UAE expected to attract 4,500 new millionaires this year

Australia reclaims the top spot in drawing the highest number of wealthy individuals, report finds

The UAE has become a magnet for the world's wealthy, who are relocating to the country in record numbers, a report has said. Bloomberg

The UAE is expected to attract 4,500 new millionaires this year, according to a report by Henley & Partners, which tracks private wealth and investment migration trends worldwide.

The Emirates was ranked second behind Australia, which is expected to attract the highest net inflow of high-net-worth individuals globally at 5,200, Henley & Partners said in the report, which focuses on people with a net worth of $1 million or more.

Singapore was third with a projected net inflow of 3,200 HNWIs, its highest on record, followed by the US with an expected net influx of 2,100 millionaires, the report found.

Switzerland, which is expected to attract a net inflow of 1,800 millionaires, rounded off the top five globally.

“In general, wealth migration trends look set to revert to pre-pandemic patterns this year, with Australia reclaiming the top spot for net inflows as it did for five years prior to the Covid outbreak, and China seeing the biggest net outflows as it has each year for the past decade,” said Juerg Steffn, chief executive of Henley & Partners.

“The notable exceptions are former top wealth magnets, the UK and the US.”

The UAE, the Arab world’s second-largest economy, has undertaken several economic, legal and social reforms in recent years to strengthen its business environment, boost foreign direct investment and attract skilled workers.

In 2019, amendments were introduced to the golden visa initiative to simplify the eligibility criteria and expand the categories of beneficiaries.

The visas are valid for up to 10 years and aim to encourage exceptional workers and foreign investors to establish deeper roots in the country.

Dubai was ranked the 23rd-most popular city in the world last year for the super rich after it recorded an 18 per cent increase in HNWIs in the first six months of 2022, a separate report by New World Wealth found.

The study defined HNWIs as people with wealth of $1 million or more.

The city’s population of HNWIs rose to 67,900, up from 54,000 in June 2021, according to the study.

The number of HNWIs in the UAE is expected to rise 39 per cent by 2026 to more than 228,000 people, according to a report last year by consultancy Knight Frank.

Meanwhile, China is expected to record the biggest outflow of millionaires globally, at 13,500, followed by India at 6,500 and the UK at 3,200, according to the Henley & Partners report. Russia is set to record an outflow of 3,000 HNWIs.

“General wealth growth in China has been slowing over the past few years, which means that the recent outflows could be more damaging than usual,” Andrew Amoils, head of research at New World Wealth, said in the Henley & Partners report.

“China’s economy grew strongly from 2000 to 2017, but wealth and millionaire growth in the country has been negligible since then [when measured in US-dollar terms].”

The UK’s expected HNWI flight is double that of last year, when it recorded an outflow of 1,600 millionaires, the report said.

The UK’s peak net outflow year for millionaires was in 2017, following the Brexit referendum in 2016. Before this, the country enjoyed net positive inflows of HNWIs.

The US is also less popular among migrating millionaires today than before the onset of Covid-19, perhaps due, in part, to the threat of higher taxes, the report said.

The country still attracts more HNWIs than it loses to emigration, with a net inflow of 2,100 projected for 2023, although this is a large drop from 2019 levels, which it had a net inflow of 10,800 millionaires, according to the research.

Henley & Partners also received a record number of investment migration programme inquiries in the first quarter of 2023, up 36 per cent compared with the fourth quarter of 2022.

The top two nationalities with the highest number of inquiries about migration programmes are Indians and Americans, the report found.

Portugal's golden residence permit programme is the most popular for HNWIs, with programmes launched by Austria and St Kitts & Nevis also registering strong interest.

Historically, many wealthy individuals acquired residence rights or citizenship without moving to those countries, said Dominic Volek, group head of private clients at Henley & Partners.

“Recent and persistent turmoil has caused a shift – more investors are considering relocating their families for a range of reasons, from safety and security, to education and health care, to climate change resilience and even crypto-friendliness,” he said.