Abhinav Lohia / TOI / February 26, 2023, 3:57 PM IST
Residency by Investment Programs such as EB5 Visa Program of the United States is becoming increasingly popular among Indians looking to establish a new base for themselves or their families in another country. They allow foreign nationals to obtain residency or citizenship in a foreign country by investing in its economy or real estate market. For many it is a pathway to a new life in a foreign country which may provide better opportunities for education, healthcare, and employment.
According to recent data by the Ministry of External Affairs, approximately 1,83,741 Indian passport holders renounced their citizenship from January to October 2022. This indicates that these Indians secured citizenship in other countries during this period. The growing popularity of residency or citizenship by investment programs, otherwise popularly known as Golden Visa programs, can be attributed to several factors. Firstly, competition in the Indian job market. Education is a priority in Indian families regardless of the strata of society they belong to. This combined with the largest population in the World creates an unemployment problem for pre-dominantly young and talented population. Many talented people find it hard to find a job or if they do find a job, the compensation doesn’t meet their expectations. On the flipside many western countries have an aging population and are facing a talent gap. Many Indians who can afford to pursue education overseas and find a job in western countries are able to get high salaries compared to India.
Secondly, since the FDI revolution of 1990 and globalization of economy a lot of wealth has been created in India. As a result, a large segment of society can afford international education for their children. This coupled with exposure to different cultures because of the internet has made it easier for children to settle in a foreign country. Once exposed to the lifestyle in a developed country, many children choose to live there.
Third, despite the means to study and live in another country, many applicants are faced with visa restrictions of foreign countries, such as H1B Visa in the United States. Every year there is a limited quota of 85,000 H1B visas and more than 3,00,000 applicants apply for it. As a result, approximately 70% of the applicants are forced to leave the United States after completing their education and finding an employer to sponsor their work permit. For those who can afford to invest $800,000 or approximately INR 6.5 Crore, EB5 Visa has become a preferred route to remain in the United States. Funds in EB5 visa investment are typically locked in for a period of 5 years, however a green card can be issued in less than 3 years allowing applicants to join the U.S. workforce before they even graduate from a U.S. college. Additionally the new laws enacted in March 2022, include provisions for granting work authorization to applicants who are in the United States till a green card is issued under the EB5 Visa Program.
Fourth, Covid-19 pandemic created a need amongst many to have access to health care in multiple countries. Many people lost their loved ones due to an overburdened health care system and breakdown in medical supply chain during the Covid-19 pandemic. Many parents sent their children to the United States on F1 Student Visa so that they could be vaccinated against Covid. Many families booked chartered flights to UAE and other countries to access medical care they needed during the pandemic. Once the dust settled from the pandemic, many families explored residency or citizenship by investment options do diversify their health care risk.
While many Indians want access to other countries for education, profession, business or health care, they don’t necessarily want to give up their Indian Passport. Unfortunately, India does not allow dual citizenship, forcing many to give up their Indian passport if they decide to live long term in other countries. To get a holistic view of the intent of Indians giving up their passport, we should also consider the number of Indians applying for an Overseas Citizen of India or OCI card to stay connected with India. Further, it may appear that there is a drain of wealth from India because of Residency or Citizenship by Investment Programs, per recent RBI data India is also the beneficiary of highest ever inward remittance from foreign countries amounting to $89,127 million in FY 2021-22.
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