US still dominates the W10

The US is the largest wealth market in the world by some margin, accounting for 32% of total global wealth and 36% of the world’s millionaires (high-net-worth-individuals). The total private wealth held in the country currently amounts to USD 68.8 trillion. The US also experienced the greatest high-net-worth population growth of the world’s 10 wealthiest countries by 'total wealth'(the W10) last year, at 10%. China, while 2nd in the W10, has only a third of the US’s private wealth at USD 23.3 trillion, and its high-net-worth population grew by a comparatively low 4%.

However, dramatic shifts are on the horizon with the US’s 10-year high-net-worth growth forecast at 20% compared to China’s 50%. Hot on China’s heels is Japan in 3rd place with a total private wealth of USD 20.1 trillion. While Japan’s high-net-worth population grew by just 3% last year, its 10-year forecast growth is a healthy 30%. India, Germany, UK, Australia, Canada, France, and finally Italy complete the W10.

Dominic Volek, Group Head of Private Clients at Henley & Partners says “It’s no coincidence that each of the W10 countries has legislation in place granting residence rights to foreign investors — and five host formal investment migration programs. These countries are important investment migration markets in terms of both supply, thanks to their attractive and successful programs, and demand, due to their significant and growing populations of affluent investors.”

Indian investors lead investment migration drive

The Henley Global Citizens Report also reveals that Indian nationals topped the charts for enquiries received by the firm in 2021 by a significant margin, with growth of 54% compared to 2020 — a year which itself saw a 63% rise in interest shown by Indian investors. US citizens were next in line, with Henley & Partners receiving 26% more enquiries in 2021 after astonishing growth of 208% in 2020. Enquiries by Brits and South Africans shot up by 110% and 38%, respectively, in 2021.

Volek says “The rest of the nationalities in our Top 10 for enquiries in 2021 all come from the global south apart from Canada, in 9th spot, which saw remarkable growth of 86%. In 2022, we are seeing very similar trends, with early signs of exceeding last year’s stellar overall growth. The combination of W10 countries and developing economies that make up our Top 10 reflects the universal appeal of investment migration for affluent families. In addition to the traditional benefits of enhanced global mobility, residence and citizenship by investment programs offer a proven risk mitigation and growth diversification strategy in terms of wealth and legacy planning with the added lifestyle advantage of domicile optionality.”

Geopolitics drives demand throughout US, UK, and Europe

The northern hemisphere has become increasingly unpredictable over the past two years, contributing towards the high demand for residence and citizenship alternatives. Mehdi Kadiri, Head of North America at Henley & Partners says “The Americas are booming ¾ between 2019 and 2021, Henley & Partners saw a spike of 320% in new enquiries, mainly from US nationals. Demand has predominantly been driven by geopolitical upheaval in the US along with shifting political dynamics in several Latin American countries, as well as the global coronavirus pandemic (and its initial local mismanagement) and the associated travel restrictions and mobility risk.”

Stuart Wakeling, the Head of the firm’s London office points to the Brexit effect as a growth driver, saying “UK nationals still top the charts when it comes to the number of enquiries in Europe, with Henley & Partners seeing a 110% increase on 2020’s figures. The vast majority relate to what options Brits now have in terms of alternative residence or additional citizenship in the wake of the UK’s exit from the EU. The biggest growth in Europe, however, comes from Turkey, with a 148% increase in interest, which is why we opened a new office in Istanbul last year.”

Growth in Middle East and Africa driven by need for optionality and access rights

The Middle East and Africa have seen strong surges in investment migration solutions since the outbreak of the pandemic. Philippe Amarante, Head of the firm’s Dubai office, says “This applies both to inbound programs such as UAE’s golden visa options and outbound in the form of investors securing second or third homes via investment migration-linked real estate. Particular countries of interest in this regard are Greece, Portugal, and Spain. With the outlook for 2022 and related risks and uncertainty on a geopolitical level, the need for additional residence and citizenship options, and the recognition that they are indispensable assets to maintain optionality and access rights, is now widely accepted.”

Amanda Smith, Head of Henley & Partners South Africa, says “We saw a modest overall increase of 18% in enquiries from Africans seeking alternative residence and/or citizenship over the past 12 months. But by early February 2022, we had already received over 11% of total 2021 enquiries, a trend we predict will continue this year as wealthy investors scramble to diversify their domiciles at the same time as their investment portfolios in a bid to secure greater global access and optionality as a hedge against unrelenting market and political volatility. On the supply side, the Mauritius Residence by Investment Program is gaining traction as an excellent choice for both business owners and real estate investors, and there are reports of other African countries, such as Kenya, planning to launch investment migration programs.”

Demand on the rise in Asia and Oceania as pandemic recedes

Nirbhay Handa, Group Head of Business Development at Henley & Partners and Head of the firm’s Global South Asia team says “Investment migration continues to surge in South Asia, with the concept rapidly gaining greater public acceptance. A growing number of ultra?high- and high?net?worth investors focused on futureproofing themselves and their families are increasingly seeking out alternative residence and citizenship options. Henley & Partners saw a 52% increase in client enquiries in 2021 compared to 2020 across South Asia, and 2022 looks to be another year of significant growth.”

In East Asia, on the other hand, Covid has had a negative impact on enquiry numbers. Denise Ng, Director of Henley & Partners Hong Kong and Head of North Asia, says “Many Chinese nationals felt that China was a safer base as they believed it had tight control over the virus. Others adopted a wait-and-see approach and put their investment migration plans on hold. Yet the second half of 2021 saw the market begin to revive and as investors realized the importance of having back-up options to overcome global immobility and protect themselves from volatility by spreading risk and providing more secure options for their families — especially the next generations. As we enter the second quarter of 2022 there are positive signs that the East Asia market is really picking up. In January alone, we received 10% of total 2021 enquiries by East Asian nationals, and we believe this trend will continue.”

Southeast Asia and Oceania, which also faced some of the strictest Covid regulations, experienced a different trajectory. Scott Moore, Head of the Indonesia and Philippines offices at Henley & Partners says that lockdowns made many question their current domiciles. “From the mass exodus of expatriates to the severely restricted mobility of locals, Henley & Partners saw an extraordinary increase in enquiries as a result. As the pandemic worsened, many wealthy families saw the benefit of health security as a motivation to approach our firm. Having access to countries with more advanced healthcare and facilities, even when travel was restricted, was possible through residence and citizenship by investment. Now, as a new class of millionaires emerges with the rise of cryptocurrency, we find many investors seeking out the most tax-friendly jurisdictions to optimise their newfound gains. As enquiries build, we’ve extended our teams in both Singapore and Philippines to meet the increasing demand.”

Boosting national prosperity via sovereign equity

Dr. Juerg Steffen, CEO of Henley & Partners, says the pandemic has also seen a significant spike in the supply side of investment migration. “Over the last two years, many countries have created new programs or improved existing options to attract high-net-worth individuals, investors, or talented individuals. Welcoming these new residents and citizens brings considerable gains. Specifically, investment migration programs allow them to increase their sovereign equity, a concept pioneered by Henley & Partners. The premise of this approach, via residence and citizenship by investment programs, is to improve a country’s public finances and support its economic growth and employment creation without increasing its debt. In the current context of consecutive crises, which have slowed the world’s economy and affected many nations’ fiscal balances, it is unsurprising to see interest in investment migration surging. It works for sovereign states by diversifying their economies and creating new revenue streams, and it works for investors by diversifying their options, spreading their risks and creating new possibilities. It’s a classic win-win for both sovereign states and investors alike.”