Israel is losing its allure for millionaires as war shatters its image as a 'safe haven'
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- Israel has fallen out of the top 10 nations attracting migrating millionaires amid the war in Gaza.
- Henley & Partners said it shows how conflict can affect a country's appeal to wealthy investors.
- Despite this, the firm's Israel expert said he suspects the country will bounce back.
Israel is no longer among the top 10 countries attracting migrating millionaires, marking the first time in decades that it has fallen from the ranking, according to a new private wealth report.
The Henley Private Wealth Migration Report 2024, released Tuesday by investment migration advisory firm Henley & Partners, tracks the annual net inflows and outflows of millionaires.
It measures the difference between the number of high-net-worth individuals with investable wealth of $1 million or more who relocate to a country and those who emigrate from it.
Between 2013 and 2022, Israel attracted a net inflow of over 10,500 high-net-worth individuals, according to Henley & Partners.
However, the firm said events in 2023 reversed this trend — Israel flipped from a net inflow of 1,100 millionaires in 2022 to a net outflow of about 200 millionaires last year.
It described Israel's drop as a "major turnaround" amid the country's conflict with Hamas and the ongoing invasion of Gaza.
Dan Marconi, Senior Client Advisor at Henley & Partners Israel, said in a press release: "This seismic shift underscores how swiftly conflict can unravel a country's appeal to the world's wealthy and globally mobile."
"The ongoing war has not only shattered Israel's image as a safe haven but also threatened to overshadow its economic achievement," he added.
In an email to Business Insider, Marconi said it was not just the conflict that led to the outflow, but also controversial judicial reforms that raised the specter of civil unrest and created "a great deal of uncertainty."
He said this led many wealthy individuals to obtain additional citizenship.
According to Henley & Partners data, in 2023, inquiries about immigration programs in exchange for investments from Israelis increased by 232%.
Marconi said: "In light of this trend, many of them were forced to make alternative plans for emergencies, rather than necessarily leaving Israel."
Marconi told BI in a conversation that he thinks the trend reversal is temporary, and he suspects Israel may return to the top 10 in the coming years.
He said: "The fact you have a Plan B doesn't mean the image of Israel will be permanently damaged by this; it's just to have the optionality of having a second residence or second citizenship."
Despite the recent net outflow of millionaires, Marconi told Business Insider there remains a draw for wealthy individuals.
Economically, Israel offers enticing tax incentives, like a 10-year tax holiday on foreign earnings for new immigrants. Additionally, as the world's only Jewish state, he said it would always attract wealthy individuals seeking religious refuge.
In an article for Henley & Partners, Marconi also pointed out that Israel had long "stood out as a rare economic bright spot in a turbulent region."
Its booming tech sector, attractive tax incentives, and appealing climate, food, and culture have made it a hub for wealthy global investors.