Millionaires are leaving Russia after the country invaded Ukraine and imposed sanctions on the West.
Nearly three times more Russian millionaires are expected to leave the country this year than in 2019, according to a report by Henley & Partners, a firm helping wealthy clients move abroad.
As Western sanctions make life difficult for its elite, Russia is expected to suffer a net loss of about 15,000 high-net-worth individuals (HNWIs) – as people with more than $1 million in wealth in 2022 Defined – compared to 5,500 in 2019. to report. That’s about 15% of Russia’s millionaire population, he said.
Andrew Amoils, head of research at New World Wealth, the analytics firm that provided data to the report, said Russia is “bleeding millionaires”.
“Wealth migration is a very important indicator of the health of the number one economy,” he told CNN Business.
“It can also be a sign of bad things to come because HNWIs are often the first to leave… If you look at the downfall of a major country in history, it is usually preceded by the emigration of wealthy people from this country. It happens.” He added.
Dmitry Peskov, Kremlin spokesman In a call with reporters on Tuesday, the report was dismissed, saying the Russian government “did not pay attention”. [a] The trend of millionaires leaving the country.
Migration rates among Russia’s rich and powerful fell sharply in 2020 and 2021 as COVID-19 halted international travel and closed borders.
But the trend of wealthy people leaving the country in the decade before the pandemic resumed and now is accelerating after Russia’s invasion of Ukraine in February. According to the International Monetary Fund, the Russian economy is expected to contract by about 8.5% this year.
The West has imposed round after round of punitive sanctions on Moscow, including expelling some Russian banks from SWIFT, the global payments network, And almost half of the country’s international reserves have begun to freeze. Dozens of Western companies, including luxury retailers, have stopped doing business in the country.
According to data from Henley & Partners, the outflow of millionaires this year is expected to exceed nine times that of 2021.
“Long before the sanctions were imposed … there was a tsunami of the capital leaving the country, driven primarily by the increasingly cynical style of government of President Vladimir Putin and his demands for loyalty to middle-class Russians and the wealthy, Misha Glenny, a writer and journalist, wrote in an analysis for Henley & Partners.
This year, most Russian migrants are expected to settle in southern European countries, where many already have second homes. But the United Arab Emirates is increasingly becoming more attractive to the country’s wealthy, partly because of its zero tax rate.
The United Arab Emirates is expected to overtake the United States and the United Kingdom as the first destination This year for millionaires on the go. Henley & Partners predicts the country will host 4,000 HNWIs by the end of the year, up from about 1,000 each year before the pandemic.
Amoils said the elite were attracted to the UAE as an “international trade hub with a high-income economy”, which “has a reputation for being a safe haven in the Middle East and Eastern Africa”.
The global population of HNWIs grew about 8% last year, according to research from Capgemini, a technology consultancy that uses the same $1 million limit as Henley & Partners.
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