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Mapping the Global Migration of Millionaires

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MTF

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I found the following map interesting:

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source with additional data: Mapping the Global Migration of Millionaires

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I find it interesting that the countries that attract most high-net worth individuals (HNWI) are almost all well-developed high-tax countries. It seems that even if they made their millions in their home countries, millionaires still prefer security and well-developed infrastructure over any financial gains due to lower taxes. Then there's also the increasing lack of privacy and government overreach which is rampant in most of the countries attracting HNWIs—yet it seems it doesn't bother them much.

If you were a HNWI or are one, what do you think are the best countries for millionaires and why? Would you rather spend your money in a poorer country with lower taxes and a government that's incapable of controlling their citizens or move to a well-developed, wealthy country that offers more security at the expense of higher taxes and more regulation?
 
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Kid

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I've seen program about Chinese millionaires leaving country en mass.
Back then parts of Canada had more favorable immigration laws for higher net worth Individuals.

Australia might have those Chinese people now. It's close to their country.
 

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I've seen program about Chinese millionaires leaving country en mass.

I think it does say something about the future of the country, though China is still making more millionaires than it loses (for now?).
 

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Are there countries where it is easier to get wealthy?

And by easy I mean, where you don't have to grease the hands of bureaucrats and local gangs on every step of your business.
 
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Are there countries where it is easier to get wealthy?

And by easy I mean, where you don't have to grease the hands of bureaucrats and local gangs on every step of your business.

The US.
 

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I find it interesting that the countries that attract most high-net worth individuals (HNWI) are almost all well-developed high-tax countries. It seems that even if they made their millions in their home countries, millionaires still prefer security and well-developed infrastructure over any financial gains due to lower taxes
That is pretty interesting. The rhetoric you usually hear is "we can't raise taxes. the millionaires will leave."

I do know that there's a correlation with innovation and income equality: countries with more income equality tend to have higher rates of innovation. The main reason for this is, people can't innovate until their basic needs are met.
 

ChrisV

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Actually upon looking this up, in general it looks like they're leaving high tax countries and moving to lower tax areas.



hnwi-migration-2019-1.png

world-map-global-tax-rate.jpg

They tend to move to Green / Yellow Countries, and move from Yellow / Orange countries. Example, Brazil and China are losing tons of millionaires. US and Canada and Australia are gaining a bunch.

Exceptions are:

UK, who have a very low tax rate and are still losing millionaires.

Saudi Arabai (although that should be ovious - who the hell wouldwant to live there.)

That's just at quick glance. It would be better to look at the actual amount of millionaires lost, but maybe I'll look at that later.
 
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ChrisV

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Are there countries where it is easier to get wealthy?

And by easy I mean, where you don't have to grease the hands of bureaucrats and local gangs on every step of your business.
Yes, there are countries where it's easier to get wealthy.

The measure is called 'social mobility.'

Social mobility is the movement of individuals, families, households, or other categories of people within or between social strata in a society. It is a change in social status relative to one's current social location within a given society. It is movement within between layers or tiers in an open system of social stratification.

Socially-Mobile-Countries.png


Interestingly enough the countries where it's easiest to become wealthy and start a business are the European Socialist countries. Ease of doing business (measured by World Bank):

1600px-Doing_business_2017.svg.png


Also this may be an informative article:

 

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I've had this discussion with friends a few times. We always came to the conclusion that countries like Switzerland are a good option if you're already rich.

The difference between paying 0% tax and 40% tax is astronomical in terms of the length of time it takes to achieve financial freedom. When you already have financial freedom, maybe it's not up top of the priority list anymore.

Plus, it depends what kind of business you're in. Somewhere like Cyprus wouldn't be a good option for most people financially if you're dependent on the local economy, zero tax or otherwise. If you want to build something brick and mortar or where a physical presence and traditional employees is otherwise really important, you better go where the money and the infrastructure and the customers are regardless of the taxes.

I know at least a dozen HNWIs who live in Malta, but they tend to be "off the grid" kinda people who are either retired early or solopreneurs. The empire builders go someplace else.
 

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Are there countries where it is easier to get wealthy?

And by easy I mean, where you don't have to grease the hands of bureaucrats and local gangs on every step of your business.

Avoiding local gangs is pretty easy in safe, wealthy countries. As for avoiding the other gang, well...

Actually upon looking this up, in general it looks like they're leaving high tax countries and moving to lower tax areas.

Not exactly because you looked at corporate taxes only. Canada is green on your map when it comes to business taxation but if you look at personal tax rates it's a very high-tax country with rates going up to 54% in Nova Scotia. Same with Australia, yellow on the map but highest tax rates are 47%.

Just to compare, in Brazil personal tax rate is at most 27.5%, while it's 30% in India and Indonesia, and 40% in Turkey (still much lower than in Australia or Canada). But of course, there are also exceptions like China with 45% and Russia with 47% so if they can have a better lifestyle and escape oppressive governments while paying the same taxes then it makes sense to move elsewhere.

Social mobility is the movement of individuals, families, households, or other categories of people within or between social strata in a society. It is a change in social status relative to one's current social location within a given society. It is movement within between layers or tiers in an open system of social stratification.

Interesting, thanks for sharing the map.

I've had this discussion with friends a few times. We always came to the conclusion that countries like Switzerland are a good option if you're already rich.

The difference between paying 0% tax and 40% tax is astronomical in terms of the length of time it takes to achieve financial freedom. When you already have financial freedom, maybe it's not up top of the priority list anymore.

Plus, it depends what kind of business you're in. Somewhere like Cyprus wouldn't be a good option for most people financially if you're dependent on the local economy, zero tax or otherwise. If you want to build something brick and mortar or where a physical presence and traditional employees is otherwise really important, you better go where the money and the infrastructure and the customers are regardless of the taxes.

I know at least a dozen HNWIs who live in Malta, but they tend to be "off the grid" kinda people who are either retired early or solopreneurs. The empire builders go someplace else.

That makes a lot of sense, thanks for sharing your thoughts.
 
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SamRussell

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UHNW individuals moving to a different country, and moving their tax liability to a different country are two different things - it's an assumption to think they are moving all their taxable assets (property, business etc) with them.
 

MTF

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UHNW individuals moving to a different country, and moving their tax liability to a different country are two different things - it's an assumption to think they are moving all their taxable assets (property, business etc) with them.

That depends on the CFC laws. If you move to a country with strong CFC laws it's very difficult to avoid paying taxes. And you still need to pay individual taxes there anyway.

But I guess that UHNWIs have access to the best lawyers in the world and probably know ways to avoid it.
 
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