Entrepreneurial Exodus: A Growing Trend
Nearly 6,000 owners of high-growth businesses have left the UK over the past two years, driven by changes to the UK’s tax regime and increasing concerns about economic competitiveness. Research from wealth manager Rathbones, analyzing Companies House filings between January 2024 and 2026, reveals a significant shift in where UK entrepreneurs choose to base themselves.
Tax Changes Fuel the Flight
Sweeping tax changes are at the heart of this trend. These include new inheritance tax rules for business owners, increased capital gains tax rates, and the abolition of the non-dom status. The abolition of non-dom status, effective April 2025, replaced the previous system with a residence-based regime, meaning long-term UK residents are now taxed on their worldwide income and gains.
Where Are They Going?
The United Arab Emirates has emerged as the most attractive destination for departing entrepreneurs, followed by Spain and the US. Notable individuals who have relocated include Goldman Sachs vice president Richard Gnodde and Nassef Sawiris, co-owner of Aston Villa.
Young Founders Leading the Way
Michelle White, head of private offices at Rathbones, highlighted that it’s particularly younger business owners driving this relocation. They are seeking better opportunities, more favorable tax environments, and increased optimism about long-term growth prospects. This suggests a potential long-term impact on the UK’s innovation ecosystem.
Net Outflow and Wealth Migration
The UK experienced a net exodus of 2,758 business owners over the last two years, with 3,182 arriving and 6,000 departing. The country saw a net outflow of 16,500 millionaires last year, representing $91.8bn (£68.1bn) in investable wealth. These figures underscore a broader trend of wealth and talent leaving the UK.
The Importance of Competitiveness
Industry figures emphasize a lack of focus on entrepreneurs compared to other countries, where regulatory clarity fosters substantial business growth. The trend highlights the critical need for the UK economy, tax system, and talent pathways to remain internationally competitive.
Future Trends and Implications
The current outflow of entrepreneurs is likely to continue if the UK doesn’t address the concerns driving this trend. We can anticipate:
- Increased competition for talent: Countries offering more favorable conditions will become magnets for skilled entrepreneurs and innovators.
- Slower economic growth: The loss of entrepreneurial drive and investment could hinder the UK’s economic growth potential.
- Shifting investment patterns: Investment may flow towards jurisdictions with more attractive tax and regulatory environments.
- Policy adjustments: Pressure will mount on policymakers to review and revise tax policies to retain and attract entrepreneurs.
FAQ: Frequently Asked Questions
- What is driving entrepreneurs to leave the UK? Changes to the UK’s tax regime, including inheritance tax and capital gains tax, alongside concerns about economic competitiveness.
- Where are entrepreneurs primarily relocating to? The United Arab Emirates, Spain, and the US are the most popular destinations.
- What impact will this have on the UK economy? A potential slowdown in economic growth and a loss of investment and innovation.
