15 Tax-Friendly Countries for High-Net-Worth Individuals
In this article, we will discuss 15 tax-friendly countries for high-net-worth individuals. If you want to skip our detailed analysis, you can go directly to 5 Tax-Friendly Countries for High-Net-Worth Individuals.
Millionaires' Wealth
Most wealthy people are becoming highly mobile these days and many of them move to other countries to avoid insanely high tax brackets. High-net-worth individuals looking for tax-friendly countries also seek a supportive macroeconomic environment for their business activities. Some millionaires prefer to move to tax havens such as the Cayman Islands, Bahamas, Kuwait, and the United Arab Emirates. These are also some of the leading countries with the lowest income tax rates in the world. While, some high-net-worth millionaires prefer the standard of life, safety, and healthcare facilities that a country offers over tax savings. It all depends on the choices and the perspective of a wealthy person. For instance, Switzerland has the highest proportion of millionaires, closely followed by the United States. Despite the individual income tax rate being 40% in Switzerland and 37% in the US, a total of the world’s 26.17% millionaires reside in these two countries jointly. The main reasons these countries have a huge population of millionaires are the highest level of living standards and massive business opportunities.
According to Credit Suisse’s Global Wealth Report 2023, the upper-middle segment with wealth between $100,000 to $1 million has tripled in size this century from 208 million to 642 million people, as of 2022. The upper-middle segment owns net assets worth $178.9 trillion, which makes up around 39.4% of global wealth. The top tier of high-net-worth individuals is relatively small in size, totaling around 59.4 million. The global millionaires have increased swiftly in the past few years and exceeded 1% of adults for the first time in 2020, although the figure dropped by 3.5 million in 2022. The high-net-worth individuals’ aggregate wealth has increased five-fold from $41.4 trillion in 2000 to $208.3 trillion in 2022 and their share of global wealth has jumped from 35% to 46%.
The US has the highest number of millionaires, with a total population of 24.48 million millionaires. China ranks second among the countries with the most millionaires in the world, having 6.19 million millionaires. Other countries with a large population of millionaires include Japan, the United Kingdom, France, Germany, Canada, and Australia, having 3.36 million, 2.85 million, 2.80 million, 2.68 million, 2.29 million, and 2.17 million millionaires, respectively. Other countries including Italy, Korea, the Netherlands, Spain, and Switzerland, each host approximately 2% of the global millionaires. India, Taiwan, and Hong Kong are home to the world's 1% millionaires. Australia, Germany, Spain, the Netherlands, and the United Kingdom are some of the countries with highest income tax rates in the world. According to Credit Suisse’s projection, the number of millionaires is expected to reach 86 million by 2027, while global wealth will increase by 38% by the same period.
Traditionally, the preference of millionaires from developing countries has been settling in more developed countries such as Canada, the US, and the UK. However, there has been a shift in millionaire migration, with renewed interest in Europe and emerging markets such as the Middle East and the Asia Pacific.
Leading Companies in Emerging Markets
Real Estate is one of the main industries that remains an area of focus for millionaires. High-net-worth individuals have huge investments in real estate overseas and buy houses worth millions when they relocate to a new country. Emaar Properties PJSC (DFM:EMAAR), UOL Group Limited (SGX:U14), and Jabal Omar Development Company SJSC (TADAWUL:4250) are the leading real estate firms from some of the leading tax-friendly economies.
Emaar Properties PJSC (DFM:EMAAR) is one of the leading multinational real estate development companies based out of the United Arab Emirates. On November 9, Emaar Properties PJSC (DFM:EMAAR) reported that it had a great nine-month period of sales, ending September 30, 2023. The premier real estate company recorded a 25% sales increase in the first nine months of 2023, reaching AED 28.9 billion or $ 7.9 billion. The strong performance has led to AED 18.4 billion in net profit for the first nine months of 2023, increasing by 42% compared to the first nine months of 2022. The increase in sales and net profit is attributed to Emaar Properties PJSC's (DFM:EMAAR) 20 successful launches of new projects across various master plans.
UOL Group Limited (SGX:U14) is a top real estate company which is headquartered in Singapore. On January 13, UOL Group Limited (SGX:U14) reported its successful contribution to 60 children from ComLink+ families. The company along with its hotel subsidiary, Pan Pacific Hotels Group (PPHG), will make a $100,000 cash donation to ComLink+. On November 21, 2023, UOL Group Limited (SGX:U14) announced the successful sales at Watten House on the first day of the private launch. Almost 57% or 102 units were sold on the first day at an average price of $3,230 per square foot. The Watten House project is an 80:20 joint venture between UOL Group Limited (SGX:U14) and its property subsidiary Singapore Land Group Limited (SGX:U06).
Jabal Omar Development Company SJSC (TADAWUL:4250) is a leading real estate firm based out of Saudi Arabia. On January 22, Jabal Omar Development Company SJSC (TADAWUL:4250) announced that it had obtained the license from the Ministry of Tourism to operate the second tower of the Jabal Omar Jumeirah Hotel with a five-star rating in Makkah, Saudi Arabia. The second tower will comprise 244 luxurious and modern-style rooms and suites, along with other amenities. The company expects the development of the second tower of the Jabal Omar Jumeirah Hotel to have a positive financial impact on Jabal Omar Development Company SJSC’s (TADAWUL:4250) revenue in 2024.
With this context, let’s take a look at the tax-friendly countries for high-net-worth individuals.
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Our Methodology
To compile the list of tax-friendly countries for high-net-worth individuals, we first shortlisted the countries with at least 100,000 millionaires. Then we narrowed our list to 15 tax-friendly countries based on the minimum tax rates. We counted the millionaires from each country to understand where the most millionaires live. We chose the millionaires list because by definition high-net-worth individuals’ net worth lies between $1 million to $50 million. The data for the list of millionaires by country was taken from Credit Suisse's 2023 Global Wealth Report. The personal income tax rate data was obtained jointly from PwC and Trading Economics, updated as of December 2023 and January 2024. The tax-friendly countries for high-net-worth individuals are ranked in ascending order of their personal income tax rates. For the countries with similar personal income tax rates, we have ranked them based on the number of millionaires.
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15 Tax-Friendly Countries for High-Net-Worth Individuals
15. New Zealand
Personal Income Tax Rate: 39%
No. of Millionaires: 347,000
New Zealand’s 9.55% of individuals are millionaires, with a total of 347,000. The personal income tax rate is 39% in New Zealand. The island country ranks 15th among the tax-friendly countries for high-net-worth individuals.
14. India
Personal Income Tax Rate: 39%
No. of Millionaires: 796,000
India is one of the largest economies in the world and is home to 796,000 millionaires. India's personal income tax rate is 29% and ranks among the tax-friendly countries for high-net-worth individuals.
13. United States
Personal Income Tax Rate: 37%
No. of Millionaires: 24.48 million
The United States is home to the largest population of millionaires with a total of 24.48 million millionaires, as of 2022. The United States has an individual income tax rate of 37%. The US ranks among the tax-friendly countries for high-net-worth individuals.
12. Indonesia
Personal Income Tax Rate: 35%
No. of Millionaires: 191,000
Indonesia has a personal income tax rate of 35% and a total of 191,000 millionaires. Indonesia is placed 12th among the tax-friendly countries for high-net-worth individuals.
11. Mexico
Personal Income Tax Rate: 35%
No. of Millionaires: 318,000
Mexico is home to 318,000 millionaires and has a personal income tax rate of 35%. Mexico ranks 11th among the tax-friendly countries for high-net-worth individuals.
10. Canada
Personal Income Tax Rate: 33%
No. of Millionaires: 2.29 million
Canada is one of the biggest economies in the world and home to almost 2.29 million millionaires. With a personal income tax rate of 33%, Canada ranks among the tax-friendly countries for high-net-worth individuals.
9. Poland
Personal Income Tax Rate: 32%
No. of Millionaires: 100,000
Poland has a personal income tax rate of 32% and a total of 100,000 millionaires. Poland ranks among the tax-friendly countries for high-net-worth individuals.
8. Iran
Personal Income Tax Rate: 30%
No. of Millionaires: 147,000
Despite being sanctioned by the US, Iran has strengthened its economy and stake in the region. Iran has 147,000 millionaires and a personal income tax rate of 30%. Iran ranks among the tax-friendly countries for high-net-worth individuals.
7. Brazil
Personal Income Tax Rate: 27.50%
No. of Millionaires: 266,000
Brazil has a personal income tax rate of 27.50% and is home to 266,000 millionaires. Brazil is one of the tax-friendly countries for high-net-worth individuals.
6. Norway
Personal Income Tax Rate: 22%
No. of Millionaires: 236,000
Norway is home to 236,000 millionaires and has a personal income tax rate of 22%. Norway ranks sixth among the tax-friendly countries for high-net-worth individuals.
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Disclosure: None. 15 Tax-Friendly Countries for High-Net-Worth Individuals is originally published on Insider Monkey.