According to a survey by residence and citizenship planning firm Henley & Partners, ultra-high net worth people from India, the United States, and the United Kingdom accounted for the majority of investment migration queries in 2021.
In 2021, Indians accounted for the biggest number of investment migration enquiries, which increased by 54% year over year.
Wealthy investors get alternate residency or citizenship in return for a significant contribution to the host country through investment migration.
According to figures from the Ministry of External Affairs, over six lakh Indians have given up their citizenship in the previous five years, with 40% of them residing in the United States. The total includes people who obtained a golden visa, which allows them to invest in countries such as Portugal, Malta, or Cyprus in exchange for residency or citizenship.
In 2019, 1,44,017 persons handed up their Indian citizenship, the largest number in the prior five years. The lowest number was 85,248 in 2020, which was most likely due to the Covid-19 pandemic. The highest number of Indians turning up their citizenship was 11,287 in 2021, when global travel and outdoor restrictions began to loosen. Note that data for 2021 is only accessible until September of that year.
According to data from the Global Wealth Migration Review, 2% of India's billionaires have already left the country by 2020. China led the migration list with 16,000 High Net Worth Individuals departures, followed by India with 7,000 and Russia with 5,500.
So, where do India's super rich wish to relocate?
While Portugal is at the top of the list, Malta and Greece are also among the top five nations where Indians desire to relocate.
"While India continues to be an attractive environment for business activity, corporate growth, and high-yielding investments, high-net-worth households are becoming more cosmopolitan and transnational, and they want to diversify a portion of their fortune abroad." Families are seeing investment migration as a way to access global markets, protect their families' futures, and have an insurance policy in place to diversify their domiciles as a hedge in this volatile world," said Nirbhay Handa, Group Head of Business Development at Henley & Partners.
Until a few years ago, India's investment migration market was primarily focused on the US EB-5 programme, but now many European countries, such as Spain, Portugal, and Malta, are increasingly being considered as places to own retirement or vacation homes, conduct business, and enjoy lifestyle benefits.
Since it is the major determinant of any macro stimulation to one's business or wealth preservation endeavours, alternative residence has become a viable wealth management option nowadays.
"To diversify the risk and locate the best value, it is regarded best practise in the financial industry to invest in several areas and asset classes, ranging from equities to real estate. But what about your current location? The premise is the same. The more countries you have access to, the more diversified your assets and possibilities will be, and the less exposed you will be to country risks "Handa contributed to the conversation.
Not only India's wealthy, but also several start-up entrepreneurs are interested in the various residencies available, whether through structured residency investment programmes in Portugal or Malta, or by establishing businesses in countries such as the UAE or through talent-based visas offered by Australia and Singapore.
But why Portugal?
For individuals interested in a structured residency programme, Portugal is the top choice.
The Portugal Golden Residence Permit Program, which requires a minimum real estate investment of EUR 280,000, is one of Europe's most popular residency programmes, granting successful applicants the right to live, work, and study in Portugal as well as visa-free travel throughout the European Schengen area. The chance of seeking for citizenship after five years is also included.
Because of its minimal physical presence requirement, the scheme is viewed as a comparatively easy route to get alternate residence in Portugal (investors are only required to live in Portugal for 7 to 14 days a year). The application approval procedure is also faster, taking only a year on average.
"Investing in real estate in an EU member state is a wise move that many worldwide investors have already taken," Henley & Partners wrote in a research.
However, the restrictions were somewhat changed early this year.
While the minimum amount for real estate investment remains unchanged, purchasing residential property in the coastal cities of Lisbon and Porto, as well as the southernmost region of Algarve, which were once hotspots for real estate investment, is no longer an option due to rising property prices in these popular tourist destinations, as well as a shift in investment to low-density areas of the country.
"In these coastal areas, commercial property investments may still be permitted. We expect historical centres, as well as regions such as Alta de Lisboa, Marvilla, Campanha, Almada, Loures, Vila Nova de Gaia, and Maia, to become more appealing to people interested in applying for PGV through the residential property purchase route "Shilpa Menon, Senior Director India at LCR Capital Partners, shared her thoughts.
Private equity / VC fund pathways through the Portugal Golden Visa, according to LCR Capital Partners, are expected to grow more popular in the future, accounting for a bigger number of applicants.
"The investment amount in private equity/venture capital funds has increased by 50%, from EUR350,000 to EUR500,000. However, smart investors frequently prefer this alternative since it is a regulated, hassle-free, and tax-efficient way to obtain the PGV while also allowing them to receive a high return on their investment at the conclusion of the 5-7 year investment term "Menon stated.
According to data from Strokes and Ground Unipessoal LDA, a real estate developer located in Portugal, despite the law requiring an increase in the minimum investment for VC Funds, the percentage of funds as an asset class has already climbed from 9% in 2021 to 14% in 2022.
What makes Malta so special?
The Malta Permanent Residence Program provides qualifying candidates with a Maltese Residence Permit, which allows them to enter the Schengen Area of Europe without a visa. For mixed capital needs, the minimum contribution is EUR 175,000.
Malta's economy is diverse, including businesses such as information technology, manufacturing, and gaming. In addition, the country offers a good level of life at an accessible price, as well as an English-speaking environment, which is a big lure for foreign inhabitants. Furthermore, the island's strategic location between Europe, North Africa, and the Middle East is particularly appealing to businesspeople.
"Portugal's Golden Visa has long been a popular alternative residence scheme, but Malta's freshly restructured Permanent Residence Program is gaining appeal as well. Families are likely to weigh the pros and cons of both choices before deciding. Malta Permanent Residence has a lower capital need than Portugal's Golden Visa, which makes it more appealing "Handa said.
Other popular alternatives
Within two months of applying for the Greece Golden Visa Program, successful candidates and their families will be able to benefit from visa-free travel across Europe's Schengen Area, as well as subsidised healthcare and public education in Greece. They would have to invest a minimum of EUR 250,000 in real estate.
The EB-5 Visa was introduced by the Immigration Act of 1990 to allow foreign investors and their families (spouses and dependents under the age of 21) to receive a Green Card by making a large investment in the United States. The EB-5 Visa was created to help the US economy by stimulating job creation and capital investment by providing foreign investors with all of the privileges of permanent residency in the US. In Targeted Employment Areas (TEAs), the minimum investment requirement has been raised to 800,000 USD.
For bright individuals, Australia's Global Talent visa is a fast-tracked immigration programme with a shortened path to permanent residency. It was created to help Australia's innovation and tech sectors thrive in order to help the country's economic recovery, resilience, and competitiveness by recruiting dynamic, highly qualified persons to migrate to the country's secure beaches. According to statistics from the Australian Department of Home Affairs, India, along with the United Kingdom and the United States, is one of the top nations demonstrating interest in the Global Talent visa programme.
Successful candidates can acquire fast-tracked permanent residence for their entire family in as little as six weeks, making the programme incredibly desirable and driving demand for real estate. This visa does not involve any investment; just application, processing, and other relevant expenses are necessary.
What are the advantages of a golden visa?
A golden visa gives families global access to new markets and a variety of business, professional, educational, healthcare, tax, and lifestyle prospects for current and future generations.
Many golden visa schemes, such as the Portugal Golden Residency Permit Program, allow successful applicants to apply for citizenship after a few years of residence, such as the Portugal Golden Residence Permit Program, which allows applicants to apply for citizenship after five years.
After seven years in the Greece Golden Visa Program, and ten years in the Italy Residence by Investment Program, investors can seek for citizenship.
"Golden visas allow HNWIs and their families to secure an alternative safe haven, enrich and expand their lifestyle and business opportunities, enjoy a high quality of life and access to excellent infrastructure, access world-class healthcare at leading facilities, and attend first-rate educational institutions, all while hedging against potential risk and volatility," according to Henley and Partners.
With prominent EU countries like as Cyprus, Greece, Malta, and Portugal, the acquisition or lease of real estate is a primary driver and prerequisite of residency by investment schemes. Golden visa schemes tied to real estate provide the added benefit of expanding one's alternatives for migration or retirement (or both).
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