The global 1% face at least three critical decisions in a volatile world with varying national conditions and geopolitical risks: (a) in which countries/cities to reside; (b) in what nations and jurisdictions they wish to place their assets; and (c) how to allocate their wealth among different assets such as company shares, residential and commercial property, bonds, works of art, gold, and other valuable commodities.
This article will focus on the first choice. The geography of wealth creation and the international circulation of the rich matter for questions regarding migration policies, inequality, investment patterns, and other considerations. Although large fortunes have been accumulated in the periphery of the world economy, the bulk of wealth is still concentrated in the United States, Japan, UK, Germany, and China (table 1).
Given the history of economic and political instability and the potential for asset confiscation in emerging economies and developing countries, the wealthy often seek to establish their residence in high-income nations and special jurisdictions. The migration of the wealth-class is helped by the proliferation of investment migration schemes or citizenship/residence for investment programmes that grant permanent residence and/or citizenship in the host country in exchange for capital contributions to special government funds, the acquisition of real estate, and the opening of bank accounts.
Table 1: High net worth individuals by country, 2017
|Country||Adults (thousand) with wealth above USD 1 m||Percentage|
Source: Credit Suisse (2017a and b)
International mobility of the wealthy and the market for passports
The use of money to obtain residence rights that underpin a number of Investment Migration/Citizenship by Investment programmes was explored, conceptually, by the economist Gary Becker (Becker, 1987), who argued that letting immigrants pay for the right to reside in another country was more efficient than subjecting them to lengthy waiting periods. His main policy recommendation was a payment system for visas and citizenship rights. However, there are good reasons to avoid treating immigration rights as a commodity — in this case, citizenship or residence permits — that is obtained in exchange for money. The market mechanism may be more efficient than bureaucratic allocation in some cases but at the same time, money for citizenship programmes provide a substantial advantage to rich immigrants over non-rich migrants such as unskilled migrants and refugees who cannot afford to make hefty payments to get residence permits and citizenship. It is clear that existing inequalities of income and wealth will be amplified if migration policies in receiving countries are driven by the prospective immigrants’ ability to pay.
Some analysts have developed the concept of a ‘global market of nationalities’ (H&P and Kochenov, 2017). Using empirical indices of quality of nationality they find that governments compete to attract high-wealth migrants by offering favourable migration rules, financial security, high living standards, social peace, the rule of law, good educational facilities, and safe cities. The quality of nationality index gives considerable weight to the fact that possessing or acquiring the citizenship of certain countries allows for free-entry to a large number of countries, e.g., a citizen of Cyprus, an EU member state, has access, visa-free, to 172 nations.
Why the wealthy emigrate? Pull factors
We can identify four reasons why wealthy and talented individuals migrate to other nations: (a) in response to new opportunities for profit abroad; (b) to enlarge the scope of their work and attain international recognition; (c) to escape from political, religious, or ethnic persecution; and (d) to seek to shield their assets from taxation, financial uncertainty, and confiscation policies.
The financial empire built by the Rothschild family in the 19th century required an important degree of international mobility for those at the helm of the family business. In turn, successful entrepreneurial dynasties such as the Mellons, the Carnegies, the Rockefellers and the Soros family migrated to the United States where their careers and fortunes (including philanthropic activities) received a huge boost. On the other hand, during the 20th century, the wealthy classes fled from anti-capitalist revolutions such as the Bolshevik revolution of 1917, the Chinese revolution of 1949, and the Cuban revolution of 1959. As a consequence, ‘white Russians’ moved mainly to Europe, the Chinese to South Asian countries, and the Cuban bourgeoisie to the United States (particularly to the state of Florida).
Communist regimes have virtually disappeared and capitalism has been consolidated at a global level (albeit with a high incidence of financial crises and rising inequality). These epochal events have boosted the global circulation of the rich. Now, the main sources of risk are terrorism, financial uncertainty, and macroeconomic volatility.
Why the wealthy leave their home nations? Push factors
Push factors that prompt the wealthy to move abroad include economic insecurity, cumbersome taxation systems, inadequate protection of property rights, and economic and political crises. A class of new rich have emerged in a relatively brief period and circulate actively around the world: post-Soviet oligarchs, the very wealthy in China, rich elites in Latin America and Africa.
High inequality in the home country, though benefitting the wealthy, can also induce them to leave (or at least place part of their assets abroad) as unequal societies are more prone to experience macroeconomic and financial crises, and cycles of populism and authoritarianism. In contrast, these cycles are less commonly observed in more socially cohesive and egalitarian societies (e.g., Scandinavian and Central European nations) in which stability and good social services seem to encourage the rich to remain at home (Solimano, 2017).
In Latin America, some countries are more exposed to the flight of the wealthy. The economic collapse in Venezuela since 2014 – featuring hyperinflation, a scarcity of basic products, and massive output contraction, along with internal insecurity – has prompted massive emigration – including, of course, the wealthy – that has reached more than two million people.
The relationship between taxation levels and compliance costs and outflows of high wealth individuals is complex. The country which is probably the largest magnet for immigrants, the United States, has also shown a growing tendency for its citizens residing abroad to renounce their nationality, apparently for tax reasons. Interviews highlight that a main motivation for doing so is not so much a very high level of taxation but the complexity of the US tax system, including the high cost of filing taxes every year outside the US when tax experts conversant in that tax system are in short supply. On the other hand, countries with a high level of personal taxation such as Scandinavian countries do not figure prominently among the nations in which rich nationals depart from their home countries. Therefore, the relationship between the level of taxation and the departure of the very rich is not that straightforward. The rich may not like paying high taxes but if they receive – like any other citizen where provision is universal – good quality education and health services, good public transport and adequate pensions, the rich may, ultimately, decide to stay at home.
Becker. G.S. (1987). Why not let immigrants pay for speedy entry? In G.S. Becker and G.N. Becker (Eds.), The Economics of Life: From Baseball to Affirmative Action to Immigration. How Real-World Issues Affect Our Everyday Life. New York: McGraw-Hill.
Credit Suisse (2017a). Global Wealth Report, 2017.
Credit Suisse (2017b). Global Wealth Databook, 2017.
Ferguson N. (1999). The House of Rothschild: The World’s Banker 1849-1999. New York, London: Viking
Henley & Partners-Kochenov (2017). Quality of Nationality Index. Zurich: Ideas Verlag.
Prats, E. (2017). Commoditization of Citizenship. draft paper for IMC workshop, Geneva.
Solimano, A. (Ed.) (2008). The International Mobility of Talent. Oxford, New York: Oxford University Press.
Solimano, A. (2014). Economic Elites, Crisis and Democracy. Oxford, New York: Oxford University Press.
Solimano, A. (2017). Global Capitalism in Disarray. Inequality, Debt and Austerity. Oxford, New York: Oxford University Press.
Sumption, K. And Hooper, H. (2014). Selling visas and citizenship: Policy questions from the boom in investor migration programs. Washington DC: Migration Policy Institute
Surak, K. (2016). Global Citizens 2.0. The Growth of citizenship by investment programs. IMC Working Papers, 3. Geneva: Investment Migration Council.
 President, International Center for Globalization and Development in Santiago, Chile and External Director of the project “The International Mobility of the Wealthy and Global Inequality” at DOC-RI in Berlin, Germany. Contact: firstname.lastname@example.org.
 The patterns of country concentration of wealthy individuals with net worth above U$50 billion and billionaires may differ with China increasing their share. Small jurisdictions in Europe such as Monaco, Liechtenstein, Luxembourg, Cyprus, Malta and others have very high ratios of wealth per person. One- third of the population of Monaco (around 35,000 people) is composed of HNWIs (individuals with net wealth above U$ one-million). Note that foreign residents do not pay income taxes in Monaco.
 Small islands and independent jurisdictions enable the wealthy to acquire the nationality of countries (after a certain capital contribution and other formalities) with low or no income taxes. Very importantly, citizens from these nations have visa-free access to a large number of countries. A citizen of the Caribbean island of Saint Kitts and Nevis is entitled to free-visa entry to 152 countries.
 For an alternative position see Prats (2017) and Surak (2016), Sumption and Hooper (2014).
 presents the index. Solimano (2008, 2014) examines the international mobility of wealthy elites and talented people in the global age.
 This may be particularly valued by international investors who are nationals from certain countries (Russia, Iran and others) who face visa-requirements in a large number of countries.
 For an interesting biography of the Rothschild family and their times, see Ferguson (1999).