India’s love affair with investment immigration is unlikely to end soon. The country is set to lose more than 6,500 millionaires in 2023.
Citizenship by investment programs like Malta and golden visa programs like the US EB-5 and Portugal or Greek golden visa are the preferred exit routes for Indian High Net-Worth Individuals.
But India is far behind China, which tops the list and is expected to lose around 13,500 HNWIs. The UK is placed third with exit of around 3,200 HNIs. Russia is ranked fourth although it is expected to lose just 3,000 HNIs as compared to the 8,000 HNIs it lost in 2022 due to the Ukraine war.
India’s number is lower than the 7,500 millionaires it lost in 2022 in a country that has significant potential to generate new millionaires.
A recent Knight Frank India report find that India, as of 2022, has around 800,000 HNIs with net asset value in excess of $1 million. And projections indicate that India’s HNI population is expected to jump 80 percent by 2031.
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India’s HNI population growth is expected to be fueled by thriving sectors like financial services, healthcare, and technology. Further, forecasts indicate a steady rise in the return of affluent Indians as the country experiences improvements in standard of living.
Access to better education for their children and access to quality healthcare for the entire family are two primary factors contributing to the exit of millionaires from India.
The $1.05 million investment for the EB-5 visa is an attractive proposition for an Indian millionaire if it helps his or her child study, work, and live in the US without any visa restrictions.
Similarly, a €250,000 investment in the Greek golden visa is worth it if it helps the family access quality healthcare and a high standard of living across the EU.
Prohibitive Tax Regime
India’s prohibitive tax regime is another factor that is compelling HNIs to explore options abroad. India has complex rules related to outbound remittances with wide discretionary powers in the hands of government officials. Another factor that may be contributing to the outflow is India’s opposition to cryptocurrencies.
The combination of these reasons has led to more and more wealthy Indians choosing to have a backup option in hand in the form of a golden visa.
Preferred destinations for Indians include the US, Australia, the UAE, Singapore, and Switzerland. All those countries, barring Switzerland, have a formal permanent residence by investment program.
One way India can reverse or reduce the outflow of HNIs is to revamp its investment immigration program and make it more attractive to foreign HNIs. Nine out of the top-ten countries with higher inflow of HNIs as compared to exits have a formal citizenship or permanent residence by investment program.