Stock Abu Dhabi skyline city UAE
More millionaires are landing up in the UAE, which could fuel yet another massive gain for the property market and allied sectors. Image Credit: AFP

Dubai: More than 4,000 millionaires could start calling the UAE their home this year, pushing the country to among the Top 10 in terms of basing high networth individuals. This is according to the latest Henley Global Citizens Report, which suggests the zero tax on personal income and surging revenues in the oil and gas sector as reasons.

The report found that affluent Russians seeking to escape the impact of Western sanctions have started to move to UAE and Israel, which is fourth on the list with an influx of 2,500 high-net-worth individuals. “With its zero tax rates, convenient location between Asia and Europe, luxury facilities, and rocketing oil and gas revenues, the UAE has experienced soaring rates of high-net-worth migration, primarily into Abu Dhabi and Dubai,” said the report.

Early trends

The report said that there was a ‘tsunami’ of capital leaving Russia even before the conflict. “After Russian troops crossed the Ukrainian border on February 24, they have now come under further pressure from many Western countries, such as Britain, where they had earlier made their homes.”

The conflict in Ukraine combined with the Covid lockdowns in China are having a massive impact on global supply chains, especially in the food and energy markets. Both countries are in the Top 10 globally in terms of outflows of high-net-worth individuals. Around 2,800 high net-worth Ukrainians will leave their country in 2022, compared to just 400 in 2019. China – the world’s second-largest economy - will lose 10,000 millionaires this year, which is 6,000 fewer than it lost in 2019.

The US’ ability to attract investment is slowing down markedly if the inflows of high-net-worth individuals are anything to go by. The 2022 provisional data shows net inflows of 1,500 millionaires to America this year compared to 10,800 in 2019.

EU holds up well

The EU still boasts a “couple of outliers” that continue to attract affluent investors, said the report.

Portugal and Greece offer an easy path towards residency and citizenship to those with sufficient funds, which explains why they remain in the Top 10 list of countries attracting high-net-worth individuals in 2022, with inflows of 1,300 and 1,200 millionaires, respectively, compared to 1,200 and 1,100 in 2019.

“Both however have come under pressure to review their investment migration programs, especially since Ukraine and the implementation of unprecedented sanctions against Russia and, specifically, its wealthiest citizens,” it said.

Singapore is one to watch

Singapore, a consistently appealing destination for wealth, appears to have benefited from changes happening in Hong Kong over the past two years, helping it to gain 2,800 millionaires compared to 1,500 in 2019. In 2021, over 100,000 Hong Kong citizens took advantage of Britain’s offer to issue them visas. High-net-worth individuals and bankers are prominent among those who decided to move out, and the data in this report indicates that Hong Kong could see 3,000 high-net-worth individuals leaving this year.

Australia surprises

Although high networth inflows are down in Australia and New Zealand compared to pre-Covid levels, both remain among the most sought-after destinations. Australia will gain 3,500 millionaires in 2022 versus 12,000 in 2019, and New Zealand is all set to attract 800 millionaires this year compared to 1,400 prior to the pandemic.

“The remarkable success with which Prime Minister Jacinda Ardern’s government handled the pandemic has further increased confidence in New Zealand’s resilience,” the report found.

‘Anemic’ growth

Private wealth growth in the US is bound to remain “anemic” this year as political unpredictability looms, said the report.

With the November midterm elections expected to return a Republican House and possibly the Senate, there could be a period of political uncertainty. “As a consequence, some high-net-worth investors will doubtless think twice before committing their wealth to the Americas."