A new report forecasts a significant exodus of South Korea's wealthy this year, with a projected 2,400 high-net-worth individuals (HNWIs) leaving the country. This trend, largely attributed to the nation's high inheritance tax, positions South Korea as the world's fourth-largest net outflow country for HNWIs, raising concerns about potential economic weakening.
According to a June report by the global investment migration firm Henley & Partners, South Korea is expected to see a net outflow of 2,400 individuals with liquid investable assets of $1 million or more in 2025. This figure is more than double the previous year's and places South Korea behind only the United Kingdom (-16,500), China (-7,800), and India (-3,500) in the global ranking of HNWI net outflows. The report links this acceleration to economic and political instability.
Henley & Partners, which compiles its data annually with New World Wealth, identifies key drivers of wealth migration as tax regimes, political risk, and quality of life. Conversely, the United Arab Emirates (+9,800) and the United States (+7,500) are noted as the top destinations for wealthy immigrants.
Experts argue that South Korea’s high inheritance tax rate is a primary catalyst for this 'wealth exit.' US financial firm Equities First suggests that the elevated inheritance tax is "likely to prompt wealthy South Koreans to emigrate and transfer assets." Professor Lee Young-hwan of Keimyung University stated in his research that South Korea's tax policy fosters a structure that leads to the "outflow of capital and high-quality human resources." He emphasizes that tax policy should transition from a mere revenue-collection tool to a "strategic instrument for securing production factors to maintain growth potential."
The South Korean phenomenon echoes similar historical cases in other nations. The UK, once a net HNWI inflow country, is projected to record the largest-ever annual wealth migration this year, with 16,500 HNWIs expected to leave, largely due to recent reforms aimed at phasing out non-domiciled status tax benefits and tightening inheritance tax. Similarly, France experienced a 'millionaire exodus' earlier this decade, peaking with 12,000 departures in 2016, following the imposition of a wealth tax (ISF) and a temporary super-tax of 75% on incomes over €1 million. French media and the OECD later criticized the wealth tax for generating minimal revenue while spurring capital flight and discouraging investment. French President Emmanuel Macron repealed the ISF upon taking office in 2017, leading to a significant reduction in the annual HNWI outflow, which is now estimated at approximately 800 for 2025. South Korea's current predicament highlights a need for a strategic reconsideration of its tax structure to retain wealth and human capital.
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