Why are Indian and Chinese millionaires fleeing overseas?
A report presents a fascinating snapshot of why the world’s rich leave their home countries.
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Just last year, an estimated 1.5 lakh millionaires from India and China left their country to live overseas, according to a new report tracking the world's wealthy from New World Wealth.
The emigration of India’s wealthy – along with billions of dollars of their assets – is no secret. But where and why people move overseas is not often clear. This report presents a fascinating snapshot of why the world’s rich leave their home countries, and which countries are the most attractive destinations.
China, which leads in the total number of millionaires or High Net Worth Individuals (HNWIs) – defined as people with assets in excess of $1 million, not counting their primary residence – unsurprisingly was the biggest source of millionaire emigrants, with a net outflow of 91,000 Chinese millionaires leaving last year.
While India ranked second, with a net outflow of 61,000, a greater proportion of Indian millionaires left for overseas than millionaires from any other country, including China. In 2014, the report estimates India had 2.26 lakh millionaires – roughly one in four Indian HNWIs left overseas. In comparison, China, which had around six lakh millionaires, saw only one in six leave – somewhat of a surprise, considering the well-entrenched – but somewhat questionable – narrative of wealthy Chinese fleeing abroad in huge numbers because of supposed uncertainty over the future of the Communist regime.
The patterns of emigration from India and China were also found to be different. While the Chinese mainly moved to the US, UK, Hong Kong and Singapore which has a sizeable ethnic Chinese community, Indians moved to the United Arab Emirates, US, UK and Australia.
According to the study, the main motivations for seeking either a second residence or new citizenship is "to ensure freedom of global mobility and access, as well as security and wealth protection for their families," Nadia Read, head of world residence and citizenship consultancy LIO Global, which brought out the report along with New World Wealth, is quoted as saying in the study.
The number, she says, has "increased dramatically" since the early 2000s, with major reasons cited as "turmoil in home country, security concerns and optimising education of children". For Indians and Chinese, one can guess that education is perhaps a driving factor. The report does not, however, speculate on the financial factors that have been seen as driving many millionaires in India and China to move their assets overseas in recent years for a much simpler objective: Avoiding the reach of the not-so-long arms of the law in their respective countries.