The Reason that 90% of China’s Wealthy Want to Spend Their Retirement Abroad- What is the Most Popular Destination for Emigration?
A survey of the Hurun research institute revealed that 90% of China’s HNWI (families with a net worth of 1.5 to 31 million USD) are considering “emigrating to another country after retirement”. The introduction of an international tax evasion act known as “CRS” is the biggest factor causing the wealthy to emigrate from the country.
As for the most popular emigration destination for these wealthy people, the United States has remained in first place for the fourth consecutive year. Britain and Ireland both climbed the ranks by one and four places and came in second and third places respectively.
The Score of Popular Emigration Countries of Wealthy Chinese
10th The Republic of Cyprus 6.3 points
9th The Republic of Malta 6.4 points
8th Spain 6.5 points
7th Portugal 6.7 points
6th Greece 7.0 points
5th Australia 7.5 points
4th Canada 7.8 points
3rd Ireland 7.9 points
2nd UK 8.5 points
1st USA 8.7 points
Contributions of the Trump Regime Tax Cut Policy and the Cheap Pound
The rankings come from a survey conducted jointly by Hurun and the Visas Consulting Group from March to June of 2018 from a total of 224 responses from Chinese HNWI who have already moved overseas or are considering emigration and have an average net worth of more than 4.5 million USD.
The countries were ranked based on popularity by China’s elites on the basis of eight categories (education, investment, immigration policy, real estate purchase, individual taxation, medicine, visiting visa requirements, and ease of living).
Britain and Ireland increased their score from 2017 by 0.1 and 1.6 points respectively, to come in the top three while the United States maintained its lead in first.
The biggest reason that the United States attracts China’s wealthy is the same reason as that of the 2017 ranking: “Education”, “travel visas”, “ease of living”, and the Trump regime’s “tax reduction policy” all had a positive effect.
Britain, which raised its rank despite Brexit becoming imminent, continues to hold onto expectations that London will continue to maintain its position as a world financial center. It is popular because many parents wish to provide their children with a “British style elite education”. High-quality medical and welfare systems were also cited as reasons.
Ever since the referendum regarding Britain’s withdrawal from the EU, the interest of Chinese HNWI in Britain as an environment that is easy for overseas investments has increased due to the slump of the weakened pound.
With a great score and ranking increase, Ireland has a vast amount of nature, an established social welfare system, and a low tax rate. It has the potential to become the “dark horse of the immigrant industry”. Since it is also a world leader in advanced technology fields such as computer science, it is expected to achieve further growth in the future.
Japan is the most popular real estate investment destination in the Asian region
Real estate investment is a key point of consideration when HNWIs emigrate to foreign countries. Los Angeles, New York, Boston, San Francisco and Seattle in the United States account for the top 5 popular cities and capital cities. Two other Canadian cities, Vancouver and Toronto, London, and Melbourne are also in the top ten.
Japan is ranked 12th and is the most popular in Asia. However, the proportion of respondents who said “I would like to buy real estate in Japan” decreased by 1.1 points from the 2017 ranking. Respondents who wished to invest in real estate in Singapore, which ranked 14th, and Hong Kong, which ranked 17th also decreased by 1.0 and 0.8 points respectively. It is speculated that attention towards foreign real estate investment in the Asian region is weakening among Chinese HNWI. In contrast, Los Angeles and New York both increased by 2.5 points, Boston increased by 3 points, and London increased by 6.5 points.
For HNWI, “cost-effectiveness” is the deciding factor for purchasing real estate abroad. It is no wonder that the interest in London, where the pound experiences a decline, has increased drastically. “Investment value”, “property rights”, “location”, and the “ease of acquiring identification for immigrant status” were also taken into consideration.
New reasons why 90% of Chinese HNWI want to spend the rest of their life abroad
What should be noticed from this survey is that more than 90% of the respondents are considering spending time overseas after retirement.
In addition to the traditional “reasons for emigration” such as education, social welfare systems, and convenient transportation, “the introduction of the Chinese CRS” was the biggest reason in the latest survey. “CRS (Common Reporting Standard)” is a common reporting standard established by the OECD in 2014 as a measure to prevent international tax evasion.
Financial institutions in participating countries and regions are attempting to report non-migrant financial account information to tax authorities and to try to share the information among other tax authorities. According to information from Price Waterhouse Coopers on July 13, 2018, 42 countries including China are currently participating.
Perhaps this also applies to wealthy people in other countries, but the strengthening crackdown on tax avoidance and tax evasion is a threat to the peaceful retirement lives of wealthy Chinese and the feeling that they “want to protect their assets even if they have to leave their home country” is increasing.
According to a research report from another company, the “Chinese Luxury Consumer Survey, 2018”, 12% of Chinese HNWI have already emigrated from China or are in the process of doing so, and 37% are not waiting until retirement and are considering emigration now. The percentage of people who want to emigrate right now is 10 points lower than it was in 2017.