India is currently not positioned to become a world residency centre like Dubai is, and the figures support this. Dubai’s model has been derived from quantifiable motivators: any investor applying for the UAE Golden Visa can get a renewable 10 year residency for an investment starting at AED 2 million (about ₹4.5–5 crores) to qualify. Also, it is very quick to do this—usually within 5–10 days—and there’s no need for an employer to sponsor you in the process— importantly, the UAE has no overseas personal tax—this being a key component to the global migration of wealth. The numbers show the results. Each year it is expected that the UAE will have approximately 6,700 new millionaires who have moved there, one of the highest net inflows around the world. Therefore, the Indian investor is making huge sums of money, to the tune of between Dh35 and Dh40 billion (equating to ₹75,000 and ₹90,000 crores) on a yearly basis into property in Dubai, and this is primarily due to residency-linked incentives.

In the same year, approximately 4,300 Indian millionaires were expected to leave India; many of them to Dubai. This is what the residency hub looks like in practice, as the example goes: Policy → Capital Inflow → Population Shift. India does not have any of these numbers—because there is no policy trigger. There is no defined amount of investment that can provide residency through capital investment. There is also no way to guarantee at least a 5–10 year visa through the ownership of assets.

Furthermore, there is no tax differential, as India taxes both overseas income and capital gains as well as property income; whereas Dubai has expressly removed these types of impediments. Even looking at the structure of both countries reveals a large difference. Residency in Dubai is classified by multiple categories (investors, entrepreneurs, scientists and highly skilled workers), with each category having a distinct set of eligibility, including family sponsorship and no requirement to stay for a minimum amount of time.

In comparison, India does not have a similar programme; the Overseas Citizen of India Programme (OCI) is not based on any economic criteria, and the OCI does not allow for foreign investment. Consequently, there has been a flight of capital rather than a flow of capital to India from other countries under this category. India needs to create a financial climate where investors are willing to invest ₹5 crore  from outside of India because doing so will result in them receiving a residency status which might bring India parallel to being competitive with other nations in this domain.

Additionally, the gap in competitiveness is apparent in Dubai’s residency policy. Dubai has created residency as a policy product with clear pricing (i.e., ₹4-₹5 crore), fixed terms (10 years), and measurable benefits (e.g., no tax, ease of mobility, ease of doing business). India on the other hand does not provide any of these elements in a complete package. Thus, potential investors are uncertain in the guidelines in this domain, longer waiting periods for approvals, and a total lack of standardisation when applying for a residency visa. If India is to become competitive in this marketplace, it needs to provide different numbers. A viable model for India would be: A defined level of investment to obtain a visa (e.g., $500,000 to $1 million). Guaranteed renewal of residency (10 years).

Tax incentives/exemptions for overseas income. Fast-tracking of application (weeks rather than months). By brining in such guidelines , it will become possible for India to achieve the kinds of scales being created in Dubai, i.e., thousands of millionaires moving to Dubai and tens of billions of dollars being moved into Dubai annually due to residency. In conclusion, the answer is simple: Dubai chooses to quantify residency, while India can now be a new destination for individual investors. Until then, India will remain a large market with a large population but, with a potential to offer a similar opportunity to become a sought after destination for global residency.

Prof. Neeraj A Sharma, Honorary Consul General, Republic of Palau to India.

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