Decoded: At least 8,000 super rich Indians are expected to migrate out of the country this year

At least 8,000 high net worth individuals are expected to migrate out of India in 2022 as young tech entrepreneurs are becoming transnational as they remain aspirational about accessing global business and opportunities, displaying ever increasing risk appetite, according to the latest Henley Global Citizens Report, which tracks private wealth and investment migration trends worldwide. Stringent tax rules and reporting requirements in India along with the desire for stronger passports remain the biggest drivers for this migration.
The number of US dollar millionaires and billionaires will grow by 80% over the next 10 years in India compared to just 20% in the US and 10% in France, Germany, Italy, and the UK, revealed a report by international advisory firm Henley & Partners, which tracks private wealth and investment migration trends worldwide. However, the latest projected 2022 net inflows and outflows of US dollar millionaires (namely, the difference between the number of high net worth individuals who relocate to and the number who emigrate from a country) show a net loss for India this year of approximately 8,000 .
“These outflows are not particularly concerning as India produces far more new millionaires wealth than it loses to migration each year. There is also a trend of affluent individuals returning to India and once the standard of living in the country improves, we expecty people to move back in increasing numbers. General wealth projects for India are very strong. We expect the HNWI population to rise by 80% by 2031, which will make India one of the world’s fastest growing wealth markets during this period. growth in the local financial services, healthcare, and technology sectors,” said Andrew Amoils, Head of Research at New World Wealth.
Singapore and UAE are biggest wealth magnets
The UAE is expected to attract according to the largest net inflow of HNWIs globally in 2022 (at least 4,000), to forecasts on the Henley Private Wealth Migration Dashboard. Singapore is placed 3rd after Australia ( 3,500), with expected net inflows of 2,800 this year.
Fourth on the list is Israel at 2500, followed by Switzerland at 2200 and USA at 1500.
“We are also starting to receive considerable interest from families from across Asia who are looking to make Singapore or the UAE their established base. Countries that are providing excellent infrastructure for wealth preservation are likely to remain popular destinations. Protecting wealth continues to be an important driver for those considering investment migration, but we are now moving into an era in which alternative residence and citizenship are being seen as the ultimate resilience plan. Families are considering acquiring not just one alternative residence, but a portfolio of residencies and citizenships to provide them with greater mobility and more options in unpredictable times. In fact, we are entering a phase in which not holding an alternative residence to your home jurisdiction could be a risk that high‐net‐worth families cannot afford to take,” said Nirbhay Handa, Group Head of Business Development at Henley & Partners.
But why are India’s high net worth individuals leaving the country?
While the traditional base of industrialists is unchanged, joining their ranks is a new generation of tech entrepreneurs, who are keen to diversify a portion of their wealth in jurisdictions offering a slew of incentives and high tax efficiencies. “The appeal of a higher standard of living, including better educational and health facilities for the family, also continues to be a key driver, perhaps even more so in the wake of Covid. Increasingly stringent tax residency rules (introduced in 2020 and 2021) , with no relief in individual taxation rates for HNWIs, coupled with a desire for visa-free travel are also consistent primary motivators for alternative residence and citizenship,” said Bijal Ajinky, Partner in the Direct Tax, Private Client and Investment Funds Practices of Khaitan and Co.
Where are they migrating?
For Indians, EU countries and old favorites Dubai and Singapore are emerging as the top choices. While Singapore is a preferred destination for the tech entrepreneur and also for setting up family offices because of its strong legal system and availability of world-class financial advisors, the Dubai Golden Visa has emerged as a winner in several circles for its ease of procurement and the multiple opportunities it offers.
Others turned to Europe, and especially the Mediterranean countries such as Portugal, Malta, and Greece since they provide a gateway to the EU, an aspirational standard of living and, typically, a low physical residence requirement — which is important to those who continue to prioritize their families or business interests in India.
What are the challenges?
“Challenges for Indians include stringent exchange controls for making remittances, inheritance taxes for overseas assets, and Indian residency rules targeting statelessness. Indians are progressively turning to legal and financial advisors for nuanced advice on navigating these obstacles through the use of private trusts, holding entities , separate wills for different jurisdictions, and so on. Individuals are advised to start planning well before they intend moving any capital to avoid any unpleasant surprises,” said Ajinky.