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December 24, 2020
December 24, 2020

How and Why should Indian HNIs Invest in the USA?

Author By Ajmera Law Group Categories Global Financial Markets, USA

Insightful tips for parents wanting to send their children to study in the U.S. | obtain USA green card and eventual citizenship 

Introduction:

The economic policy of India has been progressive since 1993 for inbound investment, and from 2007 onwards for outbound investment and remittance. As for outbound investment, the first wave of investment was by Indian multinationals who had the financial means and resources to invest outside of India.

The introduction of the Liberalized Remittance Scheme (LRS) generated opportunity and facilitated the entry of Indian SMEs into the outbound investment arena. This was the second wave of investors.

What we are witnessing in recent times is the third wave of investors comprising of Indian HNIs and UNHIs who are investing outside of India. As per the Reserve Bank of India (RBI), this investment/remittance amount was $19 billion US last year alone.

It is obvious that Indian multinationals are well served by top Indian and global professionals due to the size of the deal and investment made.

However, when it comes to Indian SMEs, Start-Ups and HNIs, professional help may not always be forthcoming and if available, may not be erudite. Investing outside of one’s country requires in-depth knowledge not only of the laws, rules and regulations governing such investments, but also the economic and financial climate of the destination of the investment and the various investment opportunities this destination has to offer.

It is with this objective that we are starting this monthly “How and Why to invest in ….” series, wherein we will be taking a closer look at the different investment destinations around the world.

We start this month with one of the most favored investment destinations for Indians – The United States of America.

  1. Why do Indian HNIs regard the USA as a favoured investment destination?

ANS:  USA is unquestionably the largest economy in the world. The U.S. has retained its position of being the world’s largest economy since 1871. The size of the U.S. economy was at $20.58 trillion in 2018 in nominal terms and is expected to reach $22.32 trillion in 2020.

The U.S. is often dubbed as an economic superpower and that’s because the economy constitutes almost a quarter of the global economy, backed by advanced infrastructure, technology, and an abundance of natural resources.

The second reason why the U.S. is an economic powerhouse is because a majority of consumer brands created in the USA are household names globally. This makes people to look at the USA more favourably than other countries. The notion of the “American Dream’ and “Rags to Riches” stories of many of its wealthy citizens is also a great crowd puller.

The third most important aspect is the American education system. American universities and colleges attract the largest number of students from all over the world. As an after-effect, many parents of these students and business persons follow their children to make investments in the USA.

I believe this is what makes the USA a very desirable and favourable destination for Indian HNI parents and businesspersons for investment purposes as compared to other countries.

  1. In what type of asset classes can one invest in the USA?

ANS: USA is a free economy and one can make investment in all types of asset classes and businesses as long as it does not constitute an illegal activity. One question I am often asked is if Indians can purchase agricultural land in the USA. The simple answer is, “YES”. Foreigners can certainly purchase agricultural land in the USA.

 

One important note: When investing in the USA, one needs to consider the Indian legal perspective too; the types of assets Indian citizens are allowed to invest in, as well as the U.S. laws governing these investments.

 

For example, if an Indian citizen decides to invest in a U.S. Green Card under the EB-5 category, he/she needs to follow Indian laws regarding remittance of money and the U.S. immigration laws which govern this type of investment.

 For ease of understanding, we can broadly divide investments in the USA in four different categories:

  • Financial markets and related products
  • Real estate – All types
  • Business and Start-up
  • Second passport
  1. What are the applicable laws for Indian citizens who wish to invest in U.S. financial markets?

ANS: The RBI is responsible for regulating the outbound investment/remittance of funds by Indian citizens. The provision is made in the Foreign Exchange Management Act (FEMA) and regulations are made therein. There are two available options:

  • Indian businesses having a company or partnership firm can invest up to 400% of the net assets of the Indian company for making an investment outside of India in a Joint Venture company (JV) or a Wholly Owned Subsidiary (WOS) without RBI permission under the automatic route. However, there are many terms and conditions attached and one must look closely at this provision, or better still, seek appropriate legal counsel.
  • An Indian citizen can remit/invest up to $250,000 US in a variety of assets outside of India under the LRS scheme. The permissible capital account transactions by an individual under the LRS are:
  1. Opening of foreign currency account abroad with a bank
  2. Purchase of property abroad
  3. Making investments abroad – acquisition and holding shares of both listed and unlisted overseas company or debt instruments
  4. Acquisition of qualification shares of an overseas company for holding the post of Director
  5. Acquisition of shares of a foreign company towards professional services rendered or in lieu of Director’s remuneration
  6. Investment in units of Mutual Funds
  7. Venture Capital Funds
  8. Unrated debt securities
  9. Promissory notes
  10. Setting up Wholly Owned Subsidiaries and Joint Ventures
  11. How can one invest in U.S. financial markets?

ANS: There are a number of ways by which Indian citizens can make an investment in U.S. financial markets. Let me explain in brief:

  • An Indian financial institute is providing some products to make an investment in the USA. Preferred for investments of $200,000 US and above.
  • One may approach a U.S. licensed broker or financial advisor or portfolio manager and make an investment. Preferred for investments of $100,000 US and above.
  • There are now online platforms (FinTech start-up) and American sub-brokers who have started arriving in the Indian market. They can assist in making investments in the USA with several facilities. Preferred for investors with smaller ticket size of $1000 US and above.
  • There are platforms available where one can make Systematic Investment Plan (SIP) investment in global products with ticket size of only $200 US (similar to the Indian mutual fund market).
  • There are also multi–stock market platforms available which can offer access to 50+ stock markets around the world from a single account. Suitable for ticket size of $500 US and above. However, the investor needs to perform his/her own transaction. A demo version is available to get acquainted with the platform. This is suitable for savvy investors who wish to save on brokerage. It is also recommended for Indian stock exchange brokers who can have a white label of this platform and offer their clients access to more than 50 stock markets globally right here in India.
  1. How is the U.S. financial market likely to fare post COVID-19?

ANS: As the COVID-19 outbreak gripped the entire world in March 2020, stock market prices plunged globally. Then, in a move that seemed irrational to some observers, the markets bounced back.

As per a leading economist, “Markets decline when there’s unexpectedly bad news and rise when there’s unexpectedly good news”.

Nevertheless, when we analyze the market sector wise, we see that certain sectors such as hospitality and travel are not doing very well and their stock prices are going down. On the other hand, tech companies are doing very well.

The dominance of major U.S. Tech Stocks in recent years has pushed the sector past another milestone as it is now valued at more than $9.1 trillion US, which is more than the entire European stock market, according to Bank of America global research.

In today’s complex economy, this once again confirms the view that stock markets are not the best indicators of a country’s economy. Therefore when it comes to investing in stock markets, one should look closely at individual sectors, individual companies and the factors that affect stock prices, rather than just looking at the overall market performance and indices.

  1. What is FATCA and how is it applicable to investments made in the USA?

ANS:  The Foreign Account Tax Compliance Act (FATCA) is part of a broad initiative by the United States to combat offshore tax evasion by U.S. taxpayers. The goal of the law is not to increase revenues for the U.S. Treasury, but rather to collect information on U.S. taxpayers that invest in foreign financial institutions and foreign entities.

FATCA requires a U.S. withholding agent (generally defined as any U.S. party that is making a payment of interest, dividends, certain capital gains, etc.) to withhold 30% of a payment made to certain foreign entities.

Thus FATCA is more of a reporting requirement of the U.S. government. Thus if you invest in the USA, you will be required to file tax returns. When you sell your assets, there may be a withholding tax which may be claimed back by declaring a U.S. non-resident tax status or adjust against tax liability in India.

 What are the opportunities for Indian stockbrokers in the USA?

ANS: There is a tremendous opportunity for Indian stock brokers in the USA and other financial markets of the world. Unfortunately, the Indian financial industry focuses on only one aspect of the economy, which is inbound investment.

Due to advances in technology, it is now possible to access not one but several stock markets of the world right from the comfort of your home or office with just a click. With some effort and will, it is easy to enter into these markets.

Just imagine – more than $19 billion US were remitted/invested by Indians outside of India with negligible advisory services from the Indian financial market and professionals.

If professionals associated with or working for the Indian financial markets take due interest and understand the importance of overriding the political and currency risk by investing in more than one country and in more than one currency, I have no doubt that this market can grow many folds.

I am more than confident that in a few years Indian investors will consider foreign investment as a mandatory part of their investment portfolio.

Indian stock brokers will benefit greatly by expanding their worldview and urging their clients to invest in markets outside of India. Proper understanding and knowledge of how this can be done is the need of the hour.

  1. How is the U.S. real estate market at present?

ANS: Just like the financial market, the U.S. real estate market is the backbone of the U.S. economy.

After six years of strong house price growth, the U.S. housing market is cooling. The S&P/Case-Shiller seasonally-adjusted national home price index rose by just 3.13% during the year to Q2 2019 (1.46% inflation-adjusted) – the lowest growth since Q3 2012. House prices increased 2.29% during the latest quarter (1.52% inflation-adjusted), according to S&P/Case-Shiller.

Despite this, 19 of the 20 major U.S. cities continued to experience moderate to minimal house price hikes, according to Standard and Poor’s.

The post COVID period has created some very good opportunities for repossessed properties.

At the same time, one must note that the USA is a country that attracts one of the largest foreign investment into real estate in the world. Foreign investment in U.S. real estate was almost $74 billion US in 2019. The three most popular states for foreign real estate investment in the USA are – New York and Florida on the east coast and California on the west coast.

 How can one invest in U.S. real estate?

ANS: The RBI allows Indian citizens to make investments in foreign real estate. One can directly contact a real estate agent or developer in the USA and make an investment. There are many real estate agents and developers who come to India regularly to solicit investment in their projects.

The U.S. real estate market is highly regulated when it comes to selling and buying real estate but one still needs to be careful and seek professional help. One more important point that investors must note is that in the residential sector, only licensed real estate agents can assist in buying and selling real estate in the USA.

Abundant data is available on the internet pertaining to the U.S. real estate market. It is therefore very easy to obtain a lot of information online regarding the property under consideration.

  1. How can one decide which real estate to invest in?

ANS: USA is a very big market. Hence investors need to do their homework well. Deciding which state and city to invest in, how much to invest and personal preferences (house, condo, row house, downtown, suburbs) is generally influenced by the presence of family and friends in the USA.

A budget of $300,000 US can allow an investor to buy real estate in many states of the USA and it is a good starting point.

  1. Is it possible to obtain a mortgage for investing in real estate in the USA?

ANS: Yes, it is possible to obtain a mortgage for purchasing real estate in the USA from selected brokers who specialize in mortgages for foreign investors.

  1. How can one establish a business in the USA?

ANS: When it comes to establishing a business in the USA, there are two aspects to consider:

  • Do you want your company to have a presence in the U.S. and hire local workforce?

In this case, a company, with only one director, can be registered in any state in the USA within four weeks. One can also obtain all types of tax ids and numbers.

Opening a bank account may require physical presence in the USA. This can allow you to perform business transactions and conduct business with U.S. companies. Understandably, one needs to follow annual company compliance and income tax filing.

  • Do you want your company to have a presence in the U.S. and send workforce from India?

In this case, one needs to consider the U.S. immigration and visa rules. There are five types of visa categories can be covered under such a scenario –

  1. L-1A Visa – The L-1A nonimmigrant classification enables a U.S. employer to transfer an executive or manager from one of its affiliated foreign offices to one of its offices in the United States.
  2. L-1B Visa – The L-1B nonimmigrant classification enables a U.S. employer to transfer a professional employee with specialized knowledge relating to the organization’s interests from one of its affiliated foreign offices to one of its offices in the United States.
  3. EB-1 (c) – Certain managers or executives of multinational companies, who have been employed outside the United States for at least 1 year in the past 3 years preceding the petition can apply under this category. This category is known as ‘Transfer under the Mergers & Acquisitions’.
  4. E-2 Visa – The E-2 nonimmigrant classification allows a national of ‘Treaty Countries’ (Canada, Grenada, Turkey, and such other 60+ countries) to be admitted to the United States when investing a substantial amount of capital in a U.S. business.
  5. EB-5 Visa – The standard minimum investment amount has increased to $1.8 million US (from $1 million US) and, for the Targeted Employment Area (TEA), it has increased to $900,000 US (from $500,000 US) to account for inflation. The business also needs to create 10 jobs for Americans.

Each of these categories is very complex and needs extensive documentation, business plan and, in many cases, an elaborate explanation of the source of funds. Professional help and guidance is highly recommended and desirable when applying under any of these categories to ensure best results.

  1. One last question. Many of our members want their children to study in the USA. How can they plan for their children’s education the USA?

ANS: In general, when Indian students go to the U.S. for studies, they apply for a U.S. Green Card under one of the three following visa classes – EB1, EB2 and EB3.

There is a quota of 40,000 Green Cards per year in each category, with a total of 120,000 Green Cards to be issued.

When this quota was introduced, there were a limited number of foreign students applying for a U.S. Green Card. However, in recent times more and more foreign students are coming to study in the USA from all over the world and are applying for a U.S. Green Card after completing their studies. Thus the number of petitions have increased but the quota has remained the same since the last thirty years.

Due to an unprecedented increase in this number, the waiting time for a Green Card in October 2020 is almost 12 years. If one counts the period of study and H1 work visa period, the total period is almost 20 years to obtain a U.S. Green Card.

Indian students, and parents who wish that their children settle in the USA, need new strategies and proper planning if this dream has to come to fruition.

They must bear in mind the following points:

  1. Plan early and look in to the possibility of Residency by Investment. If that is not possible or feasible, look into the possibility of saving money for your child’s foreign education by investing outside India in financial markets or real estate to avoid currency fluctuation risk and the rising cost of foreign study.
  2. Parents and students must also realize that doing a Post Graduate Diploma (PGD..) in the U.S. is not equivalent to obtaining a Master’s degree.
  3. It is always preferable to study in a recognized university and not a college or private institute.
  4. In 2020, parents and students must not assume that studying abroad will guarantee job placement and future immigration.
September 13, 2020
September 13, 2020

HOW AND WHY SHOULD INDIAN HNIs INVEST GLOBALLY?

Author By Ajmera Law Group Categories Global Financial Markets, Global Investing How & why?, Headlines
  1. What is a global investment?

Global or international investing means investing in different global investment instruments so that one’s financial portfolio becomes geographically diversified. This international investment not only diversifies the portfolio but also helps to spread the investment risk among various foreign markets and companies thereby ensuring the security and long term safety of the investment.

  1. What is Indian government’s policy on investing globally?

As per the Reserve Bank of India (RBI), Indian government has opened up doors for investing and remitting abroad as it believes that joint ventures abroad promote economic co-operation between India and the host countries. Since globalization of trade is a two-way process, integration of the Indian economy with the rest of the world with all its attendant benefits is achieved through overseas investment. It is the reverse of Foreign Direct Investment (FDI) and can be termed as Indian Direct Investment abroad.

Thanks to a liberalized economic policy from 1992 onwards and huge foreign investments by Foreign Institutional Investors (FIIs) and Non Resident Indians (NRIs), India’s foreign exchange reserve now stands at several billion dollars.

This huge fund has permitted the Reserve Bank of India to implement a much liberalized foreign exchange policy. In 2004, RBI allowed an Indian citizen to invest $25,000 US abroad. Over the years, this amount has been increasing steadily and as of today, $250,000 US per year per individual can be remitted/invested outside of India. This scheme is popularly known as Liberalized Remittance Scheme or LRS.

Indian HNIs can certainly benefit from this policy changes. Unfortunately, due to lack of knowledge and awareness regarding investing globally, a negligible number of Indian investors have taken advantage of the LRS.

  1. What are the types of assets that Indian HNIs can invest in outside of India?

In general, Indian citizenscan invest in equity shares, debt instruments, foreign portfolio, real estate, life insurance premium (except term insurance) including opening of foreign account abroad for investment. The payment can also be remitted to close relative(s) as a gift or for purpose of family maintenance. Detailed information is available on official RBI website.

  1. Since the start of LRS, how much fund has been remitted/invested by Indian HNIs abroad?

According to the RBI, the Indian remittance has increased from $72 million US in 2007-08 to $19 billion US in 2019-20. In just over a decade, we are witnessing a huge change in the spending power and spending pattern of Indian HNIs.

  1. If Indian investors have remitted/invested $19 billion US in the last year, do you think Indian HNIs are savvy enough when it comes to foreign investments?

Economic liberalization, economic boom and the aforementioned LRS has resulted in the remittance of more than $19 billion US outside of India last year alone.

However, when we examine this data more closely, we find that a major portion of this remittance by Indian HNIs is expenditure and a very small portion of the money has been actually invested. Here is the RBI data for Indian outbound remittance in 2019-20 (in million US$)

  • (i) Deposits – 623.37
  • (ii) Purchase of immovable property – 86.43
  • (iii) Debt/equity – 431.41
  • (iv) Gift – 1904.53
  • (v) Donations – 22.32
  • (vi) Travel – 6954.20
  • (vii) Maintenance of close relatives – 3437.46
  • Medical expenses –33.88
  • (ix) Studies abroad – 4989.04
  • (x) Others –268.74

We can easily infer from the above data that the spending habits of Indian HNIs have seen a significant shift from domestic to international.

However, though Indian HNIs spend a substantial amount of their wealth abroad, their investing and saving habits have not changed and are still largely concentrated in the domestic domain. If this trend does not change, it can eventually result in financial distress for Indian HNIs who continue to spend abroad but do not invest abroad.

  1. Why do you say there could be financial distress for Indian HNIs?

Let’s take a simple example. 5 crore INR was equivalent to 1 million US$ in 2008. However, at the present time, this 5 crore INR is equivalent to 635,000 US$. This is due to the fact that the US dollar has been growing stronger year after year. Its exchange value increased from Rs. 49 in 2008 to Rs. 76 in 2020.

So when Indian HNIs continue to invest in India but spend a substantial amount of their money abroad, they are not getting the full value for their domestic investment, eventually decreasing their net worth and spending power. If the same amount is invested abroad, then the spending is balanced out because currency is not devalued as you are spending in the same currency.

Let’s take another example of an Indian HNI who invests in stocks and shares in India. He may be earning really well in India but Dollex 30 Chart of the Indian stock market shows that in the last 12 years, investing in shares has not given any substantial return to the Indian investors in terms of the US dollar. So if this HNI wants to go abroad for a vacation, send his children abroad for higher studies or spend on foreign luxury items, the investments he has made in India must give higher returns to balance out the currency risk/fluctuation.

  1. What is the top foreign spend for Indian HNIs?

Careful analysis of the remittance data gives us an insight as to how Indian HNIs are spending their wealth abroad. As can be clearly seen, spending for children’s foreign education is on top of the list for Indian HNIs.

  1. In what type of asset classes can one invest outside of India?

There are primarily four options available. They are:

  1. The first option is investing in foreign stock markets and diversifying your portfolio globally. Due to recent advancements in technology, there are several platforms available whereby Indian investors can invest in stocks, debts and other instruments of more than 50 different stock markets of the world from a single account on any device. However, the lack of knowledge of foreign stock markets makes it difficult for Indian brokers and investors to venture into it.
  2. The second option is an investment in global real estate. Even though Indian investors prefer investing in real estate as compared to other asset classes, this investment in international real estate is limited to countries in the Middle East and Far East such as Thailand. However, there are excellent opportunities available for real estate investment in countries such as USA, Canada, UK, Australia, New Zealand and many European countries.

    In many of these countries, the real estate market is booming so much that the government has restricted foreign investors from making investments in real estate or implemented additional welcome tax for foreign investors. In some countries, it is the buyer who has to pay all the transaction expenses and brokerage.

3. The third option is expansion of business. Not only big corporations and multi-nationals, now even Indian SMEs and exporters can invest out of India and expand their business by establishing their presence in international markets.

4. The fourth option is to invest in a second passport by way of Residency & Citizenship by Investment (RCI) programs. These RCI programs are being offered by more than 30 countries in the world. Investing in a second passport should not be perceived as abandoning your country but be seen as an opportunity to achieve many financial as well as non-financial benefits such as NRI status, visa-free travel, quality of life, expansion of business, portfolio diversification and retirement abroad.

The most important benefit that Indian parents can reap by investing in a second passport is the reduction in their child’s foreign university education fees by almost 80%.

  1. How can investing outside of India be beneficial to Indians, Indian companies and the Indian economy?

The liberalization of the Indian economy began in 1993-94. At that time the object was on attracting foreign investments to India and that policy continues till date. Over the years the strength of the Indian economy grew and the Indian government started focusing on creating bilateral trade between India and the rest of the world. The government wanted to create a bigger customer base for Indian companies and to that end, the Government of India has implemented certain regulations and policies from 2007 onwards to encourage greater outbound investments by Indian companies and individual Indian citizens.

These policies were created by the Indian government with a long term vision to not only encourage Indian multinational companies to make investments outside of India but also strengthen the Indian economy by assisting individuals and Indian SMEs to venture outside their comfort zone and promote India’s interests overseas.

One may ask how Indian HNIs and businesspersons can benefit from all this? The answer is simple. The world is increasingly becoming a global village and investing outside of India is a powerful tool that can be used by Indian HNIs and businesspersons not only for their personal advantage but also to contribute positively to the Indian economy by promoting bilateral trade. More NRI businesspersons mean more bilateral trade and increased remittance of foreign currency and business back into India.

Foreign investment can also be a highly effective and dependable strategy for Indian HNIs to assert their presence in the global business market. India is perhaps one of the last developing economies in the world where venturing outside of the country to conduct business has yet to become a way of doing business. Yes, there are businesspersons who have taken that risk but their percentage is very low as compared to our population and potential.

In 2020, investing abroad can be equated to creating a second option for your family and expanding your business interests. If we look at countries such as China, Taiwan, Vietnam and Korea, the businesspersons and HNIs of these countries have made personal as well as business investments in other countries, thus providing their families and future generations with a second option along with economic growth. It’s high time that Indian businesspersons and HNIs also start thinking in a similar manner.

  1. The Indian real estate and the stock market are booming right now and very soon India is likely to be a favorite destination for foreign companies. In such a scenario, why should Indian HNIs consider investing outside of India?

‘Do not put all eggs in one basket’.This old saying has been proven true time and again especially with reference to national and international economic markets. In most cases, investors have failed to understand this old saying and have lost money heavily by investing it in just one type of market.

Every investor must consider four types of risk to their investments. These are – political risk, interest rate risk, currency exchange rate risk and most importantly, in the case of Indian HNIs, new spending habits.

There is no exact mix one can work out for investing abroad but traditionally, one can take ratio of 70% local market and 30 % foreign market.

 Do not be tempted to put too many eggs in one basket, no matter how attractive and convincing it may seem. As the Indian government now allows investments abroad, it is time that Indian businesspersons look closely at new avenues of investing outside of India and diversifying their portfolios.

A few years back, investing in mutual funds was frowned upon but now we say, ‘Mutual Funds SahiHai!’

Similarly, in the next few years, Indian investors will say,

‘Foreign Investment Zaroori Hai!’

November 6, 2019
November 6, 2019

Planning for Education abroad in 2020: A new perspective

Author By Ajmera Law Group Categories Study Abroad & Planning

Pursuant to the economic liberalisation in India, wealth creation has reached unprecedented heights. From the time of independence onwards, the Indian economic era can be divided into three main periods:

From 1947 to 1993 – Pre-liberalisation of the economic policies in India.

From 1993 to 2007 – Start of economic liberalization, a time when inbound investments began in earnest.

From 2007 to Present – Period of optimum economic liberalization, a time when inbound and outbound investments to and from India were allowed.

This outbound investment and remittance post 2007 has resulted in Indian HNIs traveling abroad more frequently, for work as well as pleasure. Destination weddings in exotic international locations and sending their children out of India for undergraduate and graduate studies is fairly common among HNIs.

According to the RBI, the Indian HNI remittance has increased from US$440 million in 2007-08 to US$13.5 billion in 2017-18. The top spending for HNIs was on their children’s education – around US$4 billion, followed by foreign travel and gifts to the family.

As the data shows, spending on children’s education abroad is on top of the list for Indian HNIs. Today not only HNIs but even middle-class parents aspire to send their children abroad to study.

However, the past migration history of India and the affluence of the Indian diaspora in foreign countries prompts most Indians parents to believe that if their child gets a foreign education, he/she will be able to settle in that country permanently. They equate studying abroad with settling abroad. They feel that once their child goes abroad, they will be able to make a good life for themselves and settle comfortably.

We must not forget that just like India, there are parents in many countries around the world who send their children to study in countries such as the USA, Canada, Australia, UK, and New Zealand.

This has increased the number of foreign students applying for immigration after study in the aforementioned countries. Hence the queue and waiting period for obtaining immigration is getting longer and longer.

Let us take an example of an Indian student studying in the USA. If this student started studying for a Master’s program in the year 2002, he is likely to have completed it by 2004. Like most students, he would have converted his status from an F1 student visa to an H1B work permit visa upon obtaining a job. He would have worked for six consecutive years on this visa, assuming that the company he worked for continued to hire his services. Hence until 2010, he would be working on an H1B visa.

Let us assume that this student applied for a Green Card in 2010 under one for the following categories – EB1, EB2, and EB3 and received approval for his I-140 petition. As each of these categories has a quota of 40,000 Green Cards per year, and as the number of foreign students applying for a Green Card in these categories is very high, it takes several years to receive this much-coveted card.

As per the USA Government official website, petitions received/ approved until January 2015 are being issued a Green Card under the EB1 category. Petitions approved/received until July 2009 are being issued a Green Card under the EB2 and EB3 categories. Hence as of today, our student has to wait for at least another 4 years for a Green Card under the EB1 category and another 10 years under the EB2 and EB3 categories, assuming that rules do not change and processing time remains more or less the same.

Due to this unprecedented delay, there are many Indian students in the USA who are still waiting to get a Green Card even after 12-15 years of completing their studies. When wealthy Indian parents of such candidates realize that their children cannot obtain residency after the study program, they try to intervene by investing money on behalf of their children in programs such as the EB-5 Investor visa of the USA to secure a Green Card.

Other popular destinations for study abroad are Canada, Australia, New Zealand, and the UK. Thanks to thousands of student visa consultants and agents, these countries have the highest number of Indian international students. Unfortunately, due to the bad advice dispensed by local agents – who are motivated by the hefty commissions they receive from foreign education institutes – a good number of students receive a shock of their life when they realize that the course they have been enrolled into is not a Bachelor’s/Master’s program but an ordinary college diploma or certificate course. Also, the institution they are going to study in is not a recognized university but a local college.

There are innumerable horror stories created by parents and their children themselves because of their desperation to go abroad. This has led to frustration, disappointment, and careers of many bright students being destroyed due to short-sightedness and lack of knowledge.

Most Indian parents, who want their children to study abroad fail to realize that circumstances that existed a few years ago to settle abroad are no longer applicable in 2020. Immigration laws and regulations change from time to time and from country to country.

Unless parents plan early, sending their children abroad to study will only result in spending exorbitant amounts of money without any net gain, which is a permanent settlement in that country.

Though a new concept for Indian HNIs, their counterparts in countries such as China, Taiwan, and Korea have resorted to obtaining residency and citizenship by an investment of various countries around the world to secure their children’s education. This gives their children a jump start in their careers when they finish their education.

The most important advantage of obtaining residency and citizenship by investment is that the investor’s children can enjoy reduced tuition fees at the majority of top universities. Tuition fees for permanent residents and citizens is significantly lower, reduced by almost 60%-80%, in most foreign universities as compared to that paid by international students.

In many cases, the amount to be invested by an investor in a particular country is just a little higher than the tuition fees he/she would pay in international student fees, especially if the investor has two or more children.

This is where financial advisors can help their HNI and Upper Middle Class (UMC) clients to plan early for the foreign education of their children by making investments in risk-free but unconventional products such as Residency & Citizenship by Investment in many countries of the world. There are excellent opportunities available for investing in countries like the USA, Canada, the UK, some European countries and the Caribbean islands which guarantee subsidized education for children of investors.

Depending on the country this investment can in real estate, business, government bond, a donation to government, government-approved project and mix of these assets class.

For HNIs, their financial advisor is like a close family member. They expect to get not only sound financial advice regarding how to make more money by investing wisely but also knowledge regarding the latest products and services available in the market that can help them in achieving their long term and short term goals such as their child’s education and future, quality of life and expansion of business. Other factors of consideration would be NRI status, tax planning and diversification of the portfolio, investment in international real estate, etc.

July 22, 2019
July 22, 2019

Indian Outbound Investment Up 10x in Six Years – The Opportunity for RCBI-Firms is Unmistakeable

Author By Ajmera Law Group Categories Indian Regulatory Updates, USA, World

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.

July 12, 2019
July 12, 2019

Why Residency and Citizenship by Investment should be an integral part of any Indian financial advisor’s check list?

Author By Ajmera Law Group Categories Global Professional Opportunities

From the time of independence, the Indian economic era can be divided into three main periods:

(1) 1947 to 1993

(2) 1993 to 2007

(3) 2007 to present day.

The first period can be described as pre-liberalized – a time when pre-liberalisation of the economic policieswas taking place in India.

The second period can be regarded as the start of economic liberalization– a time when inbound investments began in earnest in India.

The third period can be described as optimum economic liberalization – a time when inbound and outbound investments to and from India are in full swing.

The wave of economic liberalization seen the past few years has increased the number of HNIs in India and wealth generation is at its peak. Life styles, standard of living, travel, education, weddings, savings, retirement and many other important aspects of life have changed post 2007.

Have a look at the following figures:

2007 – HNIs in India 152 ,000

2015 – HNIs in India 236,000

2018 – HNIs in India 430,000

2023 – HNIs in India 860,000

As can be seen from the above figures, the number of HNIs in India has been increasing exponentially. Hence financial advisors and related professionals need to change their approach according to the need of the times.

I consider that before the year 2007, most Indians were aspiring to just 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 farm house outside the city is very common.

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

Before 2007:

  • 2 Wheeler or 1 car
  • Investment – India
  • Holiday – In India
  • Children’s education – India and perhaps Master’s degree in foreign university
  • 2nd Home – India
  • Wedding – Local or Indian destination
  • Business – National & inbound

After 2007:

  • Home + Luxuries
  • Two four wheelers
  • Investment – International
  • Holiday – International
  • Children’s education – After 12th/high school in foreign universities
  • 2nd Home – International
  • Wedding – Internationaldestination
  • Business – Global & outbound

Today, many HNIs and UMCs (Upper middle class) own a second home outside India, their children are studying in foreign universities and they spend at least one vacation abroad per year, thanks to the booming economy and increased spending power.

Foreign destination weddingsare catching on and now the new generation 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 to as to enjoy better quality of life.

According to the data received from RBI for the year 2017- 18, under the LRS Indian HNIs spent more than $11. 33 billion US outside of India.

The expenditure is sub-divided as follows:

 Investment in 2017-18

  • Deposits –      414.9
  • Property –  89.6
  • Debt / equity – 441.8
  • Gift – 1169.7
  • Donations – 8.5
  • Travel – 4022.1
  • Close Relative – 2939.4
  • Medical – 27.5
  • Study – 2021.4
  • Others – 200.6

This is not a random survey; these foreign investments are backed by data received from the Reserve Bank of India.

This is howthe Indian HNIs are spending their money. The figures have increased from $440 million US in 2007-08 to $13.5 billion in 2017-18. In just a decade, we are witnessing a huge change in the spending power of Indian HNIs.

So how can financial advisors in India ignore this trend? How they not advise Indian HNIsregarding the benefits of investing abroad and obtaining residency and citizenship by investment?

For HNIs, their financial advisor is like a close family member. They expect to get not only sound financial advice regarding how to make more money by investing wisely but also knowledge regarding the latest products and servicesavailable in the market that can help them in achieving their long term and short term goals such as their child’s education and future, quality of life and expansion of business. Other factors could be of consideration would be NRI status, tax planning and diversification of portfolio, investment in international real estate, etc.

Hence it is imperative that financial advisors and related professionals dispense the right advice in keeping with the changing trends in global investment. They need to include foreign investment and investing for a second passport or residency of a foreign country as part of their financial advisory to ensure that their clients are able to ensure theirs and their children’s future before it’s too late.

May 11, 2019
May 11, 2019

The #1 Mistake You’re Making When Marketing Investment Migration Programs in India

Author By Ajmera Law Group Categories Residency & Citizenship by Investment and Indian market

An Indian immigration attorney with more than 20 years of experience points to a common mistake investment migration firms make when courting Indian clients, and explains what to do instead.

Since the Indian government recently opened the doors that allow Indian investors to go out and invest abroad, many Indian businessmen are now exploring international avenues for expanding and securing their financial future.

Residency and citizenship by investment (RCBI) is one lucrative option that offers Indian HNWIs (High Net Worth Individuals) a multi-faceted solution for their long- and short term goals. Not only can such programs ensure the safety and security of their investment, but also allows the HNWIs to obtain residency/citizenship of another country.

India is perhaps the last economic powerhouse in the world whose HNWIs have yet to take full advantage of the opportunities and options available to invest abroad and truly become global citizens.

The graph below demonstrates the untapped potential of the Indian market. Despite having nearly half a million HNWIs (according to Knight Frank), Indians show up on the radar of only a handful of residence program destinations.

This is because most Indians still hold the perception that investing abroad is for the purpose of wealth generation only. They’re thinking goes: If we can easily generate wealth in India, then why invest abroad? However, it is important for them to know that investing abroad can help to achieve not only financial but other personal and professional goals as well.

Over the past few years, curiosity about RCBI programs has grown sharply in India, but there is a lack of professional advice regarding the various benefits of these programs, especially the non-financial ones.

But investment migration firms are making one crucial mistake:

Selling their projects before selling their countries

Service providers who wish to establish a presence in India need to attune themselves to the Indian mindset. It is not enough to promote their program aggressively in the Indian market. It is important that they also sell their respective countries and educate their clients about the non-monetary returns offered by these programs. In short, they don’t have to just sell their product but also sell their country and its uniqueness.

Service providers coming to India to market their product must keep in mind the following facts:

  • For starters, it is important to remember that Indian businesspeople are not, inherently, risk takers. They always prioritize the security of their investment and substantial returns in any kind of investment.
  • Second, there is the ‘trust’ issue. Indians will not invest until trust is established with a service provider. Businesses in India mostly operate through references and mutual acquaintances. They are more comfortable when business has to be given or taken from someone who is known, even vaguely.
  • Most service providers who come to India are only focused on selling their product/service. For example, they will explain everything about the investment program and its pros and cons. Indians, however, are savvy investors and are not only looking for financial gains (though that may be their primary motivation) but other non-financial matters as well, such as –
  • Is the place welcoming and business friendly?
  • Is there a well-established Indian community there?
  • Is it going to benefit the family, especially the children?
  • Can the children obtain a good education and have bright career prospects there?
  • Can they settle there and still maintain their personal and professional ties to India?

Service providers should focus on the following motivating factors when dealing with Indian clients:

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 the past five years. Members of India’s upper- and upper middle class can plan their children’s study in foreign countries by making investments in nearly risk-free but unconventional products in many countries. There are excellent opportunities available for investing in countries like the US, Canada, the UK, and the Caribbean islands that guarantee subsidized education for the children of these investors.

In most countries offering RCBI schemes, permanent residency or citizenship status is accorded to the investor and his/her family. As such, the investor’s children can have a head start in their career when they finish their education.

The most important advantage that service providers can stress is that, by obtaining residency and citizenship by investment, the investor’s children can enjoy reduced tuition fees at most universities and colleges. Tuition fees for permanent residents and citizens are significantly lower in most foreign universities as compared to those paid by international students. In many cases, the amount to be invested by an investor in a particular country is just a little higher than the tuition fees that have to be paid, especially if the investor has two or more children.

In other words, the investor can often recover the capital invested in citizenship or residency through the savings garnered from paying in-state – rather than international – tuition fees.

Quality of life: 

Members of Indias upper- and upper middle classes now have considerable assets and disposable income, a relatively recent phenomenon. Hence, foreign travel and pleasure trips abroad have become a frequent occurrence. Having traveled abroad, these individuals have new-found aspirations to achieve the quality of life enjoyed by their peers in developed countries.

This is another attraction that service providers can leverage; tempting investors by showcasing the quality of life and high standard of living in their countries. They need to assure investors that not only will they enjoy high-quality living, but also continue to maintain their business operations and family ties in India. The newly liberalized foreign exchange policies allow well-heeled Indians to purchase real estate in countries in which they wish to live or to which they want to travel frequently.

Expansion of business, tax planning and wealth management:

Even though India is an economic powerhouse with which Western countries are keen to develop trading ties, many Indian businessmen are still hesitant to venture outside domestic markets to expand their business.

The Indian government has opened up doors for investing abroad since it believes that joint ventures (JVs) promote economic co-operation between India and other countries. Since the globalization of trade is a two-way process, integration of the Indian economy with the rest of the world – with all its attendant benefits – is achieved through overseas investment. It is the reverse of Foreign Direct Investment (FDI); Indians directing investment abroad.

Thanks to this new liberalized vision of the Indian government, subcontinental entrepreneurs can now expand their business to the US, Canada, Australia, the UK, and many other countries through RCBI. Many HNWIs will be taking advantage of the new foreign remittance policy to make investments in businesses abroad and diversifying their business or bringing in new technology to India. Service providers can explain how this can be a win-win situation for Indian businessmen who wish to establish a global presence.

Indian exporters, in particular, have been quite reticent or unforthcoming in investing through RCBI. Service providers can accentuate the benefits of RCBI to Indian exporters by expounding on how exporters from China, Taiwan, Korea, and even Pakistan have used these programs to their advantage.

Individual exporters and export companies in these countries have realized that having a presence in the importer’s country is the most efficient and effective way to sell their goods. Through these programs, they obtain permanent residency/citizenship of the respective country. This then allows them to conduct business in their adopted country as local businessmen. Additionally, the confidence level of the buyers/importers is greater when doing business with a local exporter rather than with an exclusively India-based exporter with whom they’ve never interacted.

Visa-free travel:

Indian businesspeople face hindrances when traveling in and out of India to their preferred destinations for business or pleasure due to visa restrictions. Obtaining the necessary visas is a time-consuming process in India, and the number of countries to which they can travel visa-free is very limited. Additionally, the fear of visa application rejection always looms.

Quite often, these businessmen and women have to cancel their trips because of visa application rejections or delays. Visa-free and hassle-free travel ensures mobility and networking opportunities. Investment through RCBI can help investors obtain passports or resident permits of countries whose residents and citizens enjoy the freedom of visa-free travel to many countries around the world.

Non Resident Indian (NRI) status and benefits: 

Investing in foreign countries can also facilitate the acquisition of Non-Resident Indian (NRI) status and the tax exempted benefits associated with it. As we already know, many Indian celebrities, politicians, and sports personalities have obtained residencies of different jurisdictions around the world for tax planning purposes.

In fact, as NRIs, individuals can invest abroad as well as in India. This makes tax planning easier because it enables the creation of legitimate international trusts. The Double Taxation Avoidance Agreements (DATTs) signed between India and many countries around the world help NRIs with estate planning and the reduction of personal and corporate taxes.

Investing in developed and developing economies could be a good option for savvy investors and HNWIs when it comes to wealth management and portfolio diversification. Investments can be made in stocks, real estate, mutual funds, and government bonds. These can come with financial and/or non-financial rewards.

In conclusion, because India is a new market for RCBI, foreign developers and service providers should not merely copy the marketing strategy that worked for them in other countries, but rather tailor their approach to local tastes. The first step, in that respect, is to primarily market the destination rather than the program.

Investment Migration
April 15, 2019
April 15, 2019

10 Reasons Indian HNWIs Have Been Slow to Embrace Investment Migration

Author By Ajmera Law Group Categories Residency & Citizenship by Investment and Indian market

On the surface, India’s market for investment migration has the same fundamental conditions as China; a population of some 1.3 billion, a passport with limited mobility, a large number of HNWIs, and plenty of push factors like pollution, restrictions on individual liberty, and lack of educational opportunities. But look closer, and you’ll find that India has many more obstacles – mainly cultural – that have prevented the investment migration market from flourishing to the same degree that it has in China.

We’ll look at each of these limiting factors in turn but, first, some background.

Read also: Basic Dos and Don’ts for Entering the Indian Investment Migration Market – By Prashant Ajmera

A brief history of Indian emigration

Migration from India to other countries around the world started in earnest more than 100 years ago. Back then, the migrants were mostly laborers recruited to work on sugar plantations in the Caribbean islands and Mauritius, railroads in Canada, and as industrial and domestic workers in South Africa, Malaysia, and Indonesia. During this period, only people with meager means thought of migrating abroad in order to sustain their families.

After India’s independence from British rule in 1947, however, this labor migration decreased dramatically. The post-independence period saw Indians leaving the country for a very different reason; that of obtaining higher education and, thereafter, settling abroad. During this period, foreign migration became a symbol of social status, and obtaining a foreign education and living abroad become aspirations that most Indians nurtured but which very few of them could afford.

The most favored destinations were the USA and the UK. Qualified Indians pursued higher studies in these countries and then settled into lucrative jobs. Doctors, engineers, and architects from India settled in these countries during this time.

In the mid-seventies, the Gulf countries – notably the UAE, Oman, and Kuwait – were growing exponentially thanks to petrodollars. Need for advanced infrastructure development, high-tech facilities and world-class standards of living generated demand for a huge labor force; qualified professionals as well as labourers.

This unprecedented growth prompted a second wave of workforce migration from India to the Middle Eastern countries. Presently the Indian diaspora is the most populous expat community in the Middle East.

This era was fraught with recruitment scams and fraudsters cheating ignorant workers with false promises of a highly paid job and a better life in exchange for huge amounts of money. Because of this, in the year 1983, the Indian government passed the Emigration Act to regulate agents recruiting manpower from India mainly to Middle Eastern countries.

In 1993, Canada introduced skilled migration. It was a highly streamlined process, paving the way for systematic skilled worker migration from India to Canada. Eventually, Australia, New Zealand, and some European countries also joined the fray.

During the late 80s and all throughout the 90s, the growing IT industries and start-ups in Western countries and the Y2K problem attracted a large pool of IT professionals from India.

These professionals, who received mediocre salaries in India, were highly paid by foreign companies. Good money, cushy jobs and a high standard of living eventually prompted them to settle down with their families in these countries. This was a period of ‘brain-drain’ for India.

All this migration created a very deep stigma in the upper echelons of Indian society who began to regard migration as something undertaken by economically deprived people only. According to them, migration was for people with lesser means so that they could earn more abroad.

Interestingly, many of these wealthy people who looked down on migration had themselves migrated from villages to cities within India in search of wealth and a better life during their youth.

This gives us a brief background as to how migration evolved in India. Though we are at the threshold of the year 2020, Indian HNWIs are quite slow in making a decision to immigrate abroad. Residency and citizenship by investment is a concept that still hasn’t struck a chord with many Indians.

The 10 main reasons Indian HNWIs have been slow to embrace residence and citizenship by investment

1.The mind-set that immigration is only for the economically deprived

As mentioned, not only HNWIs but a majority of Indians harbor a deeply rooted belief that immigration is only for the economically deprived. In my 27 years of practice, I have come across a great number of people who come to consult me and start the conversation with these lines: “We are very well-to-do and not interested in moving abroad. But I am doing this (immigrating) for the sake of my children’s education and future”.

Most of these people are senior executives of multinationals, owners of SMEs, or wealthy businesspersons. They enjoy a high standard of living and their net worth is in the millions of dollars.

2. Stable democracy and good standard of living

India became independent in 1947, but today it is the world’s largest democracy. Though home to several religions, languages, and classes of people, it is a relatively safe country in which to live. The law and order situation is reasonably good and, though there may be unrest in a few pockets across the nation from time to time, there is peace and safety most of the time.

Additionally, the Indian economy is getting stronger by the day. These factors discourage many Indian HNWIs from moving abroad unlike their counterparts in countries such as China and Russia.

3. Lack of Knowledge among HNWI advisors

In the past three or four years, we have seen a growing interest among HNWIs in various residency and citizenship programs. Unfortunately, their usual financial advisors like chartered accountants, wealth managers, and lawyers have little-to-no knowledge about any of these programs.

Many HNWIs are even skeptical about the existence and authenticity of these programs and wonder if it’s an international scam. I recently met the senior partner of large and reputed client advisory firm who had no clue about investment migration and was surprised that it can be a highly beneficial investment opportunity for HNWIs.

4. Lack of familiarity with investing abroad

Until recently, Indian banks and concerned government agencies had very strict and conservative rules in place that deterred Indian professionals and businesspersons from remitting money outside of India. Hence, the entire concept of investing abroad is quite novel for most Indian HNWIs. Now, with more favorable regulations, HNWIs are showing a willingness to venture into the unknown RCBI territory.

5. Lack of knowledge about residence and citizenship by investment programs

Lack of basic knowledge about RCBI and its benefits makes HNWIs less trusting of such programs. With no one to assist them and clear their doubts, they are confused regarding the value of investment migration programs as a safe and rewarding investment.

6. Multiple obstacles related to cash transactions and liquidity

With the exception of large metros, most real estate and large financial transactions in India are carried out in a split manner to avoid taxation – around 30-35% of the real estate price is paid through bank transfer whereas 65-70% of the transaction is by cash. This creates a perennial liquidity issue for Indians who often have to struggle to show that they have the necessary financial capacity to invest abroad through official banking channels.

7. Difficulty with documents and other legalities

India does not have a nationwide social security system. Additionally, there is no credit rating system for individuals and corporates. Business is commonly conducted based on personal references. Drawing up detailed agreements and legal documents and hiring professionals to guide through the entire process is still not a common practice.

In contrast, RCBI programs involve a plethora of legal documents and other formalities that can be completed only with the help of qualified and knowledgeable professionals. Many Indian HNWIs are flummoxed when they realize how many supporting documents they need to submit with their application and the other legalities they need to complete. Gathering and compiling relevant documents is an uphill task for most of them.

8. Negative perceptions of investment migration

Indians often assume that if a wealthy person has applied for immigration, he/she must be doing so for all the wrong reasons. In recent times, several UHNWIs have fled the country in order to escape prosecution and possible jail time and taken refuge in foreign jurisdictions through investment migration programs.

The Indian media has exploited these stories extensively to generate negativity about RCBI programs, highlighting how HNWIs are taking undue advantage of these programs to avoid persecution at home and live a comfortable life elsewhere. All this undue attention has made many high profile HNWIs very cautious and secretive when they seek immigration through such schemes.

9. Lack of trust

Non-payment of invoices and private investment is widespread in India. HNWIs, as consequence, generally don’t trust foreign developers and their projects. This lack of trust – combined with the Indian mentality of investing in a foreign project where other Indians, preferably friends or relatives, are involved – has proved to be a great disadvantage for foreign developers and their projects.

There are several examples wherein many Indian-origin investors from the USA have been successful in raising millions of dollars for their debut EB-5 projects whereas some highly reputed EB-5 regional centres are still struggling to establish their presence in India.

10. The Foreign Exchange Management Act (FEMA):

FEMA and the regulations therein make it difficult for Indians to transfer or remit payment outside of India. Violating the law was a criminal offense in bygone years but is now just a civil offense that can result in up to 300% penalty if money is remitted without duly following the law.

The need of the hour is to work hard collectively to educate Indian HNWIs and the professionals serving them about how RCBI programs are not only about immigrating to a foreign country but much more.

Though the Indian market is slow to pick up, it is my firm belief that in the next few years, India will be a significant player in the global investment migration market.

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