India (Commonwealth Union)_ According to the Henley Private Wealth Migration Report 2023, which analyzes global trends in wealth and investment migration, India is expected to witness a net outflow of 6,500 high-net-worth individuals (HNWIs) in 2023. This ranks India as the second-largest nation in terms of HNWI outflow globally, after China, with a net loss of 13,500 individuals. However, the projected outflow is slightly lower than the previous year’s net outflow of 7,500 millionaires.
The report, published by Henley & Partners, provides exclusive forecasts of net inflows and outflows of US dollar millionaires, as projected by global wealth intelligence firm New World Wealth. New World Wealth has been monitoring global wealth migration trends for more than a decade. The report also placed the United Kingdom (3,200) and Russia (3,000 compared to 8,500 in 2022 after its invasion of Ukraine) in the third and fourth ranks, respectively, with significant HNWI outflows.
Despite the outflows, the report suggests that India’s capacity to generate new millionaires is still strong. New World Wealth estimates robust wealth growth for India, with the high-net-worth individual population expected to experience an impressive 80% increase by 2031. This ranks India as one of the fastest-growing wealth markets in the world in the coming years. The growth will be primarily driven by the flourishing financial services, healthcare, and technology sectors of the country. Interestingly, the firm also observed a noteworthy trend of wealthy individuals returning to India, and as the lifestyle continues to improve, it expects a significant influx of wealthy individuals returning to India in larger numbers.
Dominic Volek, Group Head of Private Clients at Henley & Partners, provided valuable insights into the migration patterns of millionaires in India. He mentioned that recent upheavals have prompted a shift, with more investors considering relocating their families for various reasons, including safety and security, education and healthcare opportunities, climate change resilience, and even crypto-friendliness. It is worth noting that nine out of the top ten countries with forecasted net HNWI inflows in 2023 have formal residence by investment programs. These programs encourage foreign direct investment in exchange for the right to reside and, in some cases, citizenship. Investors recognize the value of diversifying their domicile portfolios as a hedge against regional and global volatility, both now and in the future.
Henley & Partners received the maximum number of inquiries regarding investment migration programs in the first quarter of 2023, marking a 36% increase as compared to the past quarter and a huge 47% increase as compared to the corresponding period in 2022, which itself was a record-breaking year. The top two nationalities driving this demand are Indians and Americans, with British and South African individuals consistently being among the top ten for the past five years.
According to Sunita Singh-Dalal, Partner, Private Wealth & Family Offices at Hourani, several issues have led to the trend of investment migration from India. These include prohibitive tax legislation and complex rules regarding outbound remittances, which are prone to misinterpretation and abuse. She further added that wealthy Indian families continue to favor destinations such as Dubai and Singapore. Dubai, often referred to as the “5th City of India,” attracts them due to its government-administered global investor “Golden Visa” program, favorable tax environment, strong business ecosystem, and secure, peaceful surroundings.
Rohit Bhardwaj, Director, Private Clients at Henley & Partners India, highlighted India’s robust wealth presence, with nearly 357,000 high-net-worth individuals currently residing in the country. He indicated that Asia houses several wealth hubs, and the number of inquiries received from South Asia in the first four months of 2023 already accounts for 72.2% of the total recorded in the previous year, which was itself a record year. This upward trajectory is expected to continue, with Indian investors expressing a growing demand for alternative residences and additional citizenships.
