Yacine Diallo and Pierre-Philip Leroux-Moga write for Agefi Luxembourg on the migration of high-net-worth individuals

The global population of high-net-worth individuals (HNWIs) is expanding, and we are on the brink of the largest intergenerational wealth transfer in history. This shift is happening amidst global economic uncertainty and significant government reforms, including tax regime changes. As a result, HNWIs are currently relocating in search of stability and asset protection, potentially affecting traditional European wealth capitals.

In the first article of the series, Yacine Diallo (Partner and Head of the Luxembourg office) and Pierre-Philip Leroux-Moga (Associate) write for Agefi Luxembourg on the great exodus of HNWIs.

This series aims to dissect the factors driving HNWI migration, examining the interaction between economic stability, tax policies, quality of life, and geopolitical dynamics. The surge in HNWIs and their wealth, particularly ultra HNWIs, has been bolstered by strong financial markets. However, the upcoming "Great Wealth Transfer" from baby boomers to their heirs is expected to be the primary driver of HNWI growth.

In 2024, a record number of elections worldwide occurred during a time of post-pandemic where armed conflicts are affecting the global economy. HNWIs are reassessing (potential) relocation of their residency due to a myriad of factors affecting some traditional "capitals of wealth" including inter alia  tax changes and political instability, leading to a significant migration of 128,000 HNWIs in 2024, with more expected in 2025.

The UK, once a magnet for HNWIs due to its financial history and favourable tax regime for non-domiciled residents, is experiencing a decline in appeal. Brexit, the pandemic, and tax reforms are prompting HNWIs to consider leaving, which could have a substantial impact on the UK economy.

France faces political instability and economic challenges, with potential tax measures targeting the wealthy and large corporations. This has led French HNWIs to contemplate relocation, though family ties and business interests complicate the decision.

The article concludes by highlighting the personal nature of relocation decisions for HNWIs and the various factors influencing their mobility. The next article in the series will explore the most attractive jurisdictions for HNWIs and ultra HNWIs seeking new homes.

Read the full article in Agefi Luxembourg here (page 6).