By Shannon Tellis, ET Bureau – Last Updated: Sep 25, 2023 04:20 PM IST
Post-pandemic, many countries have launched new residency and citizenship programmes through investment, while others have relaxed their conditions, opening up a whole new world to HNIs (high-networth individuals).
When it comes to migrating, Indians lead the pack with a 32 million-strong diaspora. Industry experts say that enhanced global mobility, smoother business and tax planning are the key drivers propelling the move overseas.
Expanding Network
“Numerous citizenship by investment (CBI) programmes grant visa-free or visa-on-arrival access to a wide array of countries, including prominent business hubs and travel destinations like Hong Kong, China, the UK and Europe. This newfound freedom of movement holds exceptional value for businesspersons, investors, and frequent travellers, facilitating the expansion of personal and professional networks,” says Veronica Cotdemiey, CEO of Citizenship Invest, a Dubai-based citizenship advisory firm.
“Post Covid, many countries launched residency and citizenship programmes through investment and others with existing programmes relaxed conditions surrounding residency/settlement,” says Satyendra Shrivastava, senior partner, Consortia Legal. The investment amount for the US’ EB-5 visa programme, for example, dropped from $900,000 to $800,000.
According to Henley & Partners, an international residence and citizenship advisory firm, there are only a limited number of countries that offer citizenship programmes that provide a direct route to citizenship based on investment. These include Austria, Antigua and Barbuda, Dominica, Egypt, Grenada, Jordan, Malta, North Macedonia, St Kitts and Nevis, St Lucia and Turkiye.
Other countries offer a route to citizenship following a reasonable period of residence, such as Australia, Canada, Greece, Portugal, Singapore, the UK and the USA.
The American dream
In 2021, out of 163,000 Indians who renounced their citizenship, 23,533 applied for an Australian citizenship, 21,597 made Canada their home nation and 14,637 chose the UK. Italy (5,986), New Zealand (2,643), Singapore (2,516), Germany (2,381), the Netherlands (2,187), Sweden (1,841) and Spain (1,595) also saw an inflow of Indians. (The breakup of data for 2022 is not available.)
But what was interesting was that nearly half (or 78,284 Indians) chose a US citizenship. Why the US, inparticular?
Aside from the education opportunities, Abhinav Lohia, MD, Global Business Development at Golden Gate Global, an EB-5 investment fund, credits the increase in demand to H-1B backlogs. “Apart from being the fastest way to get a green card, the new laws allow EB-5 applicants who are based in the United States to apply for adjustment of status. This means they can move from a student visa or a work visa (H-1B) directly to an EB-5 visa without leaving the United States,” says Lohia, adding that a lot of children from HNI families have availed of this option.
It’s also a good choice for entrepreneurs, he says, as they get to cut out the middleman. “They don’t have to pay commissions or hire professionals in the United States if they can manage their business on their own. An EB-5 is also useful if you’re trying to attract capital from Silicon Valley as they prefer the company to be owned by a US citizen.”
Lohia reveals that demand has gone up from less than 100 applications filed out of India in 2014 to 1,000 applications in 2019.
Tax smart
Tax planning is another pivotal consideration for most HNIs when pursuing a second passport or alternate citizenship. “Different countries feature varying tax regimes, offering HNIs the prospect of reducing their tax liabilities by establishing tax residency in nations with favourable tax laws,” shares Cotdemiey.
To do this, however, people need to physically relocate and spend at least six months in that country to become a tax resident. “The UAE is the obvious one because there’s no income tax,” says Dominic Volek, group head of private clients at Henley & Partners. “If you’re an Indian HNI who might have built a business over 10-15 years and potentially you want to exit that business or you have some sort of liquidity event coming up, you might start planning 3-5 years before and move to Dubai or some other tax-efficient jurisdiction so that when that ‘liquidity event’ happens, you are much more efficient from a tax-planning perspective.”
While the UAE Golden Visa programme only offers a residence visa, HNIs who invest in property in the UAE can be nominated for citizenship by UAE royals or officials. Their candidacy must then be approved by the Cabinet.
( With inputs from Glynda Alves)
Global Indian is the second in a series of articles exploring the unparalleled access and wealth of advantages accruing from those citizenships that open doors to the world.
