Investment Migration Archives

June 1, 2021

New Zealand scrutinises to encourage investment immigration

By Ajmera Law Group Headlines, New Zealand, Residency & Citizenship by Investment, Residency & Citizenship by Investment and Indian market

The New Zealand government has announced the formation of an inquiry commission to examine the country’s working-age immigration policy, including analysing the skilled migrant visa category and making recommendations on how to enhance investment immigration.

Deputy Prime Minister Grant Robertson said, “This inquiry will enable New Zealand to strategically optimise its immigration settings by taking a system-wide view, including the impact of immigration on the labour market, housing and associated infrastructure, and the natural environment.”

The commission’s mandate includes looking into the effects of rising net migration on housing markets, social cohesion, and the global ecosystems, as well as exchange rates and GDP growth. It will also analyse how the country can address potential labour and skill shortages, as well as whether migrants’ skills are aligned with job opportunities in New Zealand.

The inquiry body will emphasise on “how to attract and gain from investor migrants and entrepreneurial migrants whose expertise, experience, resources, and international ties will help New Zealand’s economic and social development, including through the creation of new businesses, and improving New Zealand’s reach into higher-value industries.”

Other questions the commission will address include whether the perceptions that domestic workers’ jobs are being taken over by migrant workers, especially in the low-skilled category, are accurate or not. Student visas as a pathway to permanent residence would also be scrutinised and closely watched.

Before the deadline of April 30, 2022, the Productivity Commission must present its findings.

In a statement, the Productivity Commission’s Ganesh Nana said, “The Commission looks forward to working alongside Maori and Pacific communities, migrant and ethnic communities, relevant government agencies, skills organisations, partners (the New Zealand Council of Trade Unions, Te Kauae Kaimahi and Business New Zealand), and many others.”

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

June 1, 2021

USA clears Path for Foreign Entrepreneurs and Start-ups

By Ajmera Law Group EB-5 US Investor Visa, Green Card, Headlines, Investor Visa, Residency & Citizenship by Investment and Indian market, US start up visa program, USA

By removing the Trump administration proposal that aimed to kill the initiative, the Biden administration wants to resurrect an immigration program that allows foreign entrepreneurs to operate in the United States.

The International Entrepreneur law, which was then proposed by President Barack Obama’s administration three days before he left office in 2017, enables foreign entrepreneurs to work in the United States for up to five years if their start-ups can raise at least $250,000 from the venture capital in the United States, recruit ten employees, or meet other criteria.

As part of its attempts to revive the program, the Biden administration intends to market it. These actions are in response to demands from venture capital firms, which want the administration to support a program that would encourage thousands of foreign start-up founders to relocate to or stay in the United States to expand their ventures.

The Biden Administration is unlocking an enormous job growth opportunity by incorporating the International Entrepreneur Rule, which will help the United States remain the global leader in innovation,” said Bobby Franklin, the group’s president and chief executive.

“Immigrants in the United States have a long history of entrepreneurship, hard work, and creativity, and their contributions to this nation are incredibly valuable,” said Acting U.S. Citizenship and Immigration Services Director Tracy Renaud.

Currently, there is no visa available for start-up founders in the United States, despite the widespread bipartisan support for the concept. Other visa types must be used for foreign entrepreneurs, but none are ideal.

Between 2017 and 2019, USCIS received only 30 applications for the program, with only one being accepted, according to a USCIS official.

According to USCIS, if the program is properly implemented, about 3,000 international entrepreneurs would qualify per year, resulting in the creation of about 100,000 jobs over a ten-year period.

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

May 30, 2021

Ajmera Law Group publishes first edition of Residency and Citizenship by Investment by asset classes!

By Ajmera Law Group Headlines, Residency & Citizenship by Investment

As per some of the global organization world is passing through a time where we see the highest number of voluntary migration of human race.

For the last 50 years or we saw human migration for better education and a future for the family.

However, in the last 15-20 years we saw HNI and UNHI are also voluntarily moving from their home country to other parts of the world. In this respect, Residency and citizenship by investment is the most preferred way for HNI and UHNI to move from one country to another country for varsity of reasons.

Before 2012, we saw only hand full of countries that were offering residency by investment such USA, Canada, the UK, Australia, and New Zealand.

In 2012, we saw for the first time, Portugal golden visa with investment in real estate followed by several European countries such as Spain, Malta, Cyprus, Greece, Bulgaria, Moldova, Turkey, etc. These countries mostly offering residency by investment but many attractive terms and conditions for the investors.

At the same, we saw third group Carrabin countries offering citizenship by investment such as Grenada, St Kitts & Naïves, St. Lucia, Antigua & Barbuda, and Dominica.

In 2013 we saw forth a group of business immigration to attract start-ups and its founder. Canada was the first country to start with and now followed by now more the 20 countries with a Start-Up visa program.

Not only this, many countries are now amending their program to give more options to investors for making an investment in not only one class but different asset classes.

In view of the number of countries giving options for investment with residency and citizenship programs, it was the right time to give a comprehensive view of all countries based on asset classes. Said, Prahsnat Ajmera, lawyer, founder, and author of ALG.

As a law firm, it is our professional duty to present and advise on all investment options to our investors rather than giving limited options of most expensive options.” Added Mr. Ajmera

The firm strongly believes that such publication and comparison will give investors to make well-informed investment decisions.

The Ajmera Law Group wishes to publish on a yearly basis, residency, and citizenship by investment on asset class basis investment options for HNI and UHNI.

Residency and Citizenship by Investment (RCI)

options by asset class

Select your residency and citizenship program by investing in an asset class of your choice.

*Investment in >>>>>>*	*Real Estate*	*Financial Market / Funds / Bonds*	*Donation to government development project/fund or such other funds*	*Enterprise / Business – New, Existing, JV*	*Start-up Program*	*Yearly Income*
*USA*	No	No	No	Yes	Yes	No
*Canada*	No	No	No	Yes	Yes	No
*Australia*	No	Yes	No	Yes	Yes	No
*New Zealand*	No	Yes	No	Yes	Yes	No
UK	No	Yes	No	Yes	Yes	No
*Ireland*	No	Yes	Yes	Yes	Yes	No
*EUROPE:*
*Portugal*	Yes	Yes	Yes	Yes	Yes	Yes
*Spain*	Yes	Yes	No	Yes	Yes	No
*Greece*	Yes	Yes	No	Yes	Yes	No
*Bulgaria*	Yes	Yes	No	Yes	Yes	No
*Malta*	Yes	Yes	Yes	Yes	Yes	No
*Cyprus*	Yes	Yes	No	Yes	Yes	No

*Turkey*	Yes	No	Yes	Yes	Yes	Yes
*CARIBBEAN:*
*St. Kitts & Nevis*	Yes	No	Yes	No	No	No
*Dominica*	Yes	No	Yes	Yes	No	No
*Grenada*	Yes	No	Yes	No	No	No
*St. Lucia*	Yes	yes	Yes	Yes	No	No
*Antigua & Barbuda*	Yes	No	Yes	Yes	No	No

Disclaimer:

This is only a general indication of each RCI program. There are many more additional requirements for each program. The investor must seek legal advice from a licensed attorney who is specialized in RCI practice of the respective jurisdiction.

April 29, 2021

Are you looking for a second home in the world!

By Ajmera Law Group Residency & Citizenship by Investment

A quick analysis of the Residency & Citizenship by investment program of the world!!

Ajmera Law Group’s analysis and comparison of RCI programs of several countries will surprise you.

To attract the right kind of global businesspersons and entrepreneurs to their countries, two G-7 countries have reduced the investment amount which is now the lowest in the world.

Name of the country	Investment amount	Name of the visa program
USA	US$ 200,000 to 1,800,000	Non-Immigrant L1, E2 visa, and Green card under EB-5
Ireland	€ 500,000	Permanente residency
Australia	A$ 500,000	Business innovation Stream (Provisional to PR)
New Zealand	NZ$ 100,000	Permanente residency
Canada	CD$ 100,000	PNP Business program ( temporary residency to PR)
UK	£ 50,000	Innovator visa (ILR)
Malta	€ 250,000	Permanente residency
Cyprus	€ 300,000	Permanente residency
Portugal	€ 350,000-500,000	Golden Visa – Permanente residency
Spain	€ 500,000	Golden Visa – Permanente residency
Greece	€ 250,000	Golden Visa – Permanente residency
Bulgaria	€ 512,000	Permanente residency
Turkey	US$ 250,000	Citizenship
Grenada	US$ 150,000	Citizenship
Carrabin Countries	US$ 100,000+	Citizenship

April 19, 2021

“Invest in Turkey” – hoardings appear on Srinagar’s main cross road – Media and authorities at a loss regarding this advert

By Ajmera Law Group Headlines, Residency & Citizenship by Investment and Indian market

An article by Mr. Nasee Genani has been published on Outlook.com titled:

Mysterious ‘Invest In Turkey’ Hoardings Appear In Srinagar’s Lal Chowk

After reading the article, it appears that the media and local authorities are perplexed regarding the origin of these hoardings. This story was followed by several other media. ( IBT, JKNS, VEN, etc.)

These hoardings were put up by an immigration consulting firm from Dubai with offices in Mumbai and Delhi. The likely aim of these hoardings was to attract Indian investors to invest in Turkish real estate so as to acquire Turkish Citizenship.

Investors, including Indian citizens, acquiring Turkish citizenship are eligible to apply for an E2 business visa of the USA and a business visa of the UK (under the Ankara Agreement between the UK and Turkey).

This is not an invitation from the Turkish government to apply for citizenship but an advertisement by an immigration agent who is licensed in the UAE but not in India.

But at the same time, it is interesting to note that this Dubai-based immigration consulting firm is operating illegally in India.

Invest in Turkey — Istanbul, culture and historical capital of Turkey. Aerial photo from above. City view and landscape photo by drone. The Galata Kulesi Tower

Why illegally you may ask?

When it comes to advising on Turkish immigration and visa law, the Indian law clearly states that only Indian advocates can practice law ( Indian or Foreign), including immigration law, under the Indian Advocates Act of 1961 and The Supreme Court of India’s judgment.

In view of the same, RBI has also issued a notification specifically directing Indian banks and other authorities to refrain from issuing or renewing permission to foreign law firms from establishing offices in India and opening bank accounts in India.

Note: After this blog was written, it has been brought to the attention of the author that the said hoardings have been duly removed.

April 12, 2021

Continuously adapting to new ideas, regulating the market and protecting investors makes the United Kingdom the most favoured investment destination for global investors.

By Ajmera Law Group Global Financial Markets

Tips for Indian business persons and start-ups to enter the UK market and expand their business across Europe!

Why is London, UK, an important centre for the financial markets of the world?

Ans: The UK has almost 475 years of financial market history, which has undergone major changes over time to meet the demands of the market. At the same time, the UK as a country continues to protect investors by regulating the financial market and its players quite vigilantly.

The UK stock market has survived several wars and pandemics in the last 475 years. At the present time, it provides several platforms and products to attract investors not only from within the UK and Europe but also from around the world.

The UK financial market is evolving to keep up with the times and is far from being a stagnant market. It is a continuous work in progress.

In addition, the UK is in the GMT time zone, which makes it easy to follow Asian and North American markets during the same day. This also makes traveling to and from London easy around the world.

Can you provide us with a brief history of the UK financial market and how the London Stock Exchange (LSE) came into existence?

Ans: The Royal Exchange was founded by English financiers, Thomas Gresham and Sir Richard Clough, and was based on the model of the Antwerp Bourse. It was inaugurated by Queen Elizabeth I of England in 1571. At the time it was not accessible to stockbrokers because the elite class considered their behaviour as uncouth. Hence the trading of stock and commodities took place in the coffee houses of London.

Stocks grew and money was raised by the new companies and also the royal court. This was the start of organised trading in marketable securities in London, and perhaps the world.

In 1669, the Royal Exchange building was rebuilt and the exchange was re-established after being destroyed during the Great Fire of London in 1666. The Royal Exchange housed not only brokers but also merchants and merchandise. This was the birth of a regulated stock market.

It was in 1773 when a new and more formal “Stock Exchange” was opened in Sweeting’s Alley. An entrance fee was introduced on a daily basis and from then on, an annual fee was charged. However, as there were no trading guidelines, frauds were rampant.

On 18^th May, 1801, the foundation stone was laid for a new stock exchange building. It was finished on 30^thDecember of the same year and the words, “The Stock Exchange”, were incised on the entrance.

The first rule book of the stock exchange was introduced in February 1812 that gave detailed definition of ‘settlement and default’.

Between 1820 and 1840, the foreign market at the Exchange allowed for merchants and traders to participate, and the Royal Exchange hosted all transactions where foreign parties were involved. The constant increase in overseas business eventually meant that dealing in foreign securities had to be allowed within all of the Exchange’s premises. This was a boom period for the financial market in the UK, which eventually became an integral part of London.

After going up and down for almost 100 years, the UK stock market finally came into prominence after the Second World War and a new stock exchange tower was opened in 1972.

The year 1973 was a land mark year in the history of London financial market. Firstly, it was marked by the admittance of both women and foreign-born members on the floor. Secondly, during this year, the London Stock Exchange formally merged with the eleven British and Irish regional exchanges, including the Scottish Stock Exchange.

On 3^rd January, 1984, the Financial Times and the Stock Exchange partnered together to launch the FTSE 100 Index. This is one of the most useful indices of all, and tracks the movements of the 100 leading companies listed on the Exchange.

In 1991, when the Governing Council of the Exchange was replaced by a Board of Directors drawn from the Exchange’s executive, customer and user base, the trading name of the Exchange was changed to, “The London Stock Exchange” (LSE).

From the above history, one can easily see how the LSE has continuously evolved over centuries and adapted to changing times to meet the needs of business persons and investors.

What is the “Big Bang” in context of the London / UK financial market and stock exchange and what are the major changes that followed the same?

Ans: In 1986, the UK financial market introduced a series of changes. The term ‘Big Bang’ was coined to describe these deregulatory measures that included eradicating fixed commission charges, removing the distinction between stockjobbers and stockbrokers on the London Stock Exchange and changing the open outcry market to electronic trading platforms.

The Big Bang was followed by major developments in the LSE, such as, the launching of the Alternative Investment Market (AIM) for smaller companies to expand into international markets in 1995.

In 1997, Electronic Trading Service, popularly known as known as SETS, was launched to give speed and efficiency to the market. This was followed by the introduction of CREST settlement services in 2000.

In the year 2000, a very unique thing happened. The London Stock Exchange went public and became a listed company on its own stock market. LSE thus transferred its role as UK Listing Authority to the Financial Services Authority (FSA-UKLA).

EDX London, an international equity derivatives business, was created in 2003 in partnership with OM Group.

In 2004, the London Stock Exchange moved to a brand-new headquarters in Paternoster Square, close to St Paul’s Cathedral.

In 2007, the London Stock Exchange merged with Borsa Italiana, creating the London Stock Exchange Group (LSEG).

Once again we can see that following the ‘Big Bang’, other major changes were introduced by LSE to incorporate technology and meet the growing demands of the investors. Not only that, but in order to allow small and medium sized companies to raise funds at the LSE, more than one exchange was created. This made LSE the most popular exchange around the world and many foreign companies launched their IPOs and listed on LSE.

What are the various trading platforms or exchanges on the London Stock Exchange?

Ans: There is the Main Market of LSE and it is divided in to three segments – Premium, Standard and High Growth Segment. Each exchange is designed to cater to different sizes and types of companies to raise capital.

Premium Main Market is for the world’s leading companies with potential to join the FTSE UK Indices.

Standard Main Market is for core European listing standards for international issuers.

High Growth Segment is designed for innovative, high growth companies allowing additional flexibilities.

On the other hand, Alternative Investment Market (AIM) is a platform for small and medium size growth companies in need of access to capital to realise their growth and innovation potential. Growing companies from around the world and at different stages of development can join AIM.

For each of these markets, one needs to fulfil entry, listing, trading and compliance requirements.

Hence, rather than having just one market and platform, there are several markets and platforms available for different companies where they can raise the capital. This gives investors the choice and option to invest in different companies depending on their type and size. The indices corresponding with each platform gives investors a fair indication of the movement of the market so that they can make an informed decision about their investments.

What will be effect of BREXIT on LSEG and its members?

Ans: Procedurally, the UK will officially cease to be a member of the EU as of 31^st December, 2020. If there is no trade deal before this date, the UK will automatically drop out of the EU’s main trading arrangements (the single market and the customs union). In view of a negotiation stalemate, LSEG has already prepared a contingency plan. London based CBOE has set up an Amsterdam hub, while London based Aquis Exchange has set up a Paris hub.

LSEG has also launched the Turquoise platform which will give access to 19 European stock markets from a single account. Through this platform, LSEG offers market participants – including retail investors, institutions and SMEs, access to Europe’s capital markets. This platform has won the Financial News 2015 Award for Excellence in Trading and Technology for the Most Innovative Trading Product/Service.

What is the size of the LSE market and how has it performed before, during and after COVID-19?

Ans: If we talk about the Main Market, it is home to around 1,100 companies with a combined market cap of £3 trillion. The FTSE 100 cap is 1.81 trillion. Before the start of the COVID-19 pandemic, the FTSE 100 Index was at 7610 points. During the pandemic, the performance of LSE plummeted like every other market in the world and it went down to 4993 points. UK stocks recovered in November 2020 and in December 2020, it went up to 6578 points.

On the other hand, the FTSE AIM 100 Index was at 4973 points before the pandemic and during the pandemic it went down to 3006 points. In December 2020, it recovered beyond the pre-pandemic time and went up to 5470 points.

The FTSE Techmark 100 Index was at 6100 points before the start of the pandemic. It went down to 3800 points during the peak of the pandemic. In December 2020, it bounced back to 6200 points.

However, in the coming months, two main factors are likely to affect the market. The first – the nature of deal made with the EU following BREXIT, and second – the resurgence of the current pandemic and the efficacy of the COVID-19 vaccine in controlling this resurgence.

How much foreign investment has come into the UK in the past few years?

Ans: According to UNCTAD’s World Investment Report 2020, FDI inflows to the United Kingdom fell for the second year in a row, reaching USD 59 billion in 2019, compared to USD 65 billion in 2018 and USD 101 billion in 2017.

FDI stock in 2019 was about USD 2 trillion, compared to USD 1430 billion in 2018. The United Kingdom was the 8th recipient of global FDI flows.

The BREXIT process has raised concerns among some investors about the increase in trade costs with Europe and the volatility of the pound sterling.

London remains the financial capital of Europe, home to the European headquarters of almost 60% of companies on the Fortune 500 ranking. Furthermore, Great Britain maintains a strong currency, despite its recent depreciation, and the country remains one of the most important European consumer markets.

The United Kingdom was eighth out of 190 economies in the Doing Business 2020 ranking established by the World Bank, gaining a position compared to the previous year.

How is the real estate market doing in the UK?

Ans: As the UK has one of the largest financial markets in the world, it is home to several multinational companies. It is also home to many rich and famous personalities of the world. Hence, after the financial market, the UK real estate market has become one of the most favoured destinations for foreign investment, both into commercial as well as residential properties. This makes the UK, and in particular the city of London, one of the most expensive real estate markets in the world.

As per the UK Statistic Department report, the UK is the biggest commercial real estate market in Europe, followed by Germany and France.

In the UK, commercial property investments have increased since 2016, reaching 512 billion British pounds in 2018. This dynamic of the market is impacted by multiple factors.

Unsurprisingly, London is the biggest office real estate market in the UK, with a total of over 270 million square feet of office stock as of the third quarter of 2019.

These processes also affect the residential sector; increasing demand and subsequently house prices around bigger cities, and thus, causing concerns about affordable housing. The average house prices in London at 479,000 British pounds were nearly twice as high as in South West England.

How has the COVID-19 pandemic affected the real estate market in the UK?

Ans: COVID-19 has affected the market considerably and in order to encourage the residential real estate market, the UK government has introduced the Stamp Duty Land Tax (SDLT) holiday.

Under this holiday, both UK and foreign citizens will be exempt from paying stamp duty until 31^st March, 2021.

UK real estate is an attractive asset for international buyers, particularly when we look at the top end of the market. For example, in 2019 alone, non-UK residents were responsible for over half (55%) of all prime central London (PCL) property transactions. Its historical resilience and rate of capital growth over long-term periods ensures consistent market demand for bricks and mortar in London.

COVID-19 has not dampened this demand, particularly when it comes to buyers based in Hong Kong, mainland China, and Singapore. According to Beauchamp Estates, the amount of Hong Kong and mainland Chinese investment it handled into PCL property between December 2019 and June 2020 totalled $374 million. It also found that this group of buyers accounted for 20% of deals above 10 million pounds in the capital.

On top of this, the political situation in Hong Kong is compelling investors in the jurisdiction to consider stable markets with assets that can deliver modest capital growth in the medium to long term. The PCL property market is a popular destination, and based on the current circumstances, there is good reason to expect an influx of investment from these investors in the coming months.

Additionally, during the pandemic, many ultra HNI investors who wanted to invest more than 5 million pounds saw a bargain in investing in the London residential market and the demand went up by 30%. Many brokers offering prime Central London properties witnessed the busiest summer months during 2020. Properties with asking price of 6 million pounds in the year 2019 were sold for 4.65 million pounds during the pandemic.

On the other hand, because of the travel restrictions, the influx of foreign investors to the UK was reduced considerably during the pandemic resulting in bargain prices for local buyers as well in the lower to middle range residential sector.

How can Indian business persons and start-ups enter the UK market and expand their business across Europe?

Ans: Last year, the UK government introduced the UK Start-Up Visa program and the Innovator Visa program to attract entrepreneurs, innovators and start –up founders to the country.

Under the Start-Up Visa Program of the UK, any start-up in the world can present their innovative idea to a Home Office designated organisation. If the idea is accepted, the start-up can set up a company in the UK. In general, the business idea must be innovative, viable and a scalable business venture. Indian start-ups have a good prospect of qualifying under this program.

Under the Innovator Visa program, a revenue generating company having an innovative business proposal and ready to invest a minimum of 50,000 British pounds, may qualify for the Innovator Visa of the UK. The endorsing body must confirm that the business is active, trading and sustainable.

Obtaining this Innovator Visa can eventually lead to an indefinite right to live in the UK, and subsequently to citizenship.

What are the new announcements made by the UK government to attract international students and professionals?

Ans: As the UK moves towards BREXIT, the government has announced new immigration rules to attract international professionals to the UK. Under these rules, foreign nationals should have a job offer from a government approved UK company and meet education, experience, language, minimum pay and other security requirements.

There are two types of visas available for skilled workers and professionals:

Temporary visa (Work permit)
Permanent visa (Indefinite right to live in the UK)
Does the UK have any investment based program for granting residency?

Ans: The UK immigration rules are set to attract investors, entrepreneurs, and people of talent. The investor category is designed to allow wealthy individuals, who make a substantial financial investment in the UK, to obtain permission from the UK to enter as an investor under the Tier 1 category.

It requires an investment of at least 2,000,000 British pounds either in British corporate bonds, share capital or loan capital in active and trading UK registered companies. This is one of the fastest and most secure ways to obtain UK residency. One can be approved in as little as 10 weeks!

January 1, 2021

Portugal : From an economic disaster to an economic success in just a decade!

By Ajmera Law Group Global Financial Markets

Portugal: From an economic disaster to an economic success in just a decade.

An ideal location for Indian exporters and business persons to expand their business in Europe and South America

What is the historical, political and economic background of the relationship between India and Portugal?

Ans: India and Portugal share a long history of 700 years of colonial rule which ended in 1961. Portuguese traders came to India and settled at various ports, eventually becoming their rulers. After 1961, there was no diplomatic and economic relationship between the two countries until 1975.

However, due to its colonial history, Portugal currently has 70,000 people of Indian decent – 7% of its total population of 10 million. Though Portugal is a small country, it is of great strategic importance in Europe; having inherently European roots and the cultural diversity of Latin America. For Indian business persons and exporters, it can be an ideal location to enter the European market as well as the South American market.

The histories of India and Portugal are closely linked. The current Prime Minister of Portugal, Mr. António Costa (born in 1961 in Portugal and a lawyer by profession), is of Indian origin. He was felicitated with the prestigious Pravasee Bhartiya Sanman award by President of India in 2017.

The former speaker of Portugal, Mr. Narana Coissoró, is also of Indian origin.

Apart from these personalities, there are quite a few notable politicians and business persons in Portugal who are of Indian origin.

How strong is the Portuguese economy today?

Ans: The mainstay of Portugal’s economy is tourism and the industries related to it. It constitutes 17% of the country’s economy. The economic crisis of 2008 had a devastating effect on Portugal’s economy and financial bailout was provided by the European Union so that the country could come out of its worst known economic setback.

Interestingly, the constructive measures implemented by the Portuguese government in the last 10 years have greatly revived Portugal’s economy, making it vibrant once again with a positive outlook.

What measures has Portugal taken to revive its economy?

Ans: The Portuguese economy, bailed out by the European Union eight years ago, is currently booming. It is enjoying its highest economic growth in nearly two decades, fuelled by record tourism, an upswing in the housing market, a growing tech sector and strong exports.

Wharton finance professor Joao Gomes, a native of Lisbon, said that Portugal’s economic recovery is better understood in the context of the broader recovery across Europe, which he rated as “excellent.” Portugal has benefited from Europe’s economic recovery in a few ways: tourism, exports and increased domestic investment. These have helped reduce the unemployment rate from its peak of 17.5% in the first quarter of 2013 to 7.9% in the first quarter of 2018.

Some visible measures we see enacted include – reduction in government spending, reduction in VAT tax from 23% to 13%, giving tax exemption to foreign retirees and introducing the Golden Visa Program offering Portuguese residency to non-EU citizens, thereby providing access to the European Union market.

Rental laws have also been changed to allow landlords to renovate old buildings. The idea behind this was to create jobs within the community.

Though the Portuguese government is currently faced with huge debts, the future looks promising from several perspectives.

The country’s economic recovery has been noticed by EU and many economists around the world. The model adopted by Portugal is also being followed by other EU countries such as Spain, Greece and Ireland.

How are the Portuguese financial markets faring in midst of all this economic turmoil?

Ans: As part of the pan European exchange since 2002, Euronext Lisbon is a stock exchange based in Lisbon, Portugal.

The Euronext Lisbon trades equities, public and private bonds, participation bonds, warrants, corporate warrants, investment trust units, and exchange traded funds.

The BVL General Index is the exchange’s official index, and includes all listed shares on the official market and settlement is T+2. Like most exchanges, it has derivatives as well. The trading hours are 8 a.m. to 4:30 p.m., Monday through Friday.

Interbolsa is Euronext’s Central Securities Depository and is a leading provider of Settlement and Custody Services.

Despite the strong economic performance and sustained reform momentum over the past few years, Portugal entered the COVID-19 crisis with undersized capital markets. These markets must now be mobilised to support a resilient, dynamic and sustainable recovery, according to a new OECD report.

The improved economic conditions in the country over the recent years have not translated into a rise in the use of capital market financing by Portuguese companies. At the end of 2019, there were only 47 companies listed on the Portuguese stock market, only a third of the number listed back in 1997.

Instead, companies heavily rely on bank financing, with very few using long-term bond markets. The picture for private capital markets is similar. In 2019, the Portuguese share of European private equity investments was less than half of its share in the GDP of the European Union.

Why is real estate a very important market in Portugal?

Ans: In the year 2020, Portugal’s housing prices continued to rise strongly, amidst surging demand buoyed by low interest rates. Property prices in Portugal rose by 8.12% during the year to Q2 2020, slightly lower than the previous year’s 10.09% growth. On a quarterly basis, house prices fell slightly by 0.3% in Q2 2020.

The construction activity weakened in 2020, mainly due to the COVID-19 pandemic. In the first half of 2020, the number of licensed dwelling permits in Portugal fell by 4.1% to 11,259 units from a year earlier, after rising by 18.4% in 2019 and 43.5% in 2018, based on INE figures.

Rents and rental yields are good in Lisbon, at around 5.45%.

Due to the Golden Visa Program and renovation of old buildings, the housing and real estate market is further showing a strong growth in Portugal, mainly in Lisbon and Porto city.

This growth offers two opportunities for Indian HNIs and business persons. Those interested in exporting or expanding their business can invest in real estate in Portugal, obtain residency and then expand their business in the European mainland.

Indian real estate developers interested in entering the European real estate market can do so by undertaking small renovation projects in Portugal and then gradually increasing their presence in Portugal, and then subsequently in Europe. However, construction activities are regulated and licensed in Portugal. This may necessitate the presence of a local partner or a company who has all the required licenses and permits to undertake renovation projects or new development projects in Portugal.

What are the programs under which Indian business persons and exporters can expand their business in Europe using Portugal as a base?

Ans: Under its Golden Visa Program, Portugal offers a variety of options for obtaining residency of Portugal. This residency status allows one to work, study or do business in Portugal.

Golden Residence Permit holders have access to free movement across all 26 Schengen countries and stays of up to 90 days in every 6 month period (from the date of entry) in these countries, which is a great advantage to foreign citizens who are usually subject to strict EU immigration regulations and visas when travelling to or across Europe.

This Golden Visa scheme aims to attract wealthy foreign investors, business persons and exporters as well as their families, to help re-launch the Portuguese economy. It is a great opportunity for non-EU investors to buy luxury holiday homes in renowned resorts, to carry out financial investments or to set up business ventures in Portugal.

Application for a Golden Visa can also be made from within Portugal. With extremely reduced minimum stay requirements, the Golden Visa is clearly one of the most attractive residency programs for aforementioned category of individuals in the world. It is an excellent program whereby business persons can conduct their business in the European mainland without having to stay there on a long term basis.

What are the investment requirements to obtain residency of Portugal?

There are several passive or active investments options available.

One can choose to invest in one of the following investment options:

Euro 500,000 in any real estate
Euro 350,000 in a real estate which is 30 years and older

Euro 250,000 in a restoration of heritage building

Euro 350,000 in a research and scientific activity
Euro 1 million in financial instruments
Euro 350,000 in Investment fund or Venture fund

No definite investment but create 10 jobs for local Portuguese persons
Euro 350,000 investment in a company that will create 5 jobs for a period of 3 years in the National Territory Region.

These investments are for a period of five years and the resident permit can be renewed every 2 years. This resident permit allows access to other Schengen areas of Europe for visits up to 90 days. At the end of 5 years, one can apply for permanent residency or choose to apply for citizenship. Citizenship of Portugal allows the person to live, work and do business in any Schengen country.

In each of the aforementioned investment categories, children under the age of 18 years can be included; if they are financially dependent on their parents, children up to the age of 25 years can also be included in the same application.

How can obtaining Portuguese residency be beneficial to Indian exporters and business persons?

Ans: The main aim behind obtaining Portuguese residency is not to leave India and immigrate, but to create a bigger customer base for Indian products and services in Portugal and Europe. If you try to export goods from India, you need to go through the whole bureaucratic process (including cumbersome paperwork) and delivery of goods can take several days, weeks or months.

If you are a resident of Portugal, you can register a company in Portugal, purchase a warehouse and then distribute goods all across Europe within 2-3 days. You can receive payment in a local bank in Europe. Many exporters from China, Taiwan and Korea are doing business in Europe in this manner. If Indian business persons do not embrace this approach, they will soon be facing tough competition for exporting their goods to these countries from expat exporters. This is simply because importers in Europe will prefer local suppliers over Indian suppliers, unless their product or service is unique or unavailable locally.

How can Indian SMEs do business in Portugal?

Ans: Successful Indian business persons can prepare a business plan that includes the nature of the potential business they plan to start, the type and amount of investment they are willing to make and how they can productively contribute to the Portuguese economy.

Based on this, they can apply for a resident permit at the nearest Portuguese Consulate. If the application is approved, they will be granted a 4-month visa to enter Portugal and start a business after obtaining a resident permit from Serviço de Estrangeiros e Fronteiras (SEF). This permit can be renewed every two years.

The business persons must be actively involved in the business and must not be absent from Portugal for more than 6 consecutive months or 8 interpolated months.

How can Indian start-ups enter the Portuguese market and what are the opportunities?

Ans: Aligning with the EU’s policies, the Portuguese government has introduced a very vibrant and active start-up program to attract global start-ups that will use Portugal as a base to enter the European market.

Indian start-ups may present their innovative ideas to government approved incubation centers and if their ideas are accepted, the Portuguese government will allow these start-ups to apply for the necessary resident permit for a period of one year.

Once the start-up is established in Portugal, the entire ecosystem and the government’s support system will be accessible to the Indian start-up and they will be treated in par with Portuguese start-ups.

Is Portugal a good destination for retirees?

Ans: Of course. Portugal has beautiful Mediterranean weather and is a favoured destination in Europe for retirees. Due to its low cost of living, high quality of life and low crime rate, it’s an ideal country to retire on the mainland of Europe.

In order to attract wealthy retirees to Europe, the government of Portugal has devised a special program. Under this program, applicants must show that they have sufficient income from investments or business operations outside of Portugal to financially support their stay in Portugal.

January 1, 2021

Canada – One of the best countries in the world to study, work, invest, do business or retire!

By Ajmera Law Group Global Financial Markets

A perfect landing pad for Indian Start-Ups:

Why has Canada become a popular destination among Indians in recent years?

Ans: Canada is a unique country that has implemented an open immigration policy since decades. Preceded only by the USA, Canada accepts the highest number of immigrants per year (275,000-300,000). Its immigration policy is progressive and immigrant friendly, which is why most students who go to study in Canada are able to receive immigration after their study. Its Federal Skilled Worker (FSW) program and Provincial Nominee Programs (PNP) are designed to attract the best qualified and educated professionals in the world. This openness has made Canada a very popular destination, especially amongst students and professionals.

There are other important reasons that make Canada an attractive prospect. These include:

Canada has been consistently voted as one of the best countries to live in by various global agencies and for the right reasons. A very large country with a small population, Canada has abundant natural resources and is endowed with breathtaking natural beauty.
Canadians value multiculturalism and human rights very deeply. It is country which is known for its human rights values and its empathy towards refugees.
Canada is the largest trading partner of the USA. Because of the NAFTA agreement between Canada, the USA and Mexico, Canada is often used by many immigrants as backdoor entry point into the USA.
Canada has some of the best and oldest universities and colleges in the world. The tuition fees charged by these top class institutions are quite reasonable when compared to similarly ranked institutions in the USA. This is due to the fact that educational institutes in Canada are funded by the government and most of them still operate as nonprofit organizations.
Canada offers its citizens and residents a free universal health care plan. Its health care system is advanced and well-equipped.
Due to free medical care, affordable education and housing, most Canadian cities offer a high quality of life coupled with a comparatively low cost of living.
Canada is a world leader in many sectors such as forestry, fisheries, hydropower, aerospace, mining and natural gas. Recently large diamond deposits have also been discovered. Canada has the largest number of fresh water lakes in the world and fresh water is one of its biggest natural resources.

Why does Canada attract so many immigrants from around the world?

Ans: To maintain its population and ensure consistent economic growth, Canada has devised an open and welcoming immigration policy. In general, it can be said that Canada aims to attract 1% of its population every year under different immigration programs. This is not only true for Canada, but also most western countries who wish to attract selected type and number of immigrants to their countries for various reasons. What we are witnessing today is a period of highest selective and elective migration that humankind has ever seen.

How are the financial markets doing in Canada?

Let us first talk about the history of the Canadian stock market. Canada has three major stock exchanges – Montreal, Vancouver and Toronto. The most popular and well-known is the Toronto Stock Exchange. (TSX)

The Toronto Stock Exchange is based in Toronto which is the capital of the province of Ontario. TSX is the ninth largest exchange in the world by market capitalization. The exchange was started in 1850s.

This exchange operates from EY Tower in Toronto’s financial district.

The TSX is a wholly owned subsidiary of the TMX Group for the trading of senior equities. A broad range of businesses from Canada and abroad are represented on the exchange.

As I had mentioned in my previous article on the USA, a general perception is that stock market movements reflect the economy of a country. But nothing can be farther from the truth. In fact, stock market movements are dependent on the loss and gain on investment made by investors in the stock market.

After the onset of the COVID-19 pandemic, a rise in Canadian stock markets surprised many. The COVID-19 crisis has hit businesses of all kinds and sizes. However, SMEs do not trade on stock markets and they are the ones which are most affected. Companies that are on the stock market are doing reasonably well in Canada.

Tech companies in particular are doing very well. This is what is reflected in the market. In case of certain sectors, the COVID-19 situation has shown that bigger the problem, greater are the opportunities. In the present circumstances, tech companies are enjoying unbelievable growth as the physical world is gradually morphing into a digital and virtual one.

Furthermore, the Canadian economy was boosted by lower mortgage rates and stimulus packages introduced by the government to counteract the effects of the pandemic. This is what is reflected in the technology sector of the Canadian stock market which has shown a gain of almost 25%.

On the other hand, mutual funds (MF) and exchange traded funds (ETF) of certain sectors are not doing well. Investors have pulled out their investments from these products and reinvested the amount in tech companies.

How is the real estate market in Canada?

Ans: There are more than 300,000 immigrants coming to Canada each year. Because of low mortgage rates, the Canadian real estate market is doing extremely well. It must also be noted that this market is well regulated and well managed, cutting the risk of extreme highs and extreme lows substantially.

The real estate markets of Vancouver and Toronto are doing exceptionally well, so much so that the municipalities of these two cities have introduced an additional 15% tax for foreign investors who wish to purchase real estate in these two metro cities. This is essentially to protect the interests of locals who can buy the same real estate at a cheaper price.

COVID-19 has had no significant effect on the housing real estate market in Canada but a noticeable shift has been seen in the commercial and industrial sectors. Tenants and occupants of these real estates are now asking for additional services (upgraded and more secure facilities) from building owners.

Some of the ideal opportunities to invest in real estate in Canada are student housing facilities around university campuses and senior citizen facilities (old age homes). These two types of housing facilities are doing extremely well in terms of rental income and property appreciation.

As per the Housing Association of Canada data published on 15^th September, 2020, “home sales recorded over the Canadian MLS® Systems increased a further 6.2% in August 2020, raising them to another new all-time monthly record.

Unlike the previous two months in which activity was up right across the country, sales in August were up in about 60% of local markets. Gains were led by the Greater Toronto Area (GTA) and British Columbia’s Lower Mainland. With on-going supply shortages in so many parts of Canada, it is interesting to note that the GTA and Lower Mainland also saw a considerable amount of new supply become available in August.

Actual (not seasonally adjusted) sales activity posted a 33.5% y-o-y gain in August. It was a new record for the month of August, and the sixth-highest monthly sales figure of any month on record. Transactions were up compared to last August in almost all Canadian housing markets.”

What are the opportunities for Indian multinationals and public limited companies in Canada?

Ans: Canada has always remained in the shadow of its more illustrious neighbor, the United States of America, and has always been considered as the second best option after the USA. Indian multinational companies and other big players have not yet taken advantage of the Canadian economic policies as much as they should have in order to enter the North American market.

A classic example of this is the information technology (IT) sector. Indian IT companies have entered the Canadian market pretty late as compared to their entry in the U.S. market.

Rather than using Canada as a base to serve American companies, the strategy used by Indian IT companies was exactly the opposite. They made USA a base to serve their Canadian clients. Most Indian IT companies are interested in manpower supply which was allowed in the USA but not in Canada under the existing visa rules. Hence Indian IT companies ignored Canada for a while and set up shop in the USA.

Indian IT companies could have established a base in Canada and served North American companies with much lower operating costs than the USA, but it was not to be. Similarly, other Indian companies can use Canada as a base to serve the North American market under the North American Free Trade Agreement (NAFTA).

Though bilateral trade between Canada and India started many years ago with the Team Canada Mission in 1995 headed by the then Prime Minister of Canada, Honorable Mr. Jean Chretien, India has still not established great trade links with Canada and vice versa.

How can Indian SMEs enter into and conduct business in Canadian markets?

Ans: It is a fact that SMEs, unlike multinational companies, prefer to do business by themselves rather than appointing country managers and CEOs. In this situation we need to look closely at the business immigration rules of Canada.

Canadian states are known as provinces and there are 10 provinces and three territories in Canada. The Federal (Central) government of Canada and each of these provinces have their own business immigration programs to welcome SMEs of the world to Canada.

It is not possible to discuss all these programs here but suffice it to say that these programs are designed in a way to meet the economic and social needs of the country as a whole and the particular province in question.

In general if one meets the following requirements, there is a fairly good possibility of obtaining the necessary visa to do business in Canada.

These requirements are:

Applicant must have net assets $500,000 CD and above (2.5 crores INR) in India in his/her name, including spouse’s assets. Family assets belonging to parents and siblings (in their name) are not acceptable.
Applicant must have 2-3 years of business or managerial experience in a large corporation.

Applicant must be involved in a profit making business on a full time basis for at least 2 years.

Applicant’s education level must be 12^th grade pass and above.
Applicant must have working knowledge of the English language.
Applicant must undertake or should have undertaken a business exploratory trip to Canada.

Applicant must have the intention to start a business in Canada by purchasing an existing business or a franchise business or start a business in partnership with someone with a minimum investment of $200,000 CD or more in a rural area.
Applicant must prepare a detailed business plan of doing business in Canada and this should be related to his/her past business experience outside of Canada.

It goes without saying that one needs to provide extensive paper work to meet the above requirements.

These requirements don’t seem very stringent. Then how come Indian SMEs are NOT taking advantage of these programs?

Ans: Indians SMEs are not taking advantage of these programs as one might expect to and there are several reasons why. Some of which include:

Entering into a family business is inherently cultural to many Indian business communities. Such businesses do not operate with a business plan, and most often than not, are self-sustaining and do not need professional help. Hence, most SMEs do not have the necessary documents, paperwork and business plan that are needed apply for Canadian business visa.
Most Indian business persons are not big risk takers, especially when it comes to getting out of their comfort zones. We cannot generalize but what I have observed is that established business persons are less of risk takers than novice ones who are ready to take a leap of faith. When we talk of successful business persons in countries like the USA and the U.K., we must remember that these individuals went to these countries as workers/sponsored family members and slowly worked their way up to establish themselves as successful entrepreneurs.

Rather than approaching qualified lawyers and related professionals to assist in entering the Canadian market, most Indian business persons prefer to consult an array of agents and consultants. Google search and the University of Whatsapp have become universal sources of information. Friends and relatives in Canada often become misplaced sources of guidance. Due to this (mis)information overload, Indian business persons often find themselves in a state of confusion regarding the true state of affairs.

Many Indian SMEs wish to start/purchase a business in Canada that is very different from the one they have actual experience in operating and managing in India.
There is a certain cost involved in the process as per international standards and many Indian SMEs are unwilling to pay for these costs.
There are very few experienced and qualified lawyers in India who can advise and assist Indian SMEs to go global. The Indian market is dominated by unregulated professionals who give conflicting information, further complicating the matter.

During my two and a half decades of practice, I have observed that unlike Indian SMEs, SMEs of many Asian countries are taking full advantage of the aforementioned Canadian business programs and establishing their presence in Canada. Physical presence and know-how of doing business in Canada give a head start to these SMEs as compared to their Indian counterparts, especially in the field of import and export.

What are the opportunities for start-ups in Canada?

Ans: There are tremendous opportunities for Indian start-ups who wish to enter the North American market. Canada is the first country in the world to introduce the Start-up Visa Program to welcome start-ups from all over the world.

The criteria to qualify under this program are very easy to fulfill.

A brilliant idea in any sector which can have commercial applications for Canada, the USA or the world and which is accepted by a Canadian government approved incubation center or angel investor or VC is the primary requirement.

English language requirement is also very achievable – minimum 5 bands in IELTS exam.

Up to five founders can apply under the same start-up idea.

If Indian start-ups need assistance, there is professional help available from Canada.

Following Canada’s example, 22 other countries in the world have introduced a start-up visa program to attract start-ups from the world over. Indian start-ups must definitely take advantage of these programs because there is no dearth of talent and ideas in the country.

Unfortunately, even many IT associations and VC associations in India are not aware of these Start-Up Visa Programs.

Why should Indian investors invest in Canadian financial markets or real estate or even consider immigrating under Canada’s business immigration programs?

Ans: Why not, I ask? There are a number of reasons why Indian investors must seriously consider Canada as a potential investment destination.

If as a parent you want your child to study in Canada, the first option I would advise you would be to consider immigration under Canada’s business immigration programs. This is because once you and your family become Canadian residents, your child will be entitled to free education until grade 12 and his/her post-secondary and university education fees will be reduced by 80%. As a resident of Canada, your child will have less difficulty in finding suitable employment during and after completing his/her education as compared to international students.
In the event you are unable to take up residency of Canada for whatever reasons, your children can still study and stay in Canada. However, the cost of living and education has to be paid in Canadian dollars. Hence it will be prudent to invest in Canadian stock market or real estate and park your money in advance in Canada at lower exchange rates and reduce the currency fluctuation risk. In other words, you are doing personal hedging of dollars for your child’s education.

Investing in Canada also helps to reduce currency and political risk by diversifying the portfolio.

Investing and saving in Canada may also assist your child in obtaining a student visa to Canada (if you do not want to opt for residency).

For studying in Canada, what are some important things we should know and keep in mind as parents and students?

Ans: These are some of the important points to keep in mind:

Plan early if you wish to send your child to Canada for higher education. Most parents start seeking advice after their children have passed 12^th grade or after they have completed their Bachelor’s degree. This limits their options and choices.
Post-Graduate Diploma (PGD….) is not equivalent to a Master’s degree program. It is a 2 or 3 year program, usually offered after a high school diploma (grade 12). It more or less like a Diploma program in India which can be undertaken after passing grade 10 or 12.

Understand the education system of Canada before applying for any particular program or at any particular education institution.

After study in Canada, employment and residency are not automatic. There is a process to follow.
There are number of other options available in Canada for study and / or settlement.

December 24, 2020

How and Why should Indian HNIs Invest in the USA?

By Ajmera Law Group 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.

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.

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

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:

Opening of foreign currency account abroad with a bank
Purchase of property abroad
Making investments abroad – acquisition and holding shares of both listed and unlisted overseas company or debt instruments
Acquisition of qualification shares of an overseas company for holding the post of Director
Acquisition of shares of a foreign company towards professional services rendered or in lieu of Director’s remuneration
Investment in units of Mutual Funds
Venture Capital Funds
Unrated debt securities
Promissory notes
Setting up Wholly Owned Subsidiaries and Joint Ventures
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.

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.

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.

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.

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.

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.

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 –

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.
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.
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’.
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.
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.

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:

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.
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.
It is always preferable to study in a recognized university and not a college or private institute.
In 2020, parents and students must not assume that studying abroad will guarantee job placement and future immigration.

September 13, 2020

HOW AND WHY SHOULD INDIAN HNIs INVEST GLOBALLY?

By Ajmera Law Group Global Financial Markets, Global Investing How & why?, Headlines

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.

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.

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.

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.

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.

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.

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.

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

There are primarily four options available. They are:

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.
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%.

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.

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!’

1 2 3 Next page

Prashant Ajmera & Associates

Tag Archives: Investment Migration

New Zealand scrutinises to encourage investment immigration

USA clears Path for Foreign Entrepreneurs and Start-ups

Ajmera Law Group publishes first edition of Residency and Citizenship by Investment by asset classes!

Are you looking for a second home in the world!

“Invest in Turkey” – hoardings appear on Srinagar’s main cross road – Media and authorities at a loss regarding this advert

Continuously adapting to new ideas, regulating the market and protecting investors makes the United Kingdom the most favoured investment destination for global investors.

Portugal : From an economic disaster to an economic success in just a decade!

Canada – One of the best countries in the world to study, work, invest, do business or retire!

How and Why should Indian HNIs Invest in the USA?

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

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.

HOW AND WHY SHOULD INDIAN HNIs INVEST GLOBALLY?