Millionaires are fleeing from Russia en masse: statistics and causes
Economic downfall, the expanding list of sanctions, as well as increased control from both tax authorities and political elite resulted in a massexodusof dollar millionaires from Russia. Experts predict that by the end of 2019 more than 10,000 wealthy business owners, who have been replenishing the state treasury for years, will leave the country. According to the 2019 report by New World Wealth, Russian millionaires are increasingly thinking about immigration due to the unfavorable tax regime, poor environment,and crime.
Why are dollar millionaires leaving?
In 2018 alone, 7,000 dollar millionaires left the Russian Federation, which is one of the highest rates in the world. The first place belongs to China, where 15,000 rich people changed their citizenship during the year. India is the third, missing 5,000 wealthy citizens, followed by Turkey (4 000) and France (3 000).
The well-to-do Russians, who managed to accumulate over $ 1 mln in their foreign accounts, began to receive foreign passports en masse and move abroad to avoid financial sanctions from the Federal Tax Service. The federal body now has the right to conduct financial monitoring of the Russian citizens who are clients of any foreign bank. Strengthening control over foreign companies added to the impact. According to the new regulations, all Russians are obliged to inform about any foreign business and pay taxes on time, replenishing the state treasury.
The richest Russian millionaires, including the TOP 5
As of April 2019, there are 163,000 registered millionaires in Russia. Moreover, the oligarchs hold less than 75% of their money in bank accounts, which is very different from global figures. For example, the EU residents keep only 12% of funds in cash, whereas in the US the corresponding rate is only 9%. These figures let one assume that Russian dollar millionaires either want to hide part of their savings from the state or have little trust in the banking sector.
List of the richest people in Russia:
- Leonid Mikhelson ($ 24 bn);
- Vladimir Lisin ($ 21.3 bn);
- Vagit Alekperov ($ 20.7 bn);
- Alexei Mordashov ($ 20.5 bn);
- Gennady Timchenko ($ 20.1 bn).
The most successful Russians are engaged in oil and gas, banking, and metal industries that are notable for high asset returns and moderate risks. Despite the introduction of economic sanctions by the United States and the EU, the top rich have managed to maintain and even improvetheir financial status over the year.
The best destinations for Russian millionaires
When choosing a country to live in, dollar millionaires consider such proven locations as Switzerland, Australia, Canada, Israel, Singapore, and Portugal. Every year, about 12,000 millionaires from different countries move to Australia. The USA ranks the second with + 10,000 millionaires, Canada finishesthe top threereaching+ 4 000 millionaires. The wealthy citizens appreciate an advantageous business environment, low crime rates, highly developed health service, and favorable conditions for raising children.
There are overall 14 million people in the world who have assets worth over $ 1 million. The citizens of Liechtenstein, Switzerland, Luxembourg, Australia, and Norway are considered to be the richest ones. However, China, Japan, the United Kingdom, and Germany lead the way in terms of the general welfare. Unfortunately, Russia is outside the TOP-10 in this ranking.
According to information available at the beginning of 2019, millionaires from Russia mostly choose Switzerland and Israel to relocate.
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By Sergey Kurinniy