More than half of entrepreneurs are considering moving to a new country. Singapore is their top option

A recent HSBC survey of nearly 3,000 high-net-worth entrepreneurs reveals that 57% are considering international relocation within the next year, primarily driven by desires to expand business into new markets and access new investment opportunities (67% each), alongside a better quality of life (63%). Notably, tax efficiency was a minor consideration, cited by only a third of respondents and ranking eighth, significantly challenging the perception that wealth migration is predominantly tax-driven. Singapore and the UK were top destination choices, while the U.S. saw a decline in appeal.

Analysis

HSBC's recent survey indicates a significant intent among high-net-worth entrepreneurs to relocate internationally, with 57% considering a new residence within the next 12 months, a slight increase from 55% last year. The primary motivations for this mobility are overwhelmingly business-centric, with 67% citing a desire to expand into new markets and an equal percentage seeking new investment opportunities. A better quality of life also ranks highly at 63%, underscoring a holistic approach to relocation decisions.

Contrary to popular perception, tax efficiency is a minor consideration, cited by only one-third of respondents and ranking eighth overall, significantly behind factors like security and education. This challenges the narrative that wealth migration is predominantly tax-driven, even amidst discussions of wealth taxes in France and UK tax changes. Singapore (12%) and the UK (10%) emerged as the most desired destinations, while the U.S. saw its appeal decline from second to fifth place, despite maintaining 8% interest.

The survey highlights regional nuances, with French entrepreneurs showing the least interest in moving (39%) and U.S. respondents prioritizing cultural experience (72%). While business expansion is a key driver, entrepreneurs express more concern about adjusting to a new environment (40%) than reestablishing business operations (36%). This suggests a focus on personal integration alongside professional opportunities, reflecting a mildly positive sentiment towards strategic international diversification.

Key Decisions for Investors

• Investors should re-evaluate assumptions regarding wealth migration drivers, recognizing that business expansion and investment opportunities, not just tax efficiency, are primary motivators for high-net-worth individuals.
• Consider potential shifts in demand for luxury real estate and wealth management services in favored destinations like Singapore and the UK, while monitoring the declining relative appeal of the U.S. for this demographic.
• Monitor policy changes in countries like France and the UK, but understand that tax reforms alone may not trigger a significant wealth exodus if other business and lifestyle factors remain attractive.