A new study from Henley Global (as reported in The Times of India, 14th June) has estimated that approximately 8000 high-net-worth individuals are expected to emigrate from India this year, with most attractive destinations being EU countries. Mediterranean countries Malta, Portugal and Greece are particularly enticing as they provide a gateway to the EU Schengen Area, an aspirational standard of living and a typically low physical residence requirement – which is very attractive to those who prioritise their families or business interests in India.
Previously popular places like Dubai and Singapore are also resurfacing as top picks; Dubai’s Golden Visa currently being favoured for its ease of procurement and the vast opportunities available, whilst Singapore’s strong legal system and access to world-class financial advisors is beneficial for tech entrepreneurs and setting up family offices.
The appeal of a higher standard of living, including better educational and health facilities for families are part of the driving force behind why so many of India’s millionaires are migrating. Bijal Ajinky, Partner in the Direct Tax, Private Client and Investment Funds Practices of Khaitan and Co also says, “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.” Additionally, young tech entrepreneurs are becoming increasingly transnational as they remain eager to access global business and investment opportunities, highlighting their ever-increasing risk appetite.
The expected losses are not worrying for India however, as Andrew Amoils, Head of Research at New World Wealth states: “These outflows are not particularly concerning as India produces far more new millionaires 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 expect wealthy people to move back in increasing numbers.” The Henley Global Citizen Report has also revealed that the number of HNWIs in India will grow by 80%, a large amount compared to the 10% growth expected from other countries like France, Germany, Italy, and UK. These levels are expected to be reached by 2031 and will make India one of the world’s fastest growing wealth markets during this period, fuelled by particularly strong growth in their local financial services, healthcare, and technology sectors.
The main 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.
