For much of the modern financial era, the geography of wealth was relatively predictable.
London. New York. Geneva. Paris.
These were the cities and financial centres where wealthy individuals established businesses, managed investments, bought property and built their personal lives.
That geography is changing.
The wealthy are becoming increasingly international, and the jurisdictions competing for them are becoming increasingly diverse. The result is a new geography of wealth in which residence, investment, business and wealth management no longer necessarily occur in the same place.
Wealth Is No Longer Where the Money Is
One of the most important changes in international wealth management is the separation between where wealth is created, where it is invested and where its owner lives.
A successful entrepreneur may operate a business in London, invest through Luxembourg, bank in Switzerland and live in Monaco. A technology entrepreneur may run a company in the United States, maintain investments in Europe and establish residence in Dubai. A European family may own property in France, have a family office in Switzerland and use an investment fund based in another European jurisdiction.
The traditional assumption was that these activities would largely be concentrated in one country.
That assumption is becoming outdated.
The same phenomenon can be seen in the migration patterns of high-net-worth individuals. HNWIs are increasingly looking beyond their traditional financial centres when deciding where to live and where to establish their families.
The Numbers Are Beginning to Show It
In 2022, Henley & Partners projected significant movements of high-net-worth individuals between jurisdictions. The UAE was expected to attract approximately 4,000 millionaires during the year, while Switzerland was projected to attract approximately 2,200. Portugal and Greece were also expected to see substantial inflows, at approximately 1,300 and 1,200 respectively. The United Kingdom, by contrast, was projected to experience a net outflow of approximately 1,500 HNWIs.
These figures should not be interpreted as proof that wealthy people are abandoning the traditional financial centres. London, New York and Geneva remain deeply embedded in the global financial system.
They are evidence of something more interesting.
The competition for wealthy individuals is becoming global.
The significance is not simply the number of people moving from one country to another. It is the growing number of credible alternatives available to individuals whose wealth gives them the ability to separate residence from investment, and sometimes from business activity as well.
Why Are They Moving?
Tax is an important part of the answer.
But it is not the entire answer.
A wealthy individual choosing a new country of residence is usually making a much broader calculation. What is the tax regime? How stable is the political environment? Is the legal system reliable? Can the family live comfortably? Are there good international schools? Is there access to sophisticated financial services? Can the individual continue to operate their business? How easy is it to travel? What happens to wealth on death?
And increasingly:
How easy is it to leave again if circumstances change?
That last question is becoming more important.
The OECD had already recognised the growing significance of taxpayer mobility in its 2021 analysis of tax policy after COVID-19, noting that digitalisation was increasing the mobility of individuals and potentially making it easier, particularly for wealthy taxpayers, to relocate to jurisdictions where taxation was more favourable.
Wealthy people are not necessarily looking for a permanent home. They are looking for optionality.
That is an important distinction. The decision to establish a residence somewhere does not necessarily mean that an individual intends to sever all economic ties with their previous jurisdiction. In many cases, the objective is precisely the opposite: to create additional choices.
The Rise of the New Wealth Centres
The UAE is perhaps the clearest example.
Dubai and Abu Dhabi have developed into major international business and wealth centres without attempting to replicate London or Geneva. Their proposition is different: geographical positioning, modern infrastructure, international connectivity, a large expatriate business community and a highly competitive personal-tax environment. Contemporary 2022 analysis also highlighted the UAE’s ability to attract entrepreneurs, investors and internationally mobile wealth.
Henley & Partners described the UAE in 2022 as an international business hub and noted its appeal to wealthy individuals through its business environment, infrastructure, lifestyle and competitive tax rates.
Switzerland represents a different model.
Its appeal is based on political and institutional stability, wealth-management expertise, infrastructure and a long-established reputation among international investors. Switzerland also maintained its expenditure-based, or lump-sum, taxation regime for qualifying foreign nationals. The Swiss Federal Audit Office, in a publication dated August 24, 2022, confirmed that Swiss federal law permitted expenditure-based taxation for qualifying foreign nationals who had not been subject to unlimited Swiss taxation during the previous ten years and were not gainfully employed in Switzerland.
Portugal and Greece offer another proposition.
They combine European Union membership, lifestyle and investment or residence opportunities that can appeal to internationally mobile individuals. Henley’s 2022 analysis placed both among the leading destinations for projected millionaire inflows.
The European Union itself had recognised the growing importance of investor-residence programmes. In March 2022, the European Commission called on Member States to strengthen controls around investor residence schemes, illustrating how prominent these programmes had become in the broader competition for internationally mobile individuals.
Monaco represents yet another model.
It is not a major industrial economy. It does not need to be.
Its proposition is based on scarcity, security, location, infrastructure and an extraordinary concentration of international private wealth.
Italy offers a different proposition again. Its special regime for new residents allowed qualifying individuals transferring their tax residence to Italy to elect for a €100,000 annual substitute tax on foreign-source income. The Italian tax authority was still administering that regime in 2022.
The point is that these jurisdictions do not need to become the next London.
They only need to become the preferred destination for a particular segment of internationally mobile wealth.
The Three Different Decisions
Perhaps the most important distinction is between three decisions:
Where do I live?
Where do I invest?
Where do I structure my wealth?
Historically, the answer to all three questions was often the same.
Increasingly, it is not.
A person may decide to live in Monaco because of its personal-tax environment and proximity to France and Italy. That does not mean their investment portfolio moves to Monaco. Their assets may remain invested across Europe, the United States and emerging markets.
Likewise, an entrepreneur may live in Dubai while continuing to own a European operating business.
The residence decision and the investment decision are becoming separate.
That separation is one of the defining characteristics of modern wealth migration.
Tax Competition Is Only Part of the Story
This is important because discussions about wealth migration often focus too heavily on tax.
Tax matters.
But the most successful wealth centres understand that wealthy people are buying an entire environment.
They want security. They want infrastructure. They want efficient airports, international schools, quality healthcare, professional advisers and sophisticated banking. They want access to investment opportunities. And they want confidence that the rules will not change dramatically every few years.
The best jurisdictions therefore compete on more than tax.
They compete on quality of life and quality of institutions.
This is also why changes in investment-migration programmes can have consequences beyond the immediate immigration market. When governments alter the terms of a programme abruptly, investors can reconsider not only the programme itself but the jurisdiction’s broader credibility as a long-term destination. The experience of Malaysia’s MM2H programme is a useful example of how regulatory instability can affect perceptions of investment and migration policy.
Europe Is Becoming More Competitive
Europe remains one of the world’s most important regions for private wealth.
But it is no longer a single wealth market.
Different countries are competing for different categories of investor.
Switzerland remains a traditional wealth-management centre. Monaco attracts an exceptionally concentrated population of international wealth. Portugal and Greece have used residence and investment programmes to attract internationally mobile individuals. Italy has developed special tax arrangements for wealthy new residents, while Malta and Cyprus offer their own combinations of residence, taxation, investment and lifestyle advantages.
The result is fragmentation.
There is no longer one obvious European destination for every wealthy individual.
Instead, there is a market of jurisdictions, each offering a different combination of advantages.
This broader shift is part of a trend that has been developing for years: wealth is becoming increasingly sensitive to jurisdictional choice.
The Wealthy Are Diversifying Their Residence
There is another consequence.
Wealth diversification is becoming increasingly connected with geographical diversification.
An investor may diversify their portfolio between equities, bonds, real estate and private equity.
But they may also diversify their geographical exposure.
They may maintain assets in several countries. They may have companies in several jurisdictions. They may hold different residences or citizenships. They may establish succession structures that operate internationally.
This is not necessarily about avoiding tax.
It is about reducing dependence on any one jurisdiction.
For someone with substantial wealth, jurisdictional diversification can serve much the same purpose as asset diversification: it can reduce concentration risk.
The objective is not necessarily to abandon one country.
It is to avoid becoming entirely dependent upon it.
Optionality Has Value
For wealthy investors, optionality itself has become an asset.
If a person has spent thirty years building a business in one country, moving may be extremely difficult. If, however, the individual has already established international banking relationships, investment structures, professional advisers and residence options elsewhere, the cost of moving becomes considerably lower.
That changes behaviour.
A country does not necessarily need to lose a wealthy individual today for that individual to become less economically committed to the country.
The decision may be gradual.
First, the second home.
Then the investment account.
Then the family office.
Then the children’s education.
Then tax residence.
Eventually, the centre of gravity of the family may have moved without any single dramatic decision.
This is one reason the concept of optionality is becoming increasingly important in investment migration. Residence can become an additional layer of wealth diversification rather than a binary decision to leave one country for another.
The New Geography Is About Centres of Gravity
This is why traditional measures of wealth migration can sometimes be misleading.
The question is not simply:
Where does the wealthy person live?
The more important question is:
Where is the centre of gravity of that person’s economic life?
A wealthy individual can have a residence in one jurisdiction, a business in another, investments in several others and advisers spread across the world.
The country that captures the greatest share of that economic activity is not necessarily the country in which the individual spends the most nights.
This distinction will become increasingly important.
A residence permit alone may tell us very little about where a family’s capital is managed, where its businesses are located, where its children are educated or where its next investment will be made.
What Does This Mean for Traditional Financial Centres?
London, New York and Geneva are not disappearing.
They remain extraordinarily powerful financial centres.
But their monopoly over international wealth is weakening.
The new competitors do not necessarily need to replace them.
They can simply take one part of the relationship.
Dubai can take the entrepreneur.
Monaco can take the European family.
Switzerland can take the wealth-management mandate.
Singapore can take the Asian family office.
Portugal or Greece can take the residence decision.
London may still retain the investment bank, private equity manager or lawyer.
The same wealthy individual can therefore be economically connected to all of them.
Singapore is a particularly good illustration of this development. In February 2022, the Singapore Economic Development Board reported that approximately 700 family offices were operating in the country at the end of 2021, citing the country’s rule of law, family-office ecosystem, connectivity and standard of living as important attractions.
By August 2022, Singapore’s EDB was describing the country’s family-office sector as having expanded rapidly, with the number of family offices almost doubling from approximately 400 at the end of 2020 to 700 a year later.
This is precisely the new model.
Singapore does not need to replace London as Europe’s financial centre.
It needs to capture a different part of the international wealth relationship.
The Competition Is No Longer for Capital Alone
This is perhaps the most important change.
For decades, governments competed primarily to attract capital.
Today, they increasingly compete to attract the people who control capital.
That is a different proposition.
Capital can be invested almost anywhere.
The owner of that capital is much harder to attract and much easier to lose once alternatives become credible.
This explains why residence programmes, special tax regimes, family-office initiatives and investment migration programmes have become increasingly important.
Governments are competing for the economic ecosystem surrounding wealth, and that ecosystem is often considerably more valuable than the initial investment itself.
The Singapore example demonstrates the point particularly well. In September 2022, Singapore’s Finance Minister described the country’s growing family-office population as part of its broader wealth-management ecosystem, highlighting the professional services, investment activity and economic value associated with these structures.
The competition is therefore no longer simply about attracting money.
It is about attracting the infrastructure around money.
The New Map
The geography of wealth is therefore becoming more complicated.
The old model was concentrated.
The new model is distributed.
London may remain the investment centre.
Monaco may become the residence.
Switzerland may manage the wealth.
Dubai may host the entrepreneur.
Luxembourg may provide the investment vehicle.
France may hold the property.
The United States may provide the technology investment.
None of these arrangements is inherently unusual anymore.
They are simply different components of the same international wealth structure.
This is why the question of wealth migration should not be reduced to a simple question of where millionaires are moving.
The more important question is which jurisdictions are capturing the different components of their economic lives.
Where Does This Leave Governments?
Governments should pay attention to this change.
A wealthy individual does not have to move everything to leave.
They can move incrementally.
And once the economic centre of gravity begins moving, reversing that process can be difficult.
The policy challenge is therefore not simply to ask how much tax a wealthy individual can pay.
It is to ask what the country wants to be competitive for.
Capital?
Businesses?
Family offices?
Entrepreneurs?
Investors?
Residents?
Or all of them?
The countries that understand this distinction will have an advantage.
The countries that focus exclusively on the tax revenue generated by existing wealth may overlook the broader economic value created by attracting the people who control that wealth.
The New Geography of Wealth
The world’s wealthy are not abandoning the traditional financial centres.
They are building around them.
That is the important distinction.
Wealth is becoming more international, more mobile and more geographically diversified.
The wealthy individual of the future may not have a single financial home.
They may have a network.
And the jurisdictions that understand how to become an important part of that network will increasingly compete for the most valuable economic asset of all:
the people who control the capital.