South Korea, the World’s 4th-Largest Source of Wealth Flight, Sees 2,400 Millionaires Relocate Abroad

This year, 142,000 millionaires around the world moved across borders. It is the highest level on record. In South Korea, 2,400 left. That ranks 4th after the United Kingdom (16,500), China (7,800), and India (3,500). By contrast, the top destinations for the wealthy are the UAE (9,800), the United States (7,500), and Italy (3,600).

What these numbers show is clear. South Korea has become a country the wealthy want to leave, while the UAE and the United States have become countries the wealthy want to move to.

While the UAE attracted 9,800 millionaires, South Korea lost 2,400. With the extraordinary conditions of a 0% personal income tax and a 0% inheritance tax, the UAE is drawing in wealth from around the world. In the middle of the desert, it has created a global financial hub.

Another interesting development is the dramatic turnaround of Southern European countries such as Italy, Greece, and Portugal. These countries, which once struggled through fiscal crises, are now actively attracting the wealthy through flat-tax systems on foreign income and are writing a new growth narrative. They have turned crisis into opportunity.

What, then, is the reality in South Korea? It boasts the OECD’s second-highest inheritance tax burden at 50%, yet ignores the impact this has on growth potential. Even while watching the heads of global companies such as Samsung and Hyundai Motor struggle to raise trillions of won to pay inheritance taxes instead of focusing on corporate management, the country continues to package it all under the name of “fairness.”

Most of the 2,400 people who left South Korea are entrepreneurs, investors, and highly skilled professionals. When they leave, investment capital declines, and new business opportunities disappear with them. As a result, the growth potential of the economy as a whole is weakened.

The markets where wealth has grown the fastest in the world share one common feature: they are all countries that have actively leveraged the inflow of the wealthy. The outflow of the wealthy is, in effect, a leading indicator of declining economic vitality.

While countries around the world are attracting wealth and talent to create new engines of growth, South Korea remains internally consumed by “distributional justice.” In other words, it is focusing only on dividing the pie rather than growing it. As a result, it is overlooking the fact that the pie itself is shrinking.

The fact that the United Kingdom took the global top spot with an outflow of 16,500 millionaires reflects the same dynamic. The mass exodus of wealth began when it abolished the special tax regime for non-domiciled residents that it had maintained for 200 years. As a result, London’s prime real estate market is plunging, and its status as a financial hub is also being shaken.

Growth is the fundamental solution to all social problems. In a growing economy, jobs increase, wages rise, and tax revenue also grows naturally. In that process, all classes benefit. By contrast, in an economy where growth has stalled, only a zero-sum game remains.

South Korea must now make a choice. Will it continue to remain trapped in the logic of redistribution and stand by as its growth engines drain away, or will it join the world in embracing a new growth paradigm?

In the face of the historic shift represented by the movement of 142,000 wealthy people worldwide, there is only one path South Korea should choose. It must adjust its excessive inheritance tax rate in a growth-friendly direction and sweep away the various regulations that suppress entrepreneurship. It must create an environment in which foreign investors want to start new businesses in South Korea. Above all, it needs a shift in thinking—one that sees attracting wealthy people from other countries to South Korea not as a “special favor,” but as an “investment in growth.”

Hea-lim Park, Senior Research Fellow, Center for Free Enterprise (CFE)

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Original title: 세계 4위 '부자 유출국', 대한민국 백만장자 2400명 국경 이동

Author: Hea-lim Park

Date: 2025-09-24

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&idx=28121