Summer 2014

INSIDE VIEW: Millionaires on the move

YachtOf the top 30 cities for millionaires worldwide, 12 are in Asia. Andrew Amoils of New World Wealth discusses the last decade’s trends.

There were about 13 million individuals with net assets of $1 million or more, excluding their primary residence, at the end of last year.

The US is on top with four million millionaires, followed by Japan with 1.1 million, the UK with 815,000, Germany with 732,000, and China with 508,000. London is the city with the highest number of millionaires, counting just more than 339,000, followed by New York with 301,000, and then Tokyo with 226,500. 

London’s place at the top of the list is unsurprising, considering its international appeal and the high cost of property. Global property consultant Knight Frank says apartments in the affluent areas of London, including places such as Knightsbridge, fetch up to $49,000 per square meter.

The US has seven and Germany three cities in the top 30, while China, Japan and Switzerland have two. The top 30 includes 12 cities in Asia, ten in the US, and eight in Europe. There were, however, no Middle Eastern or African cities in the top 30. 

In terms of millionaire density, Geneva and Zurich in Switzerland come out top, followed by Singapore. This measure refers to the number of millionaires per unit of the population and smaller cities, such as Monaco, are excluded in this ranking. 

Over the past decade, 114,000 millionaires left their home countries for the UK, 45,000 for Singapore, 42,400 for the US. Another 22,200 left for Australia, 19,700 for Hong Kong, 13,600 for Canada, and 10,100 for the United Arab Emirates. 

The main beneficiary of this trend of migrating millionaires was the UK. More than 60% of them came from Europe, the rest from China, Russia and India. 

A substantial number of migrating millionaires also came from the Middle East – in particular Saudi Arabia and Iran – as well as Africa – South Africa, Nigeria and Egypt.

Singapore, in second place after the UK, benefited from a strong migration of millionaires from countries, such as China, India, Indonesia, and Europe.

Those who left for the US mostly came from the UK, Europe, India and China.

Millionaires by cityThe population of millionaires in Australia was boosted by strong inflows from the Asia Pacific region – most notably India, China and Indonesia – as well as the UK, Europe and South Africa. 

Hong Kong saw most of its new millionaires arriving from China. 

Those who left their home countries for Canada often came from Europe, the UK and South Africa. The United Arab Emirates, mainly Dubai, saw strong inflows from other Middle Eastern countries and North Africa. 

A number of factors led to the UK, in particular London, becoming an attractive hub for moving millionaires. 

Among those factors were the language, the international nature of the city, the ease of moving money into the country, buying property there and actually moving to the country – especially because the European Union has an open border policy. 

Singapore has benefited from its geographical location: it is near those countries where the population of millionaires is growing fast, such as China, Indonesia and India.

In addition, it has a low tax structure, with a minimum income tax rate of 20%. The international nature of the city is another factor, just like in London.

The United Arab Emirates, and in particular Dubai, has benefited from its reputation as the main financial and business hub in the Middle East.

It has a low tax structure – there is no income tax in Dubai. The international nature of the city is another aspect that appeals to migrating millionaires. 

Over the past decade, China has seen the highest number of millionaires leaving, amounting to 76,200, followed by India with 43,400, France with 31,700, Italy with 18,600, Russia with 14,000, Switzerland with 10,600 and Indonesia with 10,000.

Their choice of domicile varies. Chinese millionaires mainly moved to Hong Kong, Singapore and the UK, whereas Indian millionaires preferred the UK, the US and Australia.

French and Italian millionaires mainly moved to the UK and Switzerland. Russian millionaires chose the UK and the US.

A large proportion of Swiss millionaires, many of which were not born in Switzerland, but domiciled there for tax reasons, moved instead to countries including Singapore, the UK and the United Arab Emirates.

Indonesian millionaires also overwhelmingly chose to live in Singapore when they left their home country.

These findings refer to the number of individuals that have changed their domicile, their primary residence, over the past decade. The review period was between 2003 and 2013.

Andrew Amoils is a senior analyst of New World Wealth, based in South Africa

©2014 funds global asia

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