an expedited process that only calls for proof of 12 months of residency so long as the applicant contributes more than $925,000 to the national development fund.
Indian Ocean island Mauritius is a ‘wealth magnet’ because it has no capital gains tax, no inheritance tax, and maximum tax rate of 3% of global companies.
According to the Africa Wealth Report 2022, Mauritius is now home to 4,800 HNWIs compared with 2,700 a decade ago.
Indian Ocean island Mauritius is a ‘wealth magnet’ because it has no capital gains tax, no inheritance tax, and maximum tax rate of 3% of global companies
Approximately 150 millionaires are expected to move to Mauritius in 2022, mainly from South Africa and Europe.
It is not just the wealthy living in conflict zones seeing an uptick in attempts to emigrate.
Henley & Partners said sales of golden passports to American nationals worth between $50 million and $20 billion have shot up more than 337 percent since 2019, Business Insider reported in May.
Latitude Residency & Citizenship and Dasein Advisors, two other citizenship firms, said they too have seen more inquiries from American clients over the past three years than in the previous 20 combined.
‘We’ve all lived through the past two and a half years,’ Reaz Jafri told Insider, referencing the pandemic and the civil unrest that followed.
‘It all just reminded us how vulnerable and frail we are, and people who have means are accepting that it will happen again — and they don’t want to be caught off guard.’
Other issues said to have seen the demand for foreign passports spike include the likely end of Roe V Wade, which legalized abortion across the US, Florida’s Parental Rights in Education Bill – better known as the Don’t Say Gay Bill, as well as fears for the future of America’s democracy following the Black Lives Matter and January 6 riots.
Portugal was said to provide the most coveted ‘golden passports’ as sales from U.S. billionaires over the citizenships are up more than 377 percent in the past three years
New Zealand citizenship is popular as well as it grants golden passports to wealthy investors who only have to show proof of 88 days of residency in the country over three years
Austria offers citizenship immediately to those who make a $3.7 million contribution to the government development fund or invest more than $12.3 million into a business
Malta also grants European Union citizenships to those who provide more than $1 million to the nation after only 1 year of residency
Dominic Volek, head of private clients at Henley & Partners, said clients were worried over the ‘four Cs: COVID-19, climate change, cryptocurrency and conflict.’
Volek told Insider his firm saw an uptick in clients during the Trump administration, and once the pandemic hit, wealthy Americans were hit by the realities of their country’s COVID restrictions.
‘In the very strict lockdowns there was a point where if you only had an American passport, you could not enter Europe,’ Volek said. ‘I think that made a lot of particularly ultra-high net worth individuals realize that they’re potentially a little bit more fragile than they thought.’
REQUIREMENTS FOR ‘GOLDEN PASSPORTS’
Nations that offer citizenship to wealthy individuals often call on them to make big investments in their country and provide proof of residency.
Payments: Applicants are required to make a minimum $200,000 investment in real estate
Residency: Applicants must prove they lived in the country for seven days in one year. Portugal offers a ‘golden visa’ in return, which lasts five years, and which can then be used to obtain a passport.
Payments: Applicants are required to make a minimum $$6.5 million investment in real estate, growth investments or government bonds over three years for Investor 1 visas and about $2 million over four years for Investor 2 visas
Residency: Applicants for Investor 1 status must prove they lived in the country for 88 days over three years, and applicants for Investor 2 status must prove they lived in the country for 438 days over four years
Payments: Applicants are required to contribute more than $740,000 to the national development fund, more than $860,000 into real estate investment, more than $12,000 to charity. To expedite the process, applicants must make a payment of more than $925,000 to the national development fund along with the other investments.
Residency: Applicants must prove they lived in the country for at least 36 months for the standard process and only 12 months for the expedited process.
Payments: Applicants are required to contribute nearly $50,000 to the government, or, to expedite the process, applicants must make more than a $3.7 million contribution to the government development fund or invest more than $12.3 million into a business
Residency: Applicants must prove they lived in the country for at least 10 years, but the expedited process allows citizenship to be bypassed