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Dan Marconi is a Senior Consultant and Team Lead at Henley & Partners in Israel.
For years, Israel has stood out as a rare economic bright spot in a turbulent region. The country’s thriving tech sector, nicknamed Silicon Wadi, along with its vibrant culture, Mediterranean climate, and attractive tax policies, drew ambitious entrepreneurs and investors from across the globe. Between 2013 and 2022, Israel attracted a net inflow of over 10,500 high-net-worth individuals, solidifying its position as one of the world’s top destinations for millionaire migration.
However, the outbreak of war in 2023 has dramatically altered Israel’s status as a magnet for the wealthy. In a stunning reversal, Israel flipped from a net inflow of 1,100 millionaires in 2022 to a net outflow of approximately 200 millionaires in 2023. 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 achievements. The conflict with Hamas is undermining the country’s international standing, stability, and security. Domestically, controversial judicial reforms pushed through prior to the war were seen as weakening democracy and ignited massive street protests, raising the specter of civil unrest.
On top of that, Israel’s increasing international isolation is causing concern, especially among its wealthy residents who have business and other interests outside the country. As the conflict persists, some countries are cutting off diplomatic ties with Israel, potentially making travel on an Israeli passport increasingly challenging and even dangerous. Israelis’ global mobility and connectivity are hanging in the balance.
Faced with growing instability and uncertainty, a growing number of Israeli millionaires are exploring investment migration as a means to mitigate risk and secure alternative residence options. Henley & Partners reported a staggering 232% surge in investment migration inquiries from Israelis in 2023, highlighting the urgency with which many are seeking a Plan B.
Residence by investment programs in countries such as Portugal, Spain, Greece, and Canada have emerged as popular choices, allowing wealthy individuals to obtain residence rights through real estate or other qualifying investments. Others are opting for additional citizenships in Austria, Malta, and various Caribbean countries, among others, gaining the security of a second passport through significant economic contributions.
Israel’s experience serves as a poignant reminder of how quickly a country’s status as a wealth nexus can unravel in the face of mounting risks. Political instability, eroding democratic norms, social unrest, and persistent conflicts can rapidly undo a nation’s hard-earned reputation as an attractive destination for the world’s wealthy and talented.
For countries seeking to attract and retain millionaires, Israel’s story underscores the paramount importance of ensuring long-term stability and security. While favorable tax policies and business opportunities are crucial, they must be underpinned by a steadfast commitment to upholding the rule of law, fostering social cohesion, and mitigating geopolitical risks.
As the world watches Israel’s struggle to balance its economic aspirations with the harsh realities of conflict, it serves as a reminder that even the most promising wealth hubs can falter when the foundations of stability and security are shaken. In an era of increasing global uncertainty, the ability to adapt, mitigate risk, and provide a safe haven for investors will be the defining characteristics of successful millionaire magnets.
Despite the recent net millionaire outflow, it’s important to note that wealthy individuals are not abandoning Israel en masse. Many are still choosing to make Israel their home, drawn by factors that extend beyond mere economic considerations.
As the world’s only majority Jewish state, Israel holds a unique position as a haven for Jewish people globally. The rise of anti-Semitism worldwide continues to drive Jewish families to seek refuge in Israel. Additionally, the country’s generous tax incentives, including a 10-year tax holiday on foreign earnings for new immigrants and the absence of estate duties, remain compelling draws for the wealthy.
Henley & Partners assists international clients in obtaining residence and citizenship under the respective programs. Contact us to arrange an initial private consultation.
