What is Residency and Citizenship by investment?
Residency and Citizenship by investment is a program and Rules of many countries which allows successful businessmen, HNI and Start Up to obtain residency or citizenship (Passport ) of that new country. This is wildly used tool and process by HNI in all developed and developing countries.
Why invest Aboard?
For Indian and Asia businessman living in an emerging market making investment abroad can be for variety of reasons. If goal is to make investment in foreign stock market and get better return on investment you my make investment online by opening an account with one of the premium bank and you are done.
However if the goal is not just financial return but many other reasons that one need to look at country of choice and their investment rules very closely.
We like to discuss some major reasons for investing abroad and why one should consider investing abroad.
By this investment you are likely to receive residency and/or citizenship of other country.
Following are the major reason for investing abroad with Residency and Citizenship benefits.
Investing abroad for:-
- Children’s education:
Several surveys show that Asian parents give top priority to their children’s education and are particularly keen that they study abroad. This is probably due to the fact that the approach and attitude towards education in Western countries is very different compared to that in Asian countries. The number of Indian students studying abroad has increased many-fold in past 5 years. In the year 2010, more than 400,000 Indian students were studying in different countries around the world. HNIs and Upper Middle Class (UMC) of India can plan their children’s study in foreign countries by making investments in risk-free but unconventional products in many countries of the world. There are excellent opportunities available for investing in countries like USA, Canada, UK and the Caribbean islands which guarantee subsidized education for children of these investors.
More over these investment is likely to give residency status to family and your child and hence your child will have jump start in his career when he will finish his education. During summer months your child would be working for a proper job of his liking rather than working unrelated manual minimum wage job. On campus recruitment your child will not be discriminated because he is a foreign student.
If your child is not looking for a job or he is one of those teen age entrepreneur, his residency status will give him jump star and no obstruction in starting his own business.
One of my client who has brilliant business idea and received VC funding in India and USA is now asking his guardians to make investment for him to receive USA residency so he can start his business without any problem.
My another Pakistani client send his son for higher study in Canada and within one year of study he realized that best option for him was to receive residency by investing in a Canadian government bond for whole family.
- Quality of life:
HNIs and UMC in India now have sizable assets and disposable income. Hence foreign travel and pleasure trips abroad have become a frequent occurrence. After having travelled abroad. They aspire to achieve the quality of life lived by people in developed countries. For this they can invest and live abroad, although they continue to maintain their business operations and family ties in India. The new liberalized foreign exchange policy allows many HNIs and UMC to purchase their own real estate in countries they wish to live in or visit frequently.
Expansion of business:
Even though India is an economic powerhouse and Western countries are keen to develop trading ties with India, many Indian businessmen face hindrance in travelling abroad for business or pleasure.
These businessmen can now expand their business in USA, Canada, Australia, U.K. and many other countries around the world through investment and ensure easy visa-free travel to several countries around the world. These businessmen can easily travel in and out of India to their preferred destinations for business expansion, collaborations, forming alliances or for pleasure. Many HNIs and UMC will be taking advantage of the new foreign remittance policy to make investments in businesses abroad thus diversifying their business or bringing in new technology to India or by making an investment in African countries, export Indian technology to these countries. This is a win-win situation for Indian businessmen who wish to establish a global presence.
- NRI status and benefits:
Investing in foreign countries can also facilitate in obtaining NRI status and avail of tax exempted benefits associated with NRI status. As we already know, many Indian celebrities, politicians and sports personalities have obtained residencies of different jurisdictions around the world in the past for tax planning purposes. Today, this investment opportunity is easily accessible to Indian HNIs and the UMC who can obtain NRI status and receive its benefits. This is also beneficial to the Indian economy as this generates more NRIs who in turn reinvest back in India, remit foreign currency to India and also may bring new business ideas and opportunities.
In past it was professionals and students who made NRI and each one has story to tell how he become NTI, now it is Indian businessman turns to invest abroad become NRI and come back and share their story with us.
- Visa free Travel around the world:
Exporters, businessman or investors from India and Asian region can obtain residency of certain countries which does not require physical stay but provide foreign passport and visa free travel to more than 130 countries.
Reunion with family living abroad:
Due to strict visa regime of many countries many family members are left alone in India. By making investment abroad or relative abroad can make investment for relative in India and ask them to join in foreign country.
- Retiring abroad:
Many HNI and family can take advantage of retiring abroad by making investment out side and thus having best of both world as per season and need in each country.
- Tax planning
Investing abroad can give you best situation for tax planning by taking advantage of NRI status, making investment through legitimate international trust and DATT signed by India with many countries around the world.
- Wealth Management & Portfolio diversification:
Stock market data of 2011-17 showed that whatever is happening to USA and UK economy, at the end of the year both stock market did much batter then Indian and Chinese stock market. Therefore investing abroad in developed country could be a best option for wealth management and portfolio diversification for savvy investor and HNI who wish to explore world stock market.
- Political Reason:
In today’s world having unrest occurring in all parts of the world, having a second passport is least you can do for safety of your family.