The narrowing fiscal space in developed economies has prompted many Western countries to raise taxes on the very rich, which, in turn, accounts for an increasing number of jurisdictions offering attractive packages for their relocation in their countries. This has culminated in an exodus of the very rich away from their home countries. But this is not the only reason, as per Henly Private Wealth Migration Report 2025, a company that began tracking millionaire migration a decade ago.
Juerg Steffen, the CEO at Henly, maintains that “2025 marks a pivotal moment. For the first time in a decade of tracking, a European country leads the world in millionaire outflows. This isn’t just about changes to the tax regime. It reflects a deepening perception among the wealthy that greater opportunity, freedom, and stability lie elsewhere. The long-term implications for Europe and the UK’s economic competitiveness and investment appeal are significant.”
Henly’s report further notes that “a record-breaking 142,000 millionaires are projected to relocate internationally this year….the UK is forecast to lose a staggering -16,500 millionaires in 2025 — more than double the anticipated -7,800 net outflow from China, ranked second this year after topping the millionaire-loser leaderboard every year over the past decade. In stark contrast, the UAE retains its crown as the world’s leading wealth magnet, with a record net inflow of +9800 relocating millionaires expected this year — over 2,000 more than the US in second place at +7,500 new wealthy migrants are expected to make America home by year-end.”
And contends that the UK is not alone and other European countries high net worth individual are also migrating as per compiled data: France -800, Spain -500 and Germany – 400 millionaires. The beneficiaries are Switzerland +3000, Italy +3600, Portugal +1400 and Greece +1200 and their success is sourced to favourable tax regimes, lifestyle appeal and active investment migration programmes.
Henly itemized three factors that are key drivers for millionaires’ departure. First, political uncertainty and tax fears. Second, desire for control with Henly arguing that millionaires seek greater clarity over their finances and future, especially in times of political instability. And finally, tax investment and climate.
The popularity ratings of those who head governments in the West in general and the UK, France and Germany in particular, are at a historic low, which has given rise to considerable political uncertainty. There are legitimate fears in these countries of a looming significant increase in taxation after an agreement was reached by NATO countries with US President Donald Trump to set aside 5 percent of their GDP on defence. In addition, the European Union (EU) signed a disastrous trade deal with the US recently, whereby the US would impose high tariffs on European imports – a measure that would not be reciprocated by the EU. This deal was brokered by the EU President Ursula von der Leyen, who is expected to face another vote of no-confidence within months.
There is overwhelming evidence that even during times when the considered opinion in Pakistan was that there is political stability, few administrations completed their tenures. Political uncertainty has fluctuated between the perception of a government in power that it will rule indefinitely (or for ten years at a minimum) as opposed to the on-ground reality, as no civilian prime minister has been able to complete his tenure during the past four decades. The second tier leadership however is granted access to a revolving door on condition that they change political loyalties; however, those who opt not to use the door make use of their iqamas/residency permits to migrate to their residences in foreign countries.
Pakistan’s tax structure is heavily reliant on indirect taxes, whose incidence on the poor is greater than on the rich, to the tune of 75 to 80 percent, which has raised poverty levels to a high of 44.7 percent. This is increasingly posing a threat to the socio-economic fabric of the country.
Given the global trend and Pakistan’s unique political circumstances coupled with Pakistan’s consistently low ranking in the corruption index (135 out of 180 countries in 2024 against the 2023 ranking of 133, down from the 2022 and 2021 ranking of 140), the widespread domestic perception is that all the stakeholders, inclusive of politicians and bureaucrats, are “gobbling up” the country’s resources.
In this milieu Khawaja Asif, the Federal Minister for Defence, on 5 August 2025 on X launched a rambling tirade reproduced here: “more than half of the bureaucracy of our homeland has already acquired property in Portugal and is preparing to obtain citizenship. These are well-known bureaucrats. Yet, after devouring billions of rupees they are comfortably living a retired life. One of Buzdar’s closest bureaucrats has collected four billion rupees just in salami of his daughter’s wedding and is now calmly enjoying a retired life. Politicians on the other hand gobble up leftovers and make a fuss with neither plots nor foreign citizenship because they have to contest elections. This bureaucracy is polluting the sacred land of Pakistan.”
Khawaja Asif appears to be attacking: (i) a specific individual without any mention of the many politicians he is close to who own extremely expensive real estate abroad (though this would not apply to other preferred destinations including the United Arab Emirates that is currently on the Financial Action Task Force’s grey list). Additionally, he must know that there is no law against the amount of salami one can give to a bride or groom and if he is concerned about this payment’s corruption element then he should lobby for an appropriate legislation; and (ii) bank accounts abroad, particularly in the West. There are laws against politically exposed persons taking advantage of investment migration programmes as well as opening accounts in Western banks, with many Pakistanis with existing accounts requested by the banks to withdraw their money.
To conclude, one would hope that Khawaja Asif will proactively seek an amendment in local laws that would strengthen oversight on the actual wealth of favoured bureaucrats - the PML-N has its own share of such bureaucrats - as well as other elite groups and their close family members and put pressure on the negotiators at all relevant international fora to amend the laws to include barring those government officials with questionable source of wealth.
Copyright Business Recorder, 2025
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