Saturday, February 13, 2021

Rich Pakistanis Among World's Top Nationalities Migrating Abroad

Rich Pakistanis ranked third in the world for making inquiries to migrate abroad last year, according to a report by Henley and Partners. High net worth individuals (HNWIs) from India topped the list of those seeking to migrate, followed by Americans and Pakistanis. Pakistan is among nations that experienced "significant wealth outflows" in 2019, according to Afrasia Bank.  There has been a 25% increase in the number of HNWIs enquiring about citizenship-by-investment as opposed to residence-by-investment programs since the coronavirus was first reported nearly a year ago, indicating that wealthy international investors are considering a more permanent change.    

Pakistan Among Countries With Significant Wealth Outflow. Source: Afrasia Bank

In 2019, the UAE initiated a new system for investment-based long-term residence visa called Iqama. It enables foreigners to live, work and study in the UAE without the need of a national sponsor and with 100% ownership of their business on the UAE’s mainland. These visas are issued for 5 or 10 years and will be renewed automatically.

Several countries in Europe and the Caribbean are offering residency visas or a second passport and citizenship. Popular destinations include New Zealand, the Caribbean Islands, Portugal, Malta, Spain, Cyprus and Greece. Requirements for investment-based citizenship vary from country to country but is usually about 10 years of continuous residency. Some countries, like Greece, offer citizenship after a shorter period of 7 years.  Others have no stay requirement at all. European Union (EU) member nations like Cyprus, Greece and Malta offer EU passports. 

Many rich Pakistanis are continuing to flock to the United Kingdom. Recent US FinCEN (Financial Crime Enforcement Network) files show that the United Kingdom (UK) is the biggest global center for money laundering. An earlier report issued by the British Crime Agency put Pakistan among the world's top sources of money laundering in the United Kingdom. 

FinCEN leaks represent just the tip of an iceberg. The leaked 2,100 FinCEN files covering $2 trillion worth of transactions that ICIJ (International Consortium of Investigative Journalists) and Buzzfeed reporters got their hands on represent just a small sliver of the roughly 12 million SARs FinCEN has received since 2011. Pakistan's Prime Minister Imran Khan has repeatedly raised the issue of the West's inaction in stopping the illicit flows of hard currencies from developing nations to the developed world. Money laundering and other financial crimes affect the economic roots of a nation like Pakistan and slow down its human and socioeconomic development.

Related Links:

Haq's Musings

South Asia Investor Review

Half a Million Pakistanis Migrating Abroad Each Year

The West Enables Corruption in Developing Nations

Did Musharraf Steal Pakistani People's Money?

Pakistan Economy Hobbled By Underinvestment

Raymond Baker on Corruption in Pakistan

Nawaz Sharif Disqualified

Culture of Corruption in Pakistan

US Investigating Microsoft Bribery in Pakistan

Zardari's Corruption Probe in Switzerland

Politics of Patronage in Pakistan

Why is PIA Losing Money Amid Pakistan Aviation Boom?

Riaz Haq's Youtube Channel

PakAlumni Social Network


Mayraj F. said...

British started money laundering because of US's monetary imperialism.
Watch Michael Hudson 's video where he mentioned what US did to British in 1940s. Can figure out that's what led bBritish to set up tax havens.

Riaz Haq said...

Pakistanis ($10.6 billion) are the third largest investors in Dubai real estate, after India ($29.8 billion) and the UK ($14.7 billion), according to EU Tax Observatory:

This paper provides a thorough analysis of foreign investment in Dubai real estate. Cross-border ownership of real estate is a blind spot of existing statistics on international investments. Our data allow us to shed light on this under-studied aspect of financial globalization. A number of findings stand out. First, offshore real estate in Dubai is large—at least USD 146 billion in 2020, about twice as much as in London. Second, geographical proximity and historic ties seem to be important determinants of foreign investments in Dubai. About half of offshore Dubai real estate is owned by nationals of India, the United Kingdom, Pakistan, Saudi Arabia, and Iran. Other large investors in absolute terms include Canada, Russia, and the United States. Third, some countries have large holdings in Dubai relative to size of their economy, equivalent to 5%–10% of their GDP: conflict-ridden countries like Afghanistan, Syria, Yemen, and Sudan; autocracies like Eritrea, Azerbaijan and Kyrgyzstan. Last, by matching properties owned by Norwegians to administrative tax records in Norway (a country that taxes wealth), we find that the probability to own offshore real estate rises sharply with wealth, including within the very top of the wealth distribution. At least 70% of Dubai properties owned by Norwegian taxpayers were not reported for tax purposes in 2020.
These results inform ongoing debates about the measurement and regulation of cross-border wealth and have implications for global imbalances, for tax enforcement, and for assessing the effectiveness of recent policies aimed at improving the exchange of information between countries. There has long been a concern that real estate is used for money laundering and hiding wealth from tax authorities. However, to date there was very little data to quantify this issue, as most estimates of offshore wealth focus on financial assets. Our findings suggest that offshore real estate is quantitatively significant. Moreover, in the case of Norway, the bulk of this wealth appears to go unreported for tax purposes. This is despite the fact that Norway and Dubai agreed in 2015 to automatically exchange financial information under the common reporting standard. This finding illustrates the limitation of the current forms of international information exchange and suggests that additional policies—such as information sharing on the owners of real estate—may be required to create transparency and curb tax evasion through offshore financial centers.


First, offshore real estate in Dubai is large: at least $146 billion in foreign wealth is
invested in the Dubai property market. This is twice as much as real estate held in London
by foreigners through shell companies. Second, geographical proximity and historic ties
are key determinants of foreign investments in Dubai. About 20% of offshore Dubai real
estate is owned by investors from India and 10% by investors from the United Kingdom;
other large investing countries include Pakistan, Gulf countries, Iran, Canada, Russia, and
the United States. These patterns hold when focusing on the most affluent neighborhoods,
with the main difference that Indian investments become relatively smaller and Russian
investments larger. Third, a number of conflict-ridden countries and autocracies have
large holdings in Dubai relative to the size of their economy, equivalent to 5%–10% of
their GDP. This suggests that the official net foreign asset position of a number of lowincome economies is significantly under-estimated.

Riaz Haq said...

8,000 HNIs (super rich) may leave India this year. Here's where they are migrating

EU countries, as well as traditional favorites Dubai and Singapore, are gaining popularity among Indians.

The report also showed that the number of US dollar millionaires and billionaires in India will grow by 80% over the next 10 years, while it will only grow by 20% in the US and by 10% in France, Germany, Italy, and the UK.

According to the Henley Private Wealth Migration Dashboard, the UAE is predicted to draw the greatest net inflow of HNWIs globally in 2022 (at least 4,000).

Strict tax rules and reporting requirements in India, as well as the need for stronger passports, remain the primary factors driving the migration, according to the 2018 Henley Global Citizens Report, which follows private wealth and investment migration trends globally.


High-net-worth individuals (HNWIs): People or households who own liquid assets valued between $1 million and $5 million. Very-high-net-worth individuals (VHNWIs): People or households who hold liquid assets valued between $5 million and $30 million.