Second citizenship is Plan B for most wealthy Indians, says adviser
From P 1
Often, it is about having a plan B. About 80-90% of our clients don’t leave home, but have a second citizenship or residence in readiness. You only have to spend seven days a year if you get the golden visa to Portugal,” Volek explained. As India does not allow dual citizenship, many Indians opt for residence-by-investment schemes.
“People want access to the EU single market. They want to send their kids to school in another country, or have somewhere safe to park their money. They employ all kinds of methods to protect their wealth,” said Knightsbridge Capital Partners director Luke Hexter.
According to Global Wealth Migration Review, 7,000 highnet-worth Indians left the country in 2017. While America, Canada and Australia are the most preferred destinations, there are 30-40 other countries that open more doors than an Indian passport. “An Indian passport does not rank highly in terms of mobility,” said Volek.
“Portugal, Greece and Malta are very popular as you get the Schengen visa without needing a second passport.” Choksi’s move has created awareness about these options. Lawyers and tax advisers in India recommend rich clients to global companies that advise on where and how to settle.
Reaz Jafri, CEO of Withers Global Advisors, has seen more enquiries from Indians in the past year than in the previous five years combined. Indian clients “are trying to deal with the same personal, financial, political and commercial risks” as other wealthy clients, he said. “In the old days, you would hide your assets, but there is no place to do that now. It’s about moving to a jurisdiction that offers benefits and flexibility, where there is stable law and order, and a good financial system.”
A second passport or residence is also a hedge against the risk of politically-motivated tax prosecution, said Jafri. “Sometimes potential violations of tax laws are used as a tool to go after certain people, and it is very politically motivated, and less than transparent, so they feel vulnerable,” he said. Jafri added that “These tend to be forward-thinking individuals who are hedging against unforeseen risks and are mindful of their friends being investigated.”
All firms TOI spoke to claimed they recommend clients only after stringent background checks. “It would be virtually impossible to help them, from a risk and compliance point of view, if investigations are pending against them,” Jafri said.
Can clients lose their new citizenship if they get embroiled in a case later on? “Chances of the new citizenship being revoked are very slim. It would have to be proved they misrepresented facts at the time of application,” said Jafri.