Why do Indian HNWIs are renouncing their Citizenship and looking for alternative options? 

India is a country that has changed more rapidly than most others. Its realities are changing even as the broader international situation changes and evolves.

Why do Indian HNWIs are renouncing their Citizenship and looking for alternative options? 
Why do Indian HNWIs are renouncing their Citizenship and looking for alternative options? 

India is a country that has changed more rapidly than most others. Its realities are changing even as the broader international situation changes and evolves. The trend of people renouncing Indian Citizenship for foreign Citizenship has ballooned recently.

As per the Ministry of External Affairs (MEA) report, over six lakh Indians have given up their Citizenship in the last five years. Besides this, in the recent session of the Lok Sabha on Tuesday, December 13, 2022, Trinamool Congress Lok Sabha MP Mahua Moitra also outlined the data, which stated that almost 2,00,000 people — 1,83,741 people —renounced their Indian Citizenship in the first ten months of 2022.

She asserted that this exodus in 2022 takes the total number of Indians relinquishing Indian Citizenship under the PM Narendra Modi-led government in the past nine years, since 2014, to over 12.5 lakh people. Mahua cited that this year has seen more people giving Indian Citizenship than any single year.

She stated that even high net-worth individuals are willing to pay up to million dollars to get Citizenship in other countries. 

Along with that, over 1.6 lakh Indians relinquished their Citizenship in 2021, the highest in the past five years, according to the official data. The numbers marked a steep increase in comparison to the 85,256 people who gave up their Indian Citizenship during the year of the COVID-19 pandemic in 2020 and a somewhat smaller increment over the 1.44 lakh who gave up their passports in 2019.

Moreover, statistics from the Global Wealth Migration Review outlined that 2 percent of millionaires belonging to India already flocked overseas in 2020. India has secured the second spot in the migration list showing that 7,000 High-Net Worth Individuals exited the country, while China topped the list with 16,000 exists.

A secure and stable life is the demand of every individual on the earth, which makes them choose critical options and new opportunities. To mitigate the uncertainty of life, the preparation of plan B becomes the first agenda for people, especially for High-Net-Worth Individuals. 

The entire scenario evidently pointed out that the Indians or HNWIs also seek new opportunities and, most significantly, alternative options (specifically Plan B) to protect their wealth and future. HNWIs always wanted the diversification of their portfolio globally, higher opportunities for their business, a favourable tax regime, a chance to enhance their business globally and efficient wealth planning. Their demands make them leave their Indian Citizenship and look out for Plan B.

Various data and official reports highlighted that Indians are leaving their Indian Citizenship in order to take residency in other countries as India does not offer dual Citizenship, so people seeking Citizenship in other countries must give up their Indian passports as per law. So, taking Citizenship or residency in other countries in return for monetary investments emerged as the Plan B for the Indian HNWIs.

Not only this, but the Indian government also passed the Finance Bill 2021 during the Union Budget last year, which laid out three amendments to its tax regime. The bill hampered the smooth processing of Indian passport holders in running their businesses in the countries such as the Qatar and the United Arab Emirates, which are tax-free jurisdictions. The individuals may face the possibility of taxation on the earnings they accumulate overseas, exactly as the citizens of the US are facing.

The amendments will directly impact Indian passport holders running their successful businesses in the countries like the United Arab Emirates on “residency visas”. On their previously tax-free income, these businessmen will now be taxed in India despite being in a tax-free jurisdiction.

The United Arab Emirates and its golden visa have always remained alternative options for the Indian HNWIs for running their business and protecting their wealth due to their favourable tax regime, but the policies of the Indian government forced them to look for a way out. Now, people are eagerly looking for alternative options and a Plan B to secure their global wealth.

Along with that, reports highlighted that India has also decided to follow the norms adopted by the United States of America regarding the surrendering of passports.

Like the US, India could also adopt the procedures under which the investors will have to disclose their global businesses and properties while renouncing their Citizenship. They will also have to file the final tax return for the year of the renunciation, which is named a “dual return”, as per the Federal Law of the United States. 

In order to escape hefty taxes and Citizenship procedures, Individuals with Indian passports seek out new opportunities and, most significantly, an insurance policy to get a stable and secure future. Indians are eyeing the Caribbean region, which offers the most sought-after Citizenship by Investment Programmes as it is home to the world’s topmost programmes. Most notably, the Citizenship by Investment Programmes of Dominica, which is ranked as the world’s best in the CBI Index 2022 published by PWM Magazine of Financial Times.

Due to its benefits of a lifetime, such as the chance to become global citizens, open doors to numerous business opportunities, portfolio diversification and wealth planning, the CBI Programme of Dominica has now emerged as the perfect platform for investment. The endless benefits of the Citizenship by Investment Programme of Dominica have lured the HNWIs of India. In a world full of chaos, the programme has emerged as an insurance policy for the HNWIs with an assurance of a secure and stable life.

Besides these benefits, the alternative Citizenship of Dominica provides the opportunity to set up a business in a favourable tax regime after hedging against increased taxes. The Caribbean nation has become a great option for Indian investors looking to set up their businesses in a favourable tax regime and safe political environment.

The long-standing programme of Dominica grants Citizenship to applicants investing in either Government-approved real estate projects or making a contribution to a Government fund. Moreover, Dominica scored 61.07 in the Global Rankings of “Ease of Doing Business”, making it one of the most efficient business hubs in the region.

Investors choose Dominica to enhance their business beyond the national boundaries of their birth as it opens doors to a wide range of international opportunities. It also provides the chance to travel to many countries offering visa-free access to the citizens of the country. This has also assisted many Indian or investors from other countries to finally travel freely – whether for business or leisure.

Moreover, the low tax rates, family reunification, quality of life, top-notch health and education, domestic well-being, and economic and business opportunities are such significant benefits that HNWIs from India are looking to lead a stable life.