Have Wealthy Americans Had Enough?
The 2024 USA Wealth Report, a collaboration between investment migration consultancy Henley & Partners and New World Wealth, sheds light on a notable trend: an increasing number of affluent Americans are seeking alternative residency and citizenship options abroad. This phenomenon is indicative of a growing inclination among high-net-worth and ultra-high-net-worth individuals to diversify their geopolitical exposure amid concerns over political instability and social unrest.
According to the report, the United States leads the pack in terms of the volume of citizens exploring residence and citizenship-by-investment programs. Over the past five years, inquiries from Wealthy American citizens regarding these programs have surged by a staggering 500%. Such initiatives typically involve making a substantial investment and fulfilling residency requirements in another country in exchange for residency or citizenship rights. Each participating country sets its own criteria, including investment thresholds, residency durations, and due diligence procedures.
It’s not just Henley & Partners noting this trend; other migration consultancies are observing a similar surge in interest among wealthy Americans seeking secondary residences or citizenships. This shift is significant, as it marks a departure from the historical trend where such programs were primarily pursued by individuals from regions facing political oppression or economic instability.
The report highlights popular destination countries for American applicants, including Greece, Italy, Malta, Portugal, and Spain. These nations not only boast favorable climates and rich cultural offerings but also offer relatively straightforward pathways to residency or citizenship without stringent residency requirements. For affluent Americans, these options serve as a contingency plan, providing a sense of security amidst uncertainty in their home country.
Various factors are driving this trend. Concerns about the political climate in the U.S., coupled with the prospect of policy changes such as proposed wealth taxes, are prompting individuals to explore alternatives. Additionally, fears about societal issues like mass shootings are influencing decisions, particularly among families with children. For some, the motivation extends to seizing international business opportunities or seeking jurisdictions with favorable tax regimes.
The notion of having a backup plan resonates strongly with many affluent Americans, even if they never intend to utilize it. David Lesperance, an expert in international tax and immigration, emphasizes the importance of having contingency measures in place, likening it to purchasing insurance against unforeseen events.
Mehdi Kadiri, head of North America at Henley & Partners, interprets the surge in demand for secondary citizenship or residency as a reflection of broader concerns about the trajectory of the U.S. With issues such as stagnant living standards and societal polarization on the rise, affluent individuals are hedging their bets by exploring alternatives abroad.
Despite these apprehensions, the United States remains a magnet for wealth creation and accumulation. The report acknowledges the country’s status as a global leader in private wealth, housing a significant portion of the world’s millionaires and billionaires. Cities like San Francisco, Austin, and Miami continue to attract wealthy individuals, with Florida emerging as a particularly appealing destination.
While some affluent Americans are diversifying their domestic footprint by relocating within the country, the allure of the American dream persists on a global scale. Despite its imperfections, the U.S. maintains its status as a preferred destination for ambitious individuals seeking prosperity and opportunity.
In essence, the 2024 USA Wealth Report underscores a nuanced narrative: while concerns about the domestic landscape prompt some affluent Americans to explore alternatives abroad, the enduring appeal of the United States as a bastion of wealth and opportunity remains undiminished.
