Why Indians look out for Second Residency or Citizenship?

With the globalized world that we live in today, the idea of having a second residency or citizenship is becoming increasingly popular. A second residency or citizenship can provide individuals with a number of benefits, including increased economic and political stability, tax benefits, increased mobility, access to quality education and healthcare and personal preference. In today’s blog, we will explore the reasons why people are looking for second residency and citizenship options abroad.

Before moving ahead with why people choose second residency and citizenship, first let’s understand the difference between Residency and Citizenship:

1. Eligibility for a Passport: The major difference between citizenship and permanent residency is the ability to apply for a passport. Permanent residents do not get a passport from the country they are in.
2. Right to Vote and Stand for public office: If you are a citizen of the country you have the full right to vote and can stand for public office elections. Permanent Residents do not enjoy these rights.
3. Citizenship is for a lifetime and the individuals do not have to fulfil any requirements to retain it, Permanent Residents might be denied entry into the country if they have failed to fulfil any residency requirements.
4. There is no residency requirement for Citizens, Permanent Residents are required to live in the country for a specified period of time.

Let’s see some of the stats:

Data from rbi.org.in

The above statistics show that 8,000 HNIs have migrated from India in 2022, being the 3rd highest in the world. Only ahead of India have been Russia and China. Out of 88,000 HNIs who migrated in the year 2022, India accounts for 10% of the total global figure. A major spike has been seen from the year 2016–17 due demonetization of old currency notes in India and again after the Covid-19 pandemic.

For the expected figure of 125,000 for the year 2023–24, the estimated number of Indian HNIs migrating is 12,500.

Reasons why people look out for second residency/citizenship?

1. Political and Economic Stability: One of the main reasons why people look for second residency or citizenship is for the purpose of ensuring a stable future. In many countries, political and economic stability is uncertain, and this can have a major impact on the lives of individuals and their families. By obtaining a second residency or citizenship in a country that is politically and economically stable, individuals can ensure that they have a secure future and can live without the fear of instability.
2. Tax Benefits: Another major reason why people look for second residency or citizenship is for the purpose of taking advantage of tax benefits. Some countries offer attractive tax benefits to individuals who obtain residency or citizenship. For example, some countries have low tax rates, tax exemptions for foreign income, or investment tax incentives. These benefits can be particularly attractive for individuals who are looking to minimize their tax liability.
3. Increased Mobility: A second residency or citizenship can provide individuals with increased travel and work opportunities, especially in countries with visa-free travel agreements. This allows individuals to travel more easily and freely, and to take advantage of job opportunities that might not be available in their home country. Additionally, a second residency or citizenship can make it easier for individuals to live and work in multiple countries.
4. Access to Quality Education and Healthcare: People may look for a second residency or citizenship in a country that provides better educational and healthcare opportunities for themselves or their families. For example, some countries have excellent public education systems or world-renowned universities, while others have state-of-the-art healthcare facilities. By obtaining a second residency or citizenship in a country that provides these benefits, individuals can ensure that they and their families have access to quality education and healthcare.
5. Personal Preference: Some people simply prefer living in another country and desire a second residency or citizenship for the purpose of residing there for extended periods of time. Whether it’s because they enjoy the culture, the people, or simply the way of life, a second residency or citizenship can provide individuals with the opportunity to live in their preferred country.

Getting a thought of having a second residency or citizenship, then you must also think of some of its pros and cons as well. Surely, there are some advantages and disadvantages of second citizenship or residency. Let’s discuss the same in detail.

Advantages: It is important to note that the benefits might differ from the country you choose. But some of the common advantages are:

1. Visa-free travel around the world
2. The person has the rights of citizens of both countries
3. Have a plan “B” in case of some emergency or instability
4. Provide good quality of life, education and healthcare facilities to children
5. Endless business opportunities

While having a second residency or citizenship offers several benefits, it has some disadvantages as well:

1. Cost: Obtaining a second residency or citizenship might be expensive as there are processing fees, application fees and other costs associated with the process
2. Complexity: The process can be very complex and complicated because each country has its own specific requirements which involve background checks, paper works etc.
3. Time: The process of getting a second residency or citizenship can take a significant amount of time as it involves wait times for visa applications, work permits and other approvals as well.
4. Dual Obligations: If you have a dual residency or citizenship, you might be subject to laws and regulations of both countries and it might be complex for you and increase your responsibilities.

There are too many ways to get a second residency or citizenship such as by Ancestry, by Naturalization, by Birth etc. But one of the fastest ways is by Investment. So let’s understand the basics of Residency by Investment and Citizenship by Investment.

Residency by Investment: Residency by Investment Programs, also known as Golden Visa Programs, allow High Net Worth Individuals (HNWIs) to move to another country and work, live, and study in the new country of residence.

The Golden Visa program is a type of residence permit that allows Non-European citizens to obtain long-term residence status within months in exchange for passive investments and low physical requirements in the host country. Countries which offer these programs are:

• US EB-5
• Portugal Golden Visa
• Canada Start-Up Visa
• UK Innovator Visa
• Greece, Spain, Italy, UAE, Australia, New Zealand etc. and there are many more countries which offer you Residency by Investment Program.

Citizenship by Investment: Citizenship by Investment Programs allow families to get a second citizenship, which gives them the freedom to travel freely to various locations across the globe. Some of the countries which offer direct Citizenship by Investments are:

• Antigua and Barbuda
• Grenada
• Malta
• Turkey
• St. Lucia
• St. Kitts and Nevis
• Dominica

In Conclusion, second residency and citizenship are becoming extremely popular options for HNWIs who are looking for the reasons mentioned above. Each individual has their own requirements and specifications for seeking a second residency or citizenship, the advantages and disadvantages are the same. The decision to obtain a second residency or citizenship is a personal choice and one should do all the due diligence and consult the financial advisor before making any decision.

Sumit Singh (sumit@sumit-singh.com) is an Associate Member of Investment Migration Council and Advisor with Arton Capital