Why wealthy Indians are investing in expat schemes

Reserve Bank of India (RBI) data show that remittances under the Liberalized Remittance Scheme (LRS) in fiscal year 2020-21 (fiscal year) increased from just $1.3 billion in 2015 to $12.7 billion became. Around 10% of all outbound remittances were global savings accounts, international equities, debt instruments and real estate investments.

Wealthy families in India are starting to look to the right of residence or citizenship by investment (RCBI) option as an investment asset, according to experts.

“These programs are also called alternative residency offerings. Basically, you are creating choices for these families.For example, what if your next generation wants to pursue a more global lifestyle? What if the home currency depreciates significantly and loses global purchasing power over time?” says Shilpa Menon.

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These investments are aimed at achieving the family’s lifestyle goals, including children’s education and career prospects, access to better healthcare, security, asset protection and global mobility.

Investment-based immigration programs are specific long-stay or visa programs in place in many countries such as the United States, United Arab Emirates, and Portugal. This allows individuals and families to obtain a green card or long-stay visa with certain conditions of investment in pre-approved, qualified commercial enterprises that not only bring foreign capital to these countries, but also create local jobs. You can apply. Investments are typically national real estate or government-approved funds, ranging from $175,000 to $800,000, depending on program type and country.

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For example, obtaining permanent residency in Europe provides benefits such as return on investment (RoI), wealth diversification through foreign investment, and obtaining a residence permit. “It’s a win-win for both sides because people applying for programs like this can get a green card/visa for places like the US. You can immigrate to the country of your family without difficulty or difficulties with visas with restrictions, prerequisites, etc.,” said Nishant Agarwal, Senior Managing Partner Advisory at ASK Private Wealth.

Until a few years ago, India’s investment migration market was primarily oriented towards the US EB-5 program.

The EB-5 program (investments to create jobs in the U.S. economy and to obtain U.S. green cards) has historically been dominated by Chinese applicants, but is now moving in favor of Indians. It is changing rapidly. Data show that India overtook China to become the largest her EB-5 investment market in both 2019 and 2020. Her EB-5 applicants in India accounted for 26% of her EB-5 applicants worldwide in 2019.

More recently, European immigration programs with investments for Malta, Portugal, Greece and other European golden visas have also gained momentum. There are several Caribbean countries that offer citizenship directly through investment programs, including Antigua and Barbuda, Dominica and Grenada. However, these programs are not popular among Indians as they require you to give up your Indian passport. Experts say dual citizenship is not allowed in India, so most of the domiciled Indian families opt for residency investment programs.

There is also little demand for programs by some non-EU countries, such as Montenegro, which is negotiating accession to the Eurozone. The idea behind these programs is that they are currently not in the EU, so they are cheaper and offer better incentives for investors.

“The main advantage of the European residency program that attracts investors is the ability to live, work and study anywhere in the EU. Maybe not,” said Menon.

Nirbhay Handa, Head of Business Development Group at Henley & Partners, a citizenship and residency planning firm, said: wealthy indians. Less than 10% of the families we work with across the subcontinent actually use visas to travel abroad, and if they do, this is mainly offered in places like the US, Australia and Canada. I will focus on programs that

Recent government data reveals that more than 160,000 Indians will renounce their citizenship in 2021. Handa, however, clarified that this was due to naturalization and not investment migration. “As the Government of India has declared, more than 99% of his passport abandonments are to citizens of the country where he has lived for years, as they may have moved early on for work or education. It’s the result of naturalization,” said Handa.

Not only for the rich in India, some entrepreneurs are looking for structured residency investment programs in Portugal and Malta, as well as setting up businesses in countries such as the UAE and talent-based visas offered by Australia and Singapore. Some are keen on multiple residences offered through.

“Another trend we are seeing is international financial centers such as London, Dubai, Hong Kong and Singapore, which have a large number of professional NRIs. Maybe, but if I am unable to obtain permanent residency or citizenship, I would like to have another option and would consider alternative residency and citizenship through investment.

Experts say investment programs are unique to individuals. Even if an investment is made through a family office, it is made through a specific person and all benefits of residency accrue to that individual in that name where the investment was made.

Since India is a capital-controlled economy, the free flow of capital out of India is not allowed for Indians. This is governed under LRS regulations, which currently allow individuals to transfer $250,000 annually for global investments. For some families living, working and earning outside India, there may be a large pre-existing offshore portfolio where a Global Family Office could be set up in the same manner as the Indian facilities. , with a similar purpose,” said Agarwal.

Separately, experts noted the impact of the war between Ukraine and Russia on investment-based immigration programs.

For example, the UK canceled its Tier I investor visa program earlier this year over concerns it could enable fraud and illegal fundraising.

“Covid and the Ukraine war have had a huge impact on processing schedules. Immigration has been overwhelmed. While programs such as USEB-5 are subject to a very high level of funding and investor scrutiny, some European programs have been criticized for being less demanding. Going forward, European programs may begin to gradually increase investor scrutiny and related paperwork,” Menon said.

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