Coveted and criticised, Latin America’s super-rich multiply

The number of 'ultra high net worth' individuals in Latin America rose five per cent last year, while the number of billionaires rose 38 per cent – the fastest growth rate for billionaires of any region in the world.

Shoppers look at Lamborghini cars at a dealership on Europa Avenue in Sao Paulo, Brazil. The lavish lifestyles and growing numbers of euper-rich in Latin America are attracting keen interest from the global luxury industry. Marcos Issa/BloombergShow less

MONTEVIDEO // They buy 10 Porsches a day and travel the world by private jet, toting their Louis Vuitton bags and leaving behind a faint scent of Chanel.

They are Latin America’s super-rich, and they are multiplying faster than anywhere in the world, coveted by luxury brands keen to tap their buying power, but criticised for paying low taxes in a region plagued by inequality.

Latin America, a region of some 600 million people, is home to nearly 15,000 “ultra high net worth” individuals, or people with fortunes of at least US$30 million (Dh110m), according to luxury industry consultancy Wealth-X.

The number rose five per cent last year, while the number of billionaires rose to 151 – a 38 per cent increase.

That was the fastest growth rate for billionaires of any region in the world.

Natixis Global Asset Management, a firm that specialises in managing large fortunes, recently launched its first Latin American offices in Mexico City and Montevideo.

Ensconced behind the high walls of their luxury villas, the mining magnates, telecoms tycoons, large landholders and others who make up Latin America’s uppermost crust may be less visible than the region’s poor.

But they are the flipside of its intractable inequality problem.

Their lavish lifestyles and growing numbers are attracting keen interest from the global luxury industry.

Porsche is one example. Since arriving in Latin America 15 years ago, the German sports car maker has increased annual sales to the region from less than 300 vehicles to nearly 3,900 vehicles, said George Wills, president of Porsche Latin America.

The region’s largest economies, Mexico and Brazil, remain the “volume drivers”, he said.

“But if you look in terms of the markets themselves, the markets that are enjoying good growth are markets like Peru, Colombia, Panama ... with 60 per cent growth in some of them.”

The ultra-wealthy have varied profiles, from Mexican telecoms magnate Carlos Slim, whose $77 billion fortune is the second-largest in the world according to Forbes, to Brazilian beer magnate Jorge Paulo Lemann, to Chilean mining scion Iris Fontbona and Colombian banker Luis Carlos Sarmiento.But the super-rich also face growing scrutiny in countries like Nicaragua, where 42.5 per cent of the country lives below the poverty line but 210 ultra-wealthy individuals control a combined fortune of $30 billion, equal to 2.5 times the country’s annual economic output.

“The main characteristic of inequality in Latin America is not that there are a lot of poor people, but that there are a few people who have a lot,” said Juan Pablo Jimenez, an economist at the UN’s Economic Commission for Latin America.

Moreover, the latter “pay very low taxes, both in international terms and compared to what they are supposed to pay,” he said.

“Taxes on wealth are very low in Latin America, and inheritance taxes are almost nonexistent.”

Ecuador’s socialist president Rafael Correa had to back down last week from plans to start taxing inheritances of more than $35,400 after an outcry from the business world.

* Agence France-Presse