Mohammed Asaria explores the rising popularity of Palm Jumeirah, Grenada Citizenship, UAE Residency & DIFC Foundation among non-resident Indians (NRI).
The upheavals in India over the past 12 months – political, health and economic – are convincing many Indians to look abroad for a safer and more peaceful place to live.
Why Investors Are Increasingly Choosing to Make the UAE Home
Positive reforms and regulations attract large numbers of people to stay longer
Traditionally, this meant Great Britain or the United States, but more and more people are finding the solution in the local area, with many opting for Dubai in the United Arab Emirates.
Called “India’s most important hub” by the Reuters news agency, the links between Dubai, the region’s most dynamic city, and India have always been very close. In fact, the Indian rupee was its official currency until 1959. Indians are the largest ethnic group in Dubai and the only city in the United Arab Emirates that has both Hindu temples and a Sikh gurdwara.
“In less than 10 years the UAE has achieved a remarkable change in its regulatory framework,” says Yann Mrazek, managing partner of M / HQ in Dubai. “Both DIFC and ADGM have become the top 25 worldwide [tier1] Financial centers. The UAE is also one of the top 10 most competitive structuring centers in the world as well as the top 10 in the FDI jurisdiction. This makes the UAE one of the five “super jurisdictions” – along with the USA, Great Britain, Hong Kong and Singapore. ”And since Hong Kong looks increasingly volatile, this reduces one of the options.
Yann Mrazek, managing partner of M / HQ in Dubai
Until recently, it was possible to move freely between the two jurisdictions and there was no tax implication if you invested outside of India. But it is time for people to make a choice: you have to stay in India and pay all taxes, or move out and not stay too long when you return for a vacation or a wedding.
Any Indian who moves to Dubai can be assured of a warm welcome and the comforting closeness of their compatriots, but what about the practicalities? The first step is to apply for a residence permit. This is extremely efficient as there are no ethnic barriers or quotas. Either an investment in a property or a company formation is sufficient, and the process is completed within less than two months. And you can bring the whole family with you.
“A property purchase of more than 1 million dirhams entitles you to an investor visa that can be renewed every three years,” says Khalid Abul Huda, Managing Partner of Sanctuary Corporate Services. “Invest at least 5 million dirhams and you can get a five year visa. Alternatively, you can set up a company in a free zone. ”
Indians have traditionally been big buyers of real estate in Dubai, and there has been a significant increase in the number in recent months. There is something for every budget – from apartments, small villas to villas in Emirates Hills, The Palm, Al Barari or even District One.
Indians have traditionally been big buyers of real estate in Dubai, and there has been a noticeable increase in the last few months
“You can buy a nice single family home for $ 1 million – you can also spend $ 35 million – depending on what people want,” said Andrew Cummings, general manager of Luxuryproperty.com. “The process is amazingly simple – you can buy almost immediately, you can transfer within a few weeks. We serve every need – and this is a good time to shop. The market has been at its lowest in years, despite the rebound in recent months, the reality is that prices are still far from where they were. What people forget is that there is a real shortage of supply in the luxury market – all of the large off-plan units are ready, but no new projects are coming into operation. ”
Buying a residential property is just one step. Another is to gain citizenship of another country in order to mitigate extra-territorial (citizenship-based) Indian taxes. One of the most popular, both for its travel, stature, safety and tax benefits, comes from the Caribbean island of Grenada. Range Developments, the leading developer of luxury hotels in the Caribbean, has already successfully built and commissioned the Park Hyatt St. Kitts and the Cabrits Resort Kempinski Dominica and is now building the Six Senses La Sagesse in Grenada. A $ 220,000 investment in the project and the grant of citizenship enables visa-free travel to more than 140 countries including the United Kingdom, the European Union, Russia, China, Singapore and many more.
Andrew Cummings, CEO of Luxuryproperty.com
Investors also have the option of applying for an E-2 visa in the US, something that is unique in Grenada among Caribbean countries that offer post-investment citizenship. Citizenship of Grenada therefore not only offers the broadest global mobility and protection against increasing global fears, but also a quick and inexpensive way to live in the USA. An invaluable asset.
India’s new 2020 Tax Residency Act can make an Indian citizen liable for tax if their total income in India exceeds 1.5 million rupees ($ 20,225). According to Dr. Anup P. Shah, one of India’s leading tax advisors, an Indian citizen living in a tax-exempt country could owe Indian taxes even if they do not enter India. These regulations only apply to Non Resident Indians (NRIs). If you are of Indian origin and live abroad but have a foreign passport, you are not affected by these credit requirements. For example, citizens of Caribbean countries such as Grenada who live in jurisdictions that do not levy income tax are considered outside the scope of these provisions.
Not to scare, but many speculate that India’s migration to citizenship-based taxation will be accompanied by an exit tax – a tax that is payable upon return and surrender of your Indian passport. In fact, we’re not talking about small amounts; in the US, that equates to a net capital gains tax of 23 percent. A definite call to action as long as this tax remains on the drawing board for the Indian tax authorities.
An Indian citizen living in a tax-exempt country could be held liable for Indian taxes even if they do not enter India
As soon as the family is installed in Dubai, they can take advantage of the serious school and health facilities as well as the leisure activities and cultural events.
Finally, it’s important to remember that you need to take the move seriously. In other words, there is no point buying a property in Dubai and continuing to live in Delhi. The tax authorities are watching and taking action.
“Assets located in India are taxable in India, but you can entrust them to a local trust. Same goes for local stocks and dividends. But all assets outside India are no longer subject to Indian tax, ”says Yann Mrazek. “It is important that people plan before they act. Many people act before they plan – there is some risk involved. Other people don’t stick to a disciplined game plan. This is where problems can arise – everything you do can affect everything else. What you can’t do is pretend you’re moving as the tax authorities are paying close attention to this mistake. ”