Russia is losing millionaires

London (CNN Business) – Millionaires are leaving Russia Invasion of Ukraine And Western sanctions on the country.

Nearly three times as many Russian millionaires are expected to leave the country this year than in the pre-epidemic year 2019, according to Henley & Partners, which helps wealthy customers move abroad.

As Western sanctions make life harder for its elite, Russia is projected to suffer a net loss of about 15,000 high net worth individuals (HNWIs), which is defined as having more than US $ 1 million in assets by 2022, compared to 5,500. 2019, according to the report. This is about 15% of Russia’s millionaire population, he said.

Andrew Amoils, head of research at the analytics firm New World Wealth, which provided the data for the report, said Russia was suffering from “the bleeding of millions”.

“Wealth migration numbers are the most important indicator of an economy’s health,” he told CNN Business.

“It could also be a sign of the bad things to come, because HNWIs often go first … If you look at the decline of any major country in history, it’s usually before the rich move out of that country,” he added.

The Kremlin spokesman Dmitry Peskov dismissed the report in a press conference on Tuesday, saying the Russian government was “not paying attention”. [una] The tendency of millionaires to leave the country.

The migration rate between Russia’s rich and powerful fell sharply in 2020 and 2021 as the Kovit-19 epidemic closed international travels and borders.

But the trend of rich people leaving the country seen in the decade before the epidemic has resumed, now accelerated by the Russian invasion of Ukraine in February. According to the International Monetary Fund, the Russian economy is expected to shrink by 8.5% this year.

Western nations have imposed a round of sanctions on Moscow, including the expulsion of some Russian banks from the global payment network SWIFT and the freezing of half of the country’s international reserves. Dozens of Western companies, including some luxury retailers, have stopped doing business in the country.

According to Henley & Partners data, this year’s millionaire outflow is expected to be nine times higher than 2021.

“Long before sanctions were imposed … there was a tsunami of out-of-state capital, largely due to President Vladimir Putin’s increasingly capricious style and his demands to remain loyal to middle-class Russians.” And the rich, ”wrote Misha Kleini, a writer and journalist at Henley & Partners Analysis.

This year, most Russian immigrants are expected to move to southern European countries, where many already have second homes. But the United Arab Emirates, due to its zero tax rate, is increasingly attracting the country’s rich.

Emirates is expected to overtake the United States and the United Kingdom this year. Henley & Partners estimates that the country will have 4,000 HNWIs by the end of this year, with 1,000 arriving each year before the outbreak.

Amoils said the UAE was inspired by the elite as “a high-income international business hub with a reputation as a safe haven in the Middle East and Africa region”.

According to Capgemini, a technology consulting firm that uses the same $ 1 million limit as Henley & Partners, the global population of HNWIs increased by almost 8% last year.