“I could see it becoming a problem for someone who had businesses spread across the world, With a foreign passport, the red-tape has reduced substantially. I am less worried about being slapped with a random tax demand.” An Indian who fled away to Dubai for greener pastures explains his anger on the high taxes.
The Indian government has tightened its eye around the business owners in the recent years. The government argues that it wants to improve tax compliance.
This has become the major reason why business people relocate from Indian.
According to Global wealth migration review report 2% of millionaires left the country in 2020. many citizens in that bracket of millions renounced their resident status .
COVID-19
Covid 19 has geared the ongoing trend of wealthy Indians seeking to globalize their lives and assets.
By the introduction of lockdown in the last year of invasion of covid 19 ,having an office in India was to cater the growing demand .
“I think they [clients] are realizing they don’t want to wait for the second or third wave of the pandemic. They want to have their papers now that they are sitting at home. We refer to this as the insurance policy or Plan B,” Dominic Volek, Group Head of Private at Henley & Partners told the BBC on a video call from Dubai.
According to Mr Volek, the pandemic could be a game changer, because it is making the wealthy think about migration in a more holistic fashion.
It is no longer just about visa-free travel, or ease of access to global markets, but about wealth diversification, better healthcare and education, to protect against the uncertainties brought about by the pandemic.
Countries like Portugal, which runs a ‘golden visa’ programme as well as countries like Malta and Cyprus are preferred destinations for India’s well heeled, according to H&P.
Setbacks of Wealth Exodus
This exodus of big money is not necessarily permanent in nature – people merely invest money in another country as a fall-back option rather than take out all their money from their home country and cut business ties. But it doesn’t bode well for a developing nation like India, say experts.
“When this happens, they remove themselves, their entrepreneurial ability and their income and wealth from the tax base. This is likely to be detrimental in the long run. Their exit sends a poor signal about the ‘doing business climate’ in India,” says Rupa Subramanya, Distinguished Fellow at the Asia Pacific Foundation of Canada.
It can be a sign of bad things to come as high-net-worth individuals are often the first people to leave – they have the means to leave unlike middle-class citizens.”
