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Category Archives: Indian Regulatory Updates

July 12, 2021

Until 2003, immigration consultants and agents were not regulated in Canada. The Canadian immigration department invited a group of immigration agents and consultants to form a self-regulated organization. Most of the leading agents and consultants in this group were former immigration officers. Only a few of them were lawyers.

To judge their English language proficiency, aspiring immigration consultants were required to take the IELTS examination. A six-month training course, followed by a short examination, was also introduced for these consultants. With this process in place, new immigration consultants were granted a license all over Canada.

However, within a couple of years, the initially formed immigration consultants’ association was dissolved and a new association was formed. https://iccrc-crcic.ca/

As per several Canadian media outlets, the presently operational immigration consultants’ association has failed to rein in widespread immigration fraud in Canada, which was the main objective of forming this regulatory organization. There is a possibility that a new licensing body may be launched by the Government of Canada to regulate immigration consultants practicing Canadian immigration and visa law.

If we look closely at the membership list of licensed Canadian agents and consultants, very few of them are former immigration officers. There are also very few members with a legal background having a sound understanding of Canadian immigration law.

After undertaking to take a short six-month study program and examination, anyone can become a licensed Canadian immigration consultant. This is likely to make most immigration consultants average advisors and not experts in every area of immigration law. Hence one needs to be very careful while choosing the right immigration consultant.

Similar is the case in Australia (https://www.mara.gov.au/) and New Zealand (https://www.iaa.govt.nz/) for licensed immigration consultants and agents.

These licensed consultants who have obtained licenses from Canada, Australia or New Zealand operate offices in India or appoint unregulated agents and practice immigration law in India.

This is in violation of the Indian Advocate Act 1961.

As per this Act and the Supreme Court of India’s judgment, only licensed Indian lawyers and advocates can practice law, including foreign law and immigration and visa law, in India.

Presumably, not being aware of this law, the Australia and New Zealand Immigration Consultants’ Associations have issued licenses to Indian citizens (who are not Indian lawyers) to practice their respective country’s immigration and visa law in India, thereby violating the Indian Advocate Act 1961. They are also in contempt of the Supreme Court of India.

This Indian Advocates Act 1961 and the Supreme Court of India’s 2018 judgment, makes one point very clear – that all Indian immigration consultants, who have not licensed lawyers or advocates in India, and who dispense legal advice on immigration and visa matters (visitor visa, student visa, work permit, permanent or business immigration) of any country to the Indian citizens in India are violating the Indian law.

In the event one is defrauded or cheated by an immigration agent or consultant, the person can file a complaint to their respective regulatory authority against the said consultant/agent. One important aspect to consider is whether the fraud was committed in India or in a foreign country and whether any legal action can be taken against the said immigration consultant/agent.

In such a scenario, the only option available to Indian citizens is filing a police complaint, which may not be very effective and may not give desired results.

So before you hire a licensed immigration consultant/agent, be extremely careful. Check their backgrounds thoroughly and obtain references from them before entrusting your hard-earned money and hopes to them.

Read the Supreme Court of India’s judgment here  | Read RBI Notification here

June 3, 2021

The Reserve Bank of India (RBI) confirmed on May 31 that banks and other regulated entities cannot cite its 2018 circular on cryptocurrencies because it was set aside by the Supreme Court (SC) in March 2020. The RBI stated that the circular is no longer effective as of the date of the SC ruling and that it cannot be referred to or quoted from.

This clarification follows a series of previous investor communications from banks like HDFC and SBI, which highlighted a 2018 circular to warn investors about the “uncertain regulatory landscape” in this industry. Investors were urged to understand the nature of these transactions and to be mindful of the hazards connected with crypto and virtual currencies.

The circular does, however, include a cautionary warning about banks performing due diligence in cryptocurrency concerns. Banks were told to maintain complying with KYC (Know-Your-Customer) and AML (Anti-Money Laundering) requirements, among other things.

“We welcome the move from the RBI to clarify the stand around the old circular which was set aside by the honorable Supreme Court. I hope the confusion around the same ends now. We also respect the concern the banks may have around AML (anti-money laundering) policies and discussions around the same will make the industry stronger, and investors and investments safer.” said Sumit Gupta, CEO, and Co-founder, Coin DCX.

Due diligence, on the other hand, is a legal requirement that all financial institutions must fulfill. All of this leads to a bright future for the booming crypto business, which has been hampered by ambiguous government policies and laws.

Despite the country’s ambiguous cryptocurrency landscape, Indians have invested more than $1 billion in the cryptocurrency market, making India one of the top virtual currency trading countries.

Experts believe there is now a chance for substantial industry-government collaboration on crypto-related policies. “This is very positive for the ecosystem and it feels like overall consensus within the government and regulatory bodies are against stifling innovation and growth in the Crypto ecosystem in India,” Sandeep Naliwal, Co-Founder and Chief Operations Officer at Polygon, an Indian blockchain scalability platform, said.

When Mark Cuban of Shark Tank fame invested in Polygon, the company skyrocketed in popularity. Polygon’s native token, Matic, has risen in value from $26 million upon its start in 2019 to moreover $14 billion in recent months.

RBI’s statement to banks on cryptocurrency investments clears their position on whether customers are legally allowed to invest in crypto. Instead of denying service to their customers based on an invalidated circular, it is time banks came on board the crypto investment bandwagon, allow the crypto exchanges to hold accounts with them, and enable customers to make investments via all possible options, including UPI and bank transfers. Cryptocurrencies are the future and we must ensure we stay at the forefront of this technology”, emphasizes Ashish Singhal, CEO, Coinswitch Kuber.

With RBI’s consent and clearance on the trading of cryptocurrency and an increasing number of businesses and individuals embracing cryptocurrencies and the underlying blockchain applications, formal regulation of the sphere is no longer a pipe dream. As the government strives for increased financial inclusion and engagement, it is critical that a suitable environment be created to make this possible.

This article is contributed by Ms. Dishita Sheth, Intern at Ajmera Law Group

March 23, 2021

Indian Supreme Court Prohibits Practice Of Law By Foreign Lawyers/Law Firms In India

(This judgment has a direct effect on foreign immigration lawyers, immigration consulting firm, and  real estate developers who wish to attract Indian HNI for residency and/or citizenship of respective country) 

The Hon’ble Supreme Court of India recently passed a crucial verdict that foreign lawyers/firms are not entitled to practice law in India either on the litigation or non-litigation side unless they fulfill the requirement of the Advocates Act, 1961, and the Bar Council of India Rules.

This was very high-profile case and global law firms, associations and many foreign entities were involved in this case which went on for 4 years.

This judgment has a far-reaching effect on the immigration industry and in particular Residency and Citizenship by investment practice in India.

As per the judgment foreign law firms/companies or foreign lawyers do not have an absolute right to practice law in India and they will be governed by the code of conduct applicable to the legal profession in India.

One of the arguments made was that lawyers means who are arguing cases before court, but the Supreme court made it clear that practicing of law includes not only appearance in courts but also giving of opinion, drafting of instruments, participation in conferences involving legal discussion. This regulatory mechanism of India for the conduct of advocates applies to non-litigation work also.

The Advocates Act of India 1961 and the Scheme in Chapter-IV of the Act makes it clear that advocates enrolled with the Bar Council of India “alone” are entitled to “practice law”, except as otherwise provided in any other law.

This means if any person or company or entity in India if is involved in the practice of giving advice of law whether foreign or local law are not entitled to do the same unless they are having license to practice as a lawyer in India and regulated by the Bar Council of India.

In my opinion, immigration agents and consultants in India who are not licensed and regulated and if they are giving legal advice of foreign immigration law are in violation of the Advocates Act of India.

Further observation and clarification made by the supreme court are more crucial.

  • First observation made by the court was, the prohibition not only applicable to any “person in India”, other than advocate enrolled under the Advocates Act, but certainly applies to any “foreigner” also.

 

  • Visit of any foreign lawyer on fly in and fly out basis may amount to practice of law if it is on regular basis. A casual visit for giving advice may not be covered by the expression ‘practice’. This means if the foreign lawyer is visiting in India on a regular basis to give advice to clients in India is likely to be in violation of the Act and subject to prosecution.

 

  • The third and final remarks made by court say all “If in pith and substance the amount of the service to practice of law, the provisions of the Advocates Act will apply and foreign law firms or foreign lawyers will not be allowed to do so.”

In view of the above, not only foreign lawyers but Indian or foreign immigration firm and companies,  registering as a company India and establishing the presence in India and if giving and advise on foreign or Indian law inducing immigration law are also in violation of the Advocates Act of India and subject to prosecution.

Based on this judgment, central bank of India including, the Reserve Bank of India (RBI) also came out with a special notification

Establishment of Branch Office (BO) / Liaison Office (LO) / Project Office (PO)
or any other place of business in India by foreign law firms” which provided as follows.

  • No fresh permissions/ renewal of permission shall be granted by the Reserve Bank/ Indian banks to any foreign law firm for the opening of the Liaison Office in India.

 

  • The Hon’ble Supreme Court has while disposing of the case, held that advocates enrolled under the Advocates Act, 1961 “alone” are entitled to practice law in India and that foreign law firms/companies or foreign lawyers cannot practice the profession of law in India.

As such, foreign law firms/companies or foreign lawyers or any other person resident outside India, are not permitted to establish any branch office, project office, liaison office or another place of business in India for the purpose of practicing the legal profession.

 

In view this all Banks in India are directed not to grant any approval to any branch office, project office, liaison office or other place of business in India under FEMA for the purpose of practicing legal profession in India.

  • Further, the Indian bank shall bring to the notice of the Reserve Bank in case any such violation of the provisions of the Advocates Act comes to their notice.

The action by the central bank of India is also the first time I have seen and it has a far-reaching effect on residency and citizenship by investment practice in India.

July 22, 2019

Since independence in 1947, the Indian economic era can be divided into three main periods:

  1. 1947 to 1993
  2. 1993 to 2007
  3. 2007 to the present day.

The first period is most accurately described as pre-liberalized – a time when pre-liberalisation of the economic policies was taking place in India.

We may regard the second period as the start of economic liberalization– this is the time when inbound investments in India began in earnest.

The third period, in which we currently find ourselves, is the period of optimum economic liberalization – a time when inbound and outbound investments to and from India are in full swing.

The wave of economic liberalization seen in the past few years has catalyzed growth in the number of HNWIs in India. Wealth generation is at its peak, lifestyles, standards of living, travel, education, weddings, savings, retirement, and many other important aspects of life have changed drastically since 2007.

One metric by which we can measure this is the change in India’s HNWI population during the period:

As the above figures from the Knight Frank Wealth Report indicate, the number of HNWIs in India is growing exponentially. Financial advisors, RCBI-professionals, and others who deal with HNWI clients need to adapt and get with the times.

Before the year 2007, most Indians were aspiring just to own a home. But now, they not only want a house with four walls but are looking for a fully furnished, luxurious home. Some years ago, a two-wheeler Bajaj, Fiat, or Ambassador car was the pride of a family. Now, owning two to three cars and a holiday home or farmhouse outside the city is very common.

This is how I would compare the financial aspirations of an Indian businessperson a decade ago and at present:

Before 2007: 

  • Own a two-wheeler or a car
  • Have a portfolio of investments (in India)
  • Go on holidays (in India)
  • Give their children an education in India and perhaps a Master’s degree in a foreign university
  • Own a second home (in India)
  • Get married (in India)
  • Engage in inbound business (in India)

After 2007:

  • Own a luxurious home
  • Own two cars
  • Have a portfolio of investments abroad
  • Go on international holidays
  • Give their children an education abroad, starting from the graduation of high school in India
  • Own a second home abroad
  • Get married, abroad
  • Engage in outbound business, globally

Today, many HNWIs and upper-middle-class Indians own a second home outside India, their children are studying in foreign universities, and they spend at least one vacation abroad each year, all thanks to the booming economy and the concomitant increased spending power.

Foreign destination weddings are catching on and now the new generation of power couples want to have grand, elaborate weddings in exotic locales. In their golden years, senior citizens dream of retiring outside India or living in foreign countries with their children so as to enjoy a better quality of life.

According to data received from the Reserve Bank of India, over the last six years shows the volume of remittances sent abroad by individual Indians has increased ten-fold.

This is not some haphazard newspaper survey; again, these foreign investment figures come directly from the country’s central bank, which closely monitors capital flows to and from India. It provides unique insight into how Indian HNWIs are spending their money. The overall figure for outbound investment has increased from US$440 million US in 2007-08 to US$13.5 billion in 2017-18. In the last six years alone, we’ve witnessed a ten-fold rise in the spending power of Indian HNWIs.

Note also that a large part of the items “Gifts” and “Maintenance of close relatives” is made up of remittances by parents to their children who are studying abroad, while their tuition payments are covered in “Studies Abroad”.

Looking at the data, it’s apparent that RCBI is quickly becoming part of affluent Indians’ considerations in their foreign investment strategy.  The chance to market investment migration services to more than a billion people is a twice-in-a-lifetime opportunity. The first of those opportunities has already passed us by. Don’t miss out on the second chance, for there will never, ever, be a third.

January 5, 2018

 

Further liberalization of remittance of investment from India to foreign countries for Immigration purposes; including USA EB-5 investor visa:

Over a period of time, the Foreign Exchange Reserve in India has increased India’s foreign exchange (Forex) reserve to $377.751 billion US, the gold reserve to $20.691 billion, SDRs (Special Drawing Rights with the IMF) to $ 1.512 billion and IMF reserves to $2.291 billion totaling US$ 402.246 billion as of September 22, 2017, as per Forex.

As per one survey, the government of India is aims to have a foreign reserve of $ 750 Billion dollars.

In view of the continued rise of the foreign reserve , RBI ( Central Bank of India) has further liberalized the remittance of foreign currency from India to abroad.

Following are the latest proposals included under the Liberalized Remittance Scheme (LRS). 
Individual Indian citizens can avail of foreign exchange facilities for the following purposes, granted that they remain within the LRS limit of USD $250,000 on a financial year basis.

  1. Private visits to any country (except Nepal and Bhutan)
  2. Gift or donation
  3. Going abroad for employment
  4. Emigration
  5. Maintenance of close relatives abroad
  6. Travel for business, or attending a conference or specialized training
  7. Meeting medical expenses, or check-ups abroad, or for accompanying as attendant to a patient going abroad for medical treatment/ check-up
  8. Studies abroad
  9. Any other current account transaction is not covered under the definition of the current account in FEMA 1999.

This limit is US$ 250,000 per year per person, therefore a family of 4 can remit a million dollars in each financial year which is from April 1 to March 31 of the following year.
It is important to note that the Government of India has allowed the remittance of the fund for Immigration purposes, which opens the gate in India for all types of Residency and Citizenship programs around the world.

This will also allow the Indian citizen to make an investment in foreign business, real estate or unlisted securities and at the same time obtain residency and citizenship by investment.