Dr. Juerg Steffen is CEO of Henley & Partners and author of definitive books on high-net-worth relocation to Austria and Switzerland.
Of the Top 20 cities in the world with the highest millionaire populations, 14 are in countries that offer investment migration programs. The right to live, work, study and invest in leading international wealth hubs such as New York, London, Singapore, Sydney, and Toronto can be secured via residence by investment. The same applies to many up-and-coming HNWI growth cities, such as Dubai, Austin, Lugano, and Lisbon. Individuals of talent and means need not limit their lives and business interests to one country. Being able to relocate yourself, your family, or your business to a more favorable city or have the option to choose between multiple different residences across the world is an increasingly important aspect of international wealth and legacy planning for private clients.
Cities are vibrant centers of opportunity, innovation, prosperity, and culture, and despite predictions of their imminent demise during the pandemic, they continue to grow and evolve. Many of those who left cities in recent years are returning, including digital nomads and crypto investors whose itinerant lifestyles are losing their appeal as stability beckons. As the World’s Wealthiest Cities data in this Henley Global Citizens 2022 Q3 report shows, many capitals continue to attract wealthy families for a wide range of reasons, from unrivaled business opportunities, to prime real estate, to proximity to top-tier education institutions and world-class private healthcare facilities, to luxury leisure pursuits and cosmopolitan environments that cannot be found outside of urban areas.
According to Henley Private Wealth Migration data released last quarter, 2023 will see the ‘great wealth migration’, with the largest millionaire migration flows on record. Our analysts predict up to 125,000 high-net-worth investors and their families will relocate next year, and up to 30% of them will do so via investment migration programs.
Although at Henley & Partners we see record numbers of Americans continuing to explore alternative jurisdictions to invest in and relocate to due to rising inflation at home and growing ideological rifts in the fabric of domestic politics — the USA nonetheless remains the world’s most significant private wealth hub. As our data reveals, five of the world’s top 10 wealthiest cities are in the USA, namely, New York City (1st), San Francisco (3rd), Los Angeles (6th), Chicago (7th), and Houston (8th). It’s no surprise either that one of the world’s oldest and most established financial centers, London, ranks 4th globally in terms of its millionaire population.
Many foreign investors continue to pursue residence routes into the USA and the UK, such as the extremely popular US EB-5 Immigrant Investor Program and the UK Innovator Program. Both countries were forerunners in the investor visa space — the USA created the EB-5 in 1990, and the UK launched its first program in 1994 — and both have benefited from encouraging foreign investment and entrepreneurially minded individuals, as evidenced in their impressive HNWI populations.
According to a recent report by the National Foundation for American Policy (NFAP), immigrants have led to an increase in the number of America’s unicorn start-ups valued at USD 1 billion or more, with 64% founded by immigrants or children of immigrants. The report states that “cutting-edge start-ups are crucial to an economy because innovation is often expressed through entrepreneurship. Without immigrants there would be fewer than half as many billion-dollar startup companies in the United States today.”
The latest private wealth data in the Henley Global Citizens 2022 Q3 report reveals that a significant number of the fast-growing high-net-worth-individual populations between January and June 2022 are in cities in the Middle East and Africa.
Oil-rich Riyadh in Saudi Arabia has seen its millionaire population snowball by 20% in the past six months, most likely a consequence of Europe curbing its energy ties with Russia and seeking out Saudi Arabian oil. Similarly, the UAE’s Sharjah, Dubai, and Abu Dhabi have demonstrated exponential growth of 20%, 18%, and 16%, respectively.
The UAE has been immensely successful in enhancing its livability and drawing the talented and the wealthy to its shores. This is in part due to its business-friendly policies and its recently launched UAE Residence by Investment Program. Keen to retain and expand its populace of affluent residents, senior employees in the UAE can now obtain a 10-year residence permit if they are sponsored by their employers. Qualifying applicants who invest AED 2 million (approximately USD 550,000) in a licensed company, an accredited local fund, or real estate can also secure a UAE golden visa.
Africa is another significant private wealth growth region with several cities that have rising millionaire populations. Most notably, Lusaka in Zambia, where HNWI growth was 18% this year, Luanda in Angola, with growth of 16%, and Lagos in Nigeria, with growth of 15%. Our Africa Wealth Report 2022 revealed that total private wealth held on the African continent at the end of 2021 was USD 2.1 trillion and is expected to rise by 38% over the next 10 years.
As instability persists in economic and geopolitical spheres, more high-net-worth individuals are seeking the optionality to live, work, and conduct business in a range of different jurisdictions to protect their wealth and legacies. Appetite for alternative residence by investment programs is growing as global investors become increasingly cognizant of the benefits of domicile diversification and its multiple yields for their family as well as their business interests.
Similarly, nation states are realizing the advantages of residence and citizenship by investment programs as an innovative financing tool to allocate funds to national or regional social, infrastructure, and development projects that benefit their citizens, or to supplement their national skill sets. Cities are bouncing back, and investment migration programs are an effective way for capitals to attract capital, and investors to gain access to the world’s wealth hubs.