Investment Migration – From: Hong Kong

There are several reasons why millionaires are leaving Hong Kong.

1. Political unrest: Hong Kong has experienced significant political unrest in recent years, particularly with the introduction of the controversial extradition bill in 2019, which led to widespread protests. The subsequent enactment of the National Security Law in 2020, which gives China greater control over the region, has raised concerns about the erosion of civil liberties and the autonomy of Hong Kong’s legal system. There have been clashes between pro-democracy activists and the government. These political developments have prompted many individuals, particularly the wealthy, to start relocating to countries with more stable political environments.

2. Economic uncertainty: Traditionally known for its robust economy and favorable business environment, Hong Kong has been a global financial hub, attracting businesses and wealthy individuals. However, the political unrest and the impact of the COVID-19 pandemic, leading to a recession starting in 2020, have introduced greater economic uncertainty. The ongoing trade tensions between the United States and China, along with the potential for changes in Hong Kong’s economic relationship with the mainland, have created concerns about the long-term economic prospects of the city. Many millionaires are seeking more stable and predictable business environments elsewhere.

3. Taxation: Hong Kong has long been known for its favorable tax environment, with relatively low tax rates and no capital gains tax or estate tax. However, there have been discussions and proposals to introduce new taxes or increase existing taxes in the city. The potential changes in taxation policies have affected the attractiveness of Hong Kong as a financial hub for millionaires seeking tax advantages, leading many to relocate to jurisdictions with more favorable tax regimes.
     
4. Wealth preservation and diversification: Many millionaires are looking to diversify their assets and reduce their exposure to Hong Kong, and even more so to China. They are concerned about the concentration of their wealth in a single location and want to spread their investments across different countries to mitigate risks. This strategy is driven by the desire to protect their wealth, preserve their assets, and take advantage of investment opportunities worldwide.
     
5. Lifestyle and education: Some wealthy individuals choose to relocate for personal reasons, such as lifestyle preferences or educational opportunities for their children. They may be attracted to countries with lower taxes, better healthcare systems, safer environments, or higher-quality education options. These factors can play a significant role in the decision to leave Hong Kong, particularly for families with substantial wealth.

It’s worth noting that while there has been a notable outflow of millionaires from Hong Kong, the city continues to attract new entrepreneurs and investors due to its strategic location, strong infrastructure, and status as an international financial hub.