Don’t Overstay! Your Visa!!!
Foreign Nationals Staying in
India
Illegally
A Report by UHRF
UNITED HUMAN RIGHT FEDERATION
UNITED HUMAN RIGHTS FEDERATION(UHRF) UHRF is a society registered in India under the provisions of Societies Registration Act, 1860. It is a non-political and non-sectarian national organization devoted to promote, strengthen and preserve democratic bereft of favoritism, nepotism and corruption in the country and to protect rights, interested and dignity of common man. It is an organization of international ramifications and working in different fields all over the world. UHRF with the help of experts, volunteers and in association with several agencies is closely observing the affairs and activities of various countries in the field of polities, economy, foreign, business, and also safety & security measures ensured by the respective governments to its citizen. We Make efforts to provide solution to the problem by appraising the cause and extending help to the people. UHRF also keeps a close watch and check on the financial frauds, money laundering and scams committed by big groups and organization. The UHRF has been able to unearth various frauds, scams & irregularities of corporate and individuals. On these irregularities and frauds of corporate & Companies, UHRF has already filed Public Interest Litigations (PIL) before the Hon'ble Supreme Court of India.
Vision: The vision of UHRF is to form fearless and non-succumbing society on the basis of truthfulness & non-violence. This society believes in peaceful co-existence of physically challenged, schedule castes and tribes, people below poverty line, oldaged, widow & deserted women and down trodden people, irrespective of their caste, creed, sex and religion. UHRF visualizes a society of human rights followers.
Objectives: To be one of the prime organizations of the world ensuring basic human rights and encouraging human rights activities. To organize and process UHRF is working by opening up different cell viz. Human Rights Help line, Family Discipline, Advisory Centers, Public Justice Legal Aid Centers, Crime Prevention Team, Information Gain Centers, National and International Committees, Accident Relief Centers, Scheduled Castes and Scheduled Tribes Help Centers, Women and Labor Welfare Centers, Medical Legal Relief Centers for helpless, Consumer Grievance Cell, Inquiry Committees, Centers for Government's project etc. To create awareness among the masses to voice their complaints/ grievances to and fight against injustice. To bring under the banner of human rights, all the likeminded people of the world. The organization appeals international community to join UHRF, its philanthropic missions and contribute some of their valuable time for the cause of human rights. UHRF paves way for a risk-free, threat –free society coupled with equality for once and all.
UNITED HUMAN RIGHTS FEDERATION UHRF believes that the terrorist groups all over the world are encouraging and intimidating people to abandon their families and join the terrorist organizations. These outfits pretends a family-like roles and relationships and focuses a great amount of peer pressure on its members, compelling them to do acts of terrorism. In some instances, terrorist groups targets specific types of people having characteristics of making them receptive to their ideas. For example, some may look for university students who are close to dropping out and are disgruntled over their efforts to political or societal change. UHRF has done intensive studies on 'terrorism' to ascertain as to why a person become a terrorist and how can the society bring him back in mainstream. UHRF works for the children and strongly believe that all children have the right to grow up like a flower. The society must provide an environment that protects children from violence, exploitation, abuse and neglect. They must be protected from any sort of sexual abuse. UHRF sponsored article on Child Abuse 'Save Me from Bad Uncle' is appreciated globally. One can learn how to keep our children safe by going through this article. Ever since the beginning of civilization, war and violence have been inescapably woven with the long continuing journey of human race which has been the continuous yearning for peace and security. With 'Peace in Pieces' movement, UHRF is trying to bring peace all over the world. UHRF is Managing and Publishing two valuable magazines, dedicated to the humanity - 'RadiationToday' and 'Maanvita'. Radiation Today is about impact of radiation on our everyday life while Maanvita is all about good governance & advancement of human rights.
Foreign Nationals and Indian Law Globalisation has meant increasing interchange of not only goods and services, but also of persons who provide these. With the Indian economy growing in leaps and bounds and Foreign Direct Investment pouring in, it is inevitable that the number of foreign nationals visiting and staying on in India for business purposes has also witnessed a commensurate increase. Under Indian law, the legal rights of and the restrictions imposed on foreign nationals depend on whether they are categorised as residents or non-residents. Under the Indian foreign exchange regulations, a person is said to be 'Resident in India', if he/she has stayed in India for a period of more than 182 days during the course of the previous ďŹ nancial year for the purpose of taking up employment in India or for carrying on in India any business or vocation or for a course of study or for any other purpose which indicates an intention to stay on for an uncertain period of time. Thus, a foreign national may be a resident in India in the above circumstances. Under this deďŹ nition foreign tourists in India would naturally be excluded. Indian law also recognises a distinct category called Persons of Indian Origin (P I O) and extends certain privileges to them. Given the obvious constraints of space in an article of this nature, we have highlighted only the essential features of the legal regime applicable to foreign nationals resident in India. This includes practical aspects like operation of bank accounts, retention and remittance of salary/proďŹ ts, acquisition of immoveable property and overseas insurance payments
General Entry Requirements Entry into India generally requires a valid visa granted by an Indian Mission abroad. Furthermore, foreigners who enter India are required to register themselves with the Foreign Regional Registration OďŹƒce (FRRO), if they intend to reside in India for a consecutive period of more than 180 days. Various kinds of visas are available, depending on the purpose of the visit. To take an example, tourist visas are typically non-extendable and are usually granted for a maximum period of six months. The duration of the validity of the visa may, however, vary depending on the country where it is issued. Thus, a ten-year tourist visa is available to US citizens under a bilateral agreement. Visas granted for business or employment in India are typically of a longer duration and are extendable within India. The duration of the visa may depend on the duration of the employment contract or the business and sometimes, also on the place of issuance of the visa. For instance, the Indian embassy in Washington may issue a business visa valid for ten years with multiple entries, which is available to foreign businessmen who have set up or intend to set up joint ventures in India. Foreign citizens wishing to pursue further studies in India can get a student visa for a maximum period of ďŹ ve years though it is usually granted for the duration of the course of study. Visas are also available for persons who are attending seminars and conferences and for journalists on assignment in India. It is pertinent to note that change of purpose of the visit is not permissible, and therefore, it is very important to select the right kind of visa before entering the country. In case a person intends to change the purpose of visit to India, he/she would require a fresh visa from the Indian Mission, which issued the original visa. The Indian Government has recently announced a scheme for PIOs. A PIO is a person who at any time held an Indian passport, or who was born, permanently resided in or whose parents, grand parents or great grandparents were born and permanently resided in India. Spouses of such persons are also considered to be PIOs. Under this scheme, the holder of a PIO card (valid for 20 years) can enter and exit India without a visa. A number of foreign nationals (such as the Managing Editor of Diplomatist Magazine) who are PIOs are likely to beneďŹ t from this scheme.
Travel Requirements for U.S. Citizens In light of recent changes in India’s entry and exit requirements, we would like to bring some important travel information to your attention. We hope this information is helpful to you as you plan your next trip to India. The U.S. State Department reports that in the last few years there have been changes to India’s immigration policies that have not been advertised well or consistently enforced. It is wise to check with your regional consulate and the Indian Government Ministry of Home Affairs website before your departure for the most uptodate travel requirements. Can a person have dual citizenship with the United States and India? No. India does not recognize dual citizenship. In 2006, however, India launched the Overseas Citizens of India (OCI) program, which extends to qualifying individuals limited travel and residency privileges. It is one of many types of travel visas offered by the Indian Government. If a person have his old Indian passport. Should He bring it with him when he travel to India? No. If he previously held Indian citizenship and have since become a U.S. citizen, his Indian passport is no longer valid and will not be accepted by customs agents. If Indian immigration authorities find persons of Indian origin entering India in possession of non‐cancelled Indian passports, they will seize such passports.
Can anyone apply for any visa I might need after I arrive in India? No. It is important to obtain the appropriate travel visa prior to arriving in India, as U.S. citizens cannot obtain one after arrival. To be safe, carry photocopies of the bio‐data page of your U.S. passport as well as the pages containing the Indian visa and immigration stamps in the event that your passport is lost or stolen.
Citizenship and Permanent Residence in India Permanent Residency There are two options for permanent residency. Ÿ
OCI (Overseas Citizen of India) Card
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PIO (Persons of Indian Origin)
OCI (Overseas Citizen of India) Card The OCI affords many of the rights of an Indian citizen. As India does not permit dual citizenship, this card is for those who may have given up their Indian citizenship but want to retain links to the country. It essentially provides a lifelong visa allowing multiple entry to India for any purpose. Those in possession of an OCI card are exempt from registering their stay in India. An OCI card holder can apply for Indian citizenship provided they have been registered as OCI for at least five years, and have lived in India for one of the five years prior to application. This card is specifically for citizens of another country (excluding Pakistan and Bangladesh) who were either eligible to become a citizen of India on 26 January 1950 or have been a citizen on, or at any time after, 26 January 1950. Those who belonged to a territory that became part of India after 15 August 1947 also qualify. The children and grandchildren of those mentioned are also eligible. An applicant for OCI must be a citizen of a country that permits dual citizenship. Ÿ
Full information about the OCI card is available on the Indian Government Ministry of Home Affairs web page. An application can be made online:
PIO (Persons of Indian Origin) This is for all those of Indian origin who are holders of a passport of another country. Exclusions to this are Pakistan, Bangladesh, Afghanistan, Nepal, Bhutan, China and Sri Lanka. The PIO card is valid for 15 years and allows holders to enter India without a visa including for studies and employment. Registration at the Foreign Registration Office (FRO) is not required for single periods of stay under 180 days. Eligibility for a PIO card is for those who have at any time held an Indian passport or who have parents, grandparents, or great grandparents who were born, or have been a permanent resident, in India. Eligibility also extends to those who are married to a person of Indian origin as outlined above or married to a citizen of India. Details of how to apply for a PIO can be found on the Indian Embassy website of the applicant's country of residence.
Difference Between PIO and OCI Card I remember the first time I heard about a PIO Card, I was travelling to India and was waiting on my visa. My very blond hair and blue-eyed friend told me I should get a PIO Card. After some research and conversations with my husband, I too became a PIO Card holder. Investment Yogi gives an overview of the advantages and disadvantages of PIO/OCI status and the new Government proposed merger of the two. NRI, PIO and OCI It is important to know what each abbreviation stands for. An NRI (Non-Resident Indian) is an Indian citizen who is ordinarily residing outside India and holds an Indian Passport. As to where a PIO (Person of Indian Origin) /OCI (Overseas Citizen of India) card holders are people whose ancestors were of Indian Nationality and who is presently holding another countries' citizenship/nationality (i.e. he/she is holding foreign passport). In respect of facilities available in economic, financial and educational field, PIO/OCI is considered the equivalent of an NRI. Although PIO and OCI cards have the same description and are similar in nature, they do each have distinct differences. Let's take a closer look: PIO vs. OCI A PIO (Person of Indian Origin) card allows for visa-free travel to and from India. However, a PIO card is only valid for 15 years. Also, if your stay in India is going to exceed 180 days on any single visit you will need to register within 30 days of the expiry of 180 days with the concerned Foreigners Regional Registration Officer/Foreigners Registration Officer or local Police Authorities. Unlike a PIO, an OCI card has lifelong visa-free travel and does not require the holder to register with any office regardless of the length of their stay. Eligibility for PIO/OCI A person is eligible for a PIO/OCI Card if they at any time held an Indian Passport or either of his/her parents, grandparents or great grandparents was born in and are/were permanent residents' in India as defined in the Government of India Act, 1935 and other territories that became part of India thereafter provided neither was at any time a citizen of Bangladesh, Pakistan, Sri Lanka or other countries which may be specified by the Central Government from time to time. The difference between OCI and PIO eligibility is: The PIO scheme is broad-based and includes up to four generations and also the foreign spouse of a citizen of India or a PIO/OCI card holder. OCI states that the spouse of the eligible person can apply for OCI only if they are eligible in their own capacity. Foreign Nationals, who are not eligible for an OCI, but married to someone who is eligible for an OCI, still cannot be granted an OCI.
PIO Card Person of Indian Origin Card A PIO (Person of Indian Origin) Card allows visa free travel and gives several benefits to the card holder. The Government of India has a comprehensive Scheme for Persons of Indian Origin called the "PIO Card Scheme". Under this scheme, Persons of Indian Origin up to the fourth generation (great grandparents) settled throughout the world, except for Afghanistan, Bangladesh, Bhutan, China, Iran, Nepal, Pakistan or Sri Lanka would be eligible. Citizens of Iran of Indian origin can be considered for grant of PIO card. However, before issuing PIO card to such persons, The Missions or other agency authorized to issue PIO card would obtain prior clearance from the Ministry of Home Affairs. The PIO Card will be valid only when accompanied with a valid passport. A PIO card shall be valid for life time subject to the validity of the foreign passport. In other words, the passport must be valid in order for the PIO card to be considered valid. It used to be valid for 15 years. However, Government of India announced that effective September 30, 2014, all prior and future PIO cards would be valid lifelong. A PIO Card issued earlier as per the PIO Card Scheme (1999) for U.S. $1,000/will continue to remain valid and no refund shall be admissible.
Eligibility A "Person of Indian Origin" means a foreign citizen not being a citizen of Bangladesh, Pakistan or other countries as may be specified by the Central Government from time to time if; I II.
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he/she at any time held a Indian passport; or he/she or either of his/her parents or grandparents or great grandparents was born in and was a permanent resident in India as defined in the Government of India Act, 1935 and other territories that became part of India thereafter provided neither was at any time citizens of any of the aforesaid countries (as referred above) ; or he/she is a spouse of a citizen of India or a person of Indian origin covered under (i) or (ii) above.
Exceptions: Persons who were citizens of certain specified countries; or whose spouse; or either of whose parents, grandparents, greatgrandparents were citizens at any time of these specified countries may render an applicant ineligible for a PIO card even though he/she may otherwise be eligible. The grounds of ineligibility can be established only after receipt of application. It will not be possible to respond to queries regarding grounds of ineligibility before receiving the application.
PIO/OCI Finances in India As a PIO/OCI card holder you can hold a rupee bank account and lend in rupees to Indian residents. As far as investments go, you need to be careful. Holding mutual funds and ETFs can be a cause of headache due to US tax implications for holding non USA-Based mutual funds and ETFs. These are considered to be “Passive Foreign Investments” and involve special rules. All NRI/PIO/OCIs need to submit an FBAR if they are holding $10,000 or more, (this includes all accounts summed together), if they have accounts outside the USA. PIO/OCI Taxation in India PIO/OCI card holders who are not residents of India are liable to pay taxes in India only for income earned in India and do not have to declare or pay taxes for income earned abroad. You can read, How do I determine my Residential Status?, to determine your residential status. In Conclusion With all that said, in January, 2011, the PM of India, Manmohan Singh, announced that the government will be merging the PIO and OCI cards. What benefits or drawbacks that holds is still unclear. Rumour has it that the program/process will be to convert PIO holders to OCI status and abolish PIO all together. PM Singh stated that under this new act, NRIs will have voting rights. But again, it is still unclear and no official breakdown has been reported. One thing I will say, if you have wanted to get a PIO or OCI card, now is the time to do it. Complete details Despite all the news coverage and excitement over this issue, please understand clearly that the Constitution of India does NOT allow dual citizenship, i.e., holding Indian citizenship and citizenship of a foreign country simultaneously. Government of India decided to grant Overseas Citizenship of India (OCI) which most people mistakenly refer as 'dual citizenship'. Persons of Indian Origin (PIOs) of certain category who migrated from India and acquired citizenship of a foreign country other than Pakistan and Bangladesh, are eligible for grant of OCI as long as their home countries allow dual citizenship in some form or the other under their local laws. If you get OCI, it is NOT same as being regular Indian citizen: Ÿ
You do not get Indian passport.
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No voting rights.
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Can not be candidate for Lok Sabha/Rajya Sabha/Legislative Assembly/Council
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Can not hold constitutional posts such as President, Vice President, Judge of Supreme Court/High Court etc.
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Cannot normally hold employment in the Government.
As OCI, you get following benefits: Ÿ
Multiple entry, multi-purpose life long visa to visit India;
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Exemption from reporting to Police authorities for any length of stay in India; and
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Parity with NRIs in financial, economic and educational fields except in the acquisition of agricultural or plantation properties.
Any further benefits to OCIs will be notified by the Ministry of Overseas Indian Affairs (MOIA) under section 7B(1) of the Citizenship Act, 1955. A person registered as OCI is eligible to apply by the Ministry of citizenship under section 5(1)(g) of the Citizenship Act, 1955 if he/she is registered as OCI for five years and has been residing in India for one year out of the five years before making the application. However, such person would have to renounce foreign citizenship. OCI scheme is being operational from Dec 2, 2005. It has been decided that formal launching of scheme will be done by Prime Minister at Pravasi Bharatiya Divas on Jan 7, 2006 at Hyderabad by symbolically handing over the first OCI certificate to a person of Indian origin. It is anticipated that a large number of Indian Diaspora will be benefited by this scheme for a hassle free travel to their motherland. They will bring economic value and benefits to Indian economy and contribute to the development process. PIO vs. OCI Compared to PIO card, OCI offers following benefits: Ÿ
OCI is entitled to life long visa free travel to India whereas for PIO cardholder, it is for 15 years.
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PIO cardholder is required to register with local Police authority for stay exceeding 180 days in India on any single visit whereas OCI is exempted from registration with Police authority for any length of stay in India.
OCI Overseas Citizenship of India Overview Despite all the news coverage and excitement over this issue, please understand that the Constitution of India DOES NOT allow dual citizenship, i.e., simultaneously holding Indian citizenship and citizenship of a foreign country. The Government of India has decided to grant Overseas Citizenship of India (OCI), which most people mistakenly refer to as 'dual citizenship.' Persons of Indian Origin (PIO) of certain categories who migrated from India and acquired citizenship of a foreign country, other than Pakistan and Bangladesh, are eligible to be granted an OCI as long as their home countries allow dual citizenship in some form or the other under their local laws. If you get an OCI, it is NOT the same as being a regular Indian citizen: Ÿ You do not get an Indian passport. There is no such thing as an OCI passport. Ÿ You have no voting rights. Ÿ You cannot be a candidate for Lok Sabha/Rajya Sabha/Legislative Assembly/Council or a member of the House of the People or of the Council of States. Ÿ You cannot hold constitutional posts such as President, Vice President, Judge of Supreme Court/High Court, etc. Ÿ You cannot normally hold employment in the Government of India. Ÿ Can not acquire agricultural or plantation properties in India. However, such a person can inherit such properties.
Bank Accounts
A person may bring into India from any place outside India without limit foreign exchange other than unissued notes. However, if the aggregate value of the foreign exchange in the form of currency notes, bank notes or traveller’s cheques brought in by such person at any one time exceeds US$10, 000 or its equivalent or the aggregate value of the foreign currency notes brought in by such person at any one time exceeds US$5000 or its equivalent, a declaration to that effect is required to be made to the Custom authorities. Another issue that may be relevant to foreign nationals who are resident in India is that of possession and retention of foreign currency notes. Here, Indian law draws a distinction between residents who are non-permanent and those who are permanent. A nonpermanent resident is a person who is resident in India for employment for a specific duration, and a specific job or assignment of duration of not more than three years. Such residents can hold limitless amounts of currency notes acquired when they were abroad. Permanent residents can only hold a specified quantity (equivalent of US$2000) of foreign exchange, if such currency notes were acquired when they were abroad as a gift or honorarium, or as consideration for services rendered or business conducted there, or is the unspent amount of foreign exchange from a foreign visit. Further, the foreign exchange so possessed is permitted to be taken out of India in accordance with the Indian exchange control regulations. One of the most important issues facing foreigners residing in India is how to deal with any foreign exchange they may earn or possess. Persons resident in India are entitled to open
Property When a foreign national qualifies as a person resident in India, he may continue to hold, own, transfer or invest in foreign currency, foreign security or immoveable property situated outside India if such currency, security or property was acquired, held or owned by such person when he was resident outside India. When a foreign national leaves India (and becomes a resident outside India) he may continue to hold, own, transfer or invest in Indian currency, security or property which was acquired, held or owned by such person when he was a resident in India. It may be noted that the position outlined in the above two paragraphs is subject to specific regulations under Indian foreign exchange laws. Foreign nationals, though resident in India, require prior approval of the Reserve Bank of India in order to acquire (including buying or leasing) immovable property in India. However, a Foreign Embassy/Diplomat/Consulate General may either purchase or sell immovable property other than agricultural land/plantation property/farm house after obtaining clearance from Government of India, Ministry of External Affairs, and provided that for acquisition of such property consideration has been paid out of the remittance from abroad through normal banking channels.
Remittance of Assets There is a general prohibition against persons resident in India remitting assets outside India, without the approval of the Reserve Bank of India. Certain categories of foreign nationals – like persons who have retired from employment in India and widows of Indian residents who inherited their assets in India and are residing outside the country – may freely remit assets outside the country up to the value of US$ 1 million per year subject to fulfilling certain conditions. Students who are foreign nationals and who have completed their studies in India are also permitted to remit their bank balances, as long as they these were received through normal banking channels, or were the rupee proceeds of foreign exchange brought from abroad, or comprised of the stipend or scholarship received from the government or any other organization in India. Foreign nationals resident in India being employees of foreign companies outside India on deputation to the office, branch, subsidiary or joint venture in India, who hold a foreign currency account with a bank outside the country, are entitled to credit up to 75% of their salaries received from the foreign company to these overseas accounts.
various types of foreign currency accounts. One type of such foreign currency account is the Resident Foreign Currency Account (“RFC”). A person resident in India may open a RFC account out of, inter alia, foreign exchange received from his employer outside India as pension or any other super annuation or other monetary benefits. The funds in the RFC account are free from all restrictions regarding utilisation outside India. The account shall be maintained in the form of current account or savings account or as a term deposit. Another type of account that can be opened is the Resident Foreign Currency (Domestic) Account (“RFC (D)”). The RFC (D) account can be opened out of the foreign exchange acquired in the form of currency notes, bank notes and traveller’s cheques while on visit outside India, or by way of earning through export of goods/services etc. However, debits to these accounts shall be in accordance with the regulations stipulated by the Reserve Bank of India (“RBI”). The account shall be maintained in the form of a current account and shall not bear any interest. A third type of foreign currency account that is permitted in respect of foreign nationals resident in India is the Exchange Earner’s Foreign Currency Account (“EEFC”). However, the credits and debits to such accounts shall be in accordance with the conditions stipulated by the RBI. The abovementioned foreign currency accounts can be opened singly or jointly in the name of the person eligible to open such accounts. Further, foreign nationals resident in India are permitted to open rupee accounts in accordance with the regulations stipulated by the RBI. Foreign nationals resident in India being employees of a foreign company on deputation to the office/branch/subsidiary/joint venture in India of such foreign companies may open, hold or maintain foreign currency accounts with a bank outside India for receipt of salary payable to them for services rendered in India.
Insurance Ordinarily, persons resident in India are not allowed to take insurance, life or non-life cover, from companies outside India. However, non-life insurance cover can be taken from a foreign insurance company after the issuance of a 'no-objection' certificate from the Government of India. Foreign nationals who become permanent resident in India may also continue to hold any policy issued to them when they were residing outside the country, subject to the condition that premiums are paid out of foreign currency resources or the Resident Foreign Currency account of such persons. In case of a foreign life insurance policy in force for a period of not less than three years prior to the policyholder's coming to India, premiums may even be paid through a remittance from India, if prescribed conditions are met. There are also some restrictions on the claims or benefits accruing from insurance policies taken abroad. Proceeds accruing from a policy outside India (for which premiums have been paid from external foreign currency resources or an RFC Account) can be credited to the assured's foreign currency account held outside India or his RFC account in India. In case of a foreign life insurance policy for which premiums have been paid out of remittances from India, proceeds must be repatriated to India within 7 days of their receipt.
Concluding Remarks The above introduction to some of the salient aspects of Indian law relevant for foreign nationals in India will hopefully ensure that such Indian laws do not remain alien to them. India today, thrives under a far from perfect, but, nevertheless, considerably liberalised and flexible regime that offers tremendous opportunities y for those who are aware of its governing structures – laws included. Life in India can be a truly hassle-free and joyous experience for foreign nationals who understand this!
Doing Business in India - - - not that easy. Many NRI's will tell you that it is in fact a nightmare for NRI's to do business in India. Many NRI's have burnt their fingers in their ventures in India. Doing Business in India is tough for an NRI or a PIO who is used to smooth ride in developed world, where it is relatively easy to do business. The problem becomes compounded when an NRI does not find seek proper legal help before venturing into a business in India. However, if an NRI ventures in a planned and methodical manner, under proper legal guidance, he or she can succeed. The following are some of the points an NRI should keep in mind before starting any business in India: Ÿ
First, get a PIO or Person of Indian Origin Card (if you are a PIO, NRI do not require a PIO card) that puts you on a par with an Indian as far as business and tax matters are concerned. Among other benefits, a PIO has visa-free entry for 15 years and allows you to engage in business and own property, like any Indian.
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Second, get a PAN or Permanent Account Number card issued by the incometax department. Any person - NRI or Indian - making an investment of over Rs.50,000 is required to quote his/her PAN number. This also applies to purchases of over Rs.50,000. Since you plan to go into business in India, you will eventually file your income-tax returns annually. So you need a PAN card that is also a very useful identification document because it has your photo on it and you can show it in many places where you wish to be identified as an Indian - and not overcharged as an NRI!
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Third, Choose a Business Partner in India. Obviously, it is impossible for you to go into business on your own unless you want to move to India. If not, you need partners for your proposed venture. You will identify and select your partners on the basis of their track record, integrity and other personal attributes. Be careful of the single and most common pitfall of going into business with your relatives and close friends on the basis of your family relations or friendship. A great majority of N R I business ventures have come to grief because of this 'emotional' alliance. When the business collapses, you have lost not only your money but also a precious relationship.
US investors may have to disclose more With the new Foreign Account Tax Compliance Act (FATCA) all nancial institutions in India will be required to furnish information about US residents' nancial accounts or investments to the US tax department.
If you are a US resident with investments/assets in India, get ready for tighter scrutiny by the authorities here, thanks to the US government's renewed focus on tax avoidance by its residents. The US has enacted a law, the Foreign Account Tax Compliance Act (FATCA), which will soon start applying here. Under the law, all financial institutions (brokerages, mutual funds, insurance companies, banks and hedge funds) in India are required to furnish information about US residents' financial accounts or investments to the US tax department - the Internal Revenue Service (IRS). US taxpayers include US citizens, US residents (green card holders) and nonresidents who own foreign financial accounts or other offshore assets. In order to get the law implemented, the US government is signing InterGovernment Agreements (IGAs) with other countries. It is likely to sign one with India before December. After that, financial institutions in India will have to report the tax residency of their clients (both existing and new) to the Indian authorities, who in turn will forward the information to the US government.
HOW DO INVESTORS GET IMPACTED? Investors will have to give correct information about their tax residency and financial assets. This information will then be reported by financial institutions to the country's authorities. While all new investors will have to comply with the rules, existing investors with less than $50,000 assets have been exempted. In case of failure to comply with the new rules, the financial institution may withhold 30% tax on assets held by the investor with it. In some cases, fresh investment requests may be rejected or investors may be made to redeem their investments. To lower the 'reporting' burden, a few financial institutions such as mutual funds have stopped accepting fresh investment from US residents. Large fund houses like HDFC Mutual Fund and ICICI Prudential Mutual Fund bar US and Canadabased NRIs from investing in their schemes. For an existing investor who becomes a US or Canada resident, all facilities such as switch of schemes, dividend reinvestment, systematic investment plans, systematic transfers, etc, will be stopped and the investor will be made to sell out. However, such investors can invest in offshore funds launched by Indian asset management companies, or AMCs, in the US. Offshore funds usually replicate a successful fund back home. "US norms require a fund scheme and asset manager to be registered with the SEC under their 1940 Act and conform to their provisions to be able to accept investments from US residents. Thus, we clearly mention in our communication that we cannot accept investments from US residents. However, US residents interested in taking part in the India story can do by investing in India funds or exchange-traded funds domiciled in the US. There are a handful of them in existence." says Karun Marwah, head of International Business, ICICI Prudential Mutual Fund. But not all mutual funds have stopped taking investments from US-based NRIs. Many are ready to comply with FATCA. Will other financial institutions follow suit and stop taking investments from US residents? So far, except for mutual funds, no other financial institutions have given any such indication.
A SEA OF ILLEGAL IMMIGRANTS IN INDIA The Boston killings will bring into fore the issue of immigration once again. India, on her part, continues to deal with it day in and out. A RTI query revealed, in all, 71,000 illegal immigrants from 42 countries are on the loose in India. The recent Boston killings will bring into fore the issue of immigration. However, it isn’t that United Kingdom and the United States of America are the only nations that face the issue of illegal immigrants. India, on her part, has a large number of foreign nationals living in the country without legal documents in place. IMMIGRANTS FROM 42 NATIONS ARE ‘ILLEGAL’ A response to a RTI application filed earlier this month, seeking information on foreign national living in India illegally and the nation’s effort to deport them, revealed that besides nationals from neighboring countries, immigrants from over 42 countries live in India illegally. The reply also revealed that presently a total of 71,000 foreign nationals were staying illegally in India. It was also revealed that most of these illegal immigrants have been staying in the country for years and had come to India without valid travel documents which only reveal the country’s laxity towards security issues.
US, UK CITIZENS STAYING ILLEGALLY POSE THREAT. That many Pakistanis and Bangladeshis are staying illegally in India is known to most of us. What many might not be aware of is that there are a number of nationals from first world countries as well who have overstayed their welcome here, for various reasons. The arrest and subsequent interrogation of David Headley, an American national-turned-LeT jihadi, has put the spotlight on the grave threat to India's national security from outsiders - over the past few years, various police agencies have booked foreigners from more than 45 countries living illegally in India. Information compiled by the Union home ministry shows that in 2008, 65,149 foreign nationals were found living in India even after their visas had expired. The same year, 13,995 foreigners had to be deported from the country. The figures for 2009 are still being compiled. What comes as a big surprise is that a few thousand citizens from several first world countries like the US, UK, New Zealand, Germany and even Japan and South Korea are living illegally in India. The list also included 479 Chinese. "Not all of them may be as innocent as it seems. It is not enough to say that they stayed on with friends or relatives, lost track of time exploring India or overstayed a work permit; these are the usual excuses," said a police officer. "Headley has redefined the meaning of India's threat perception," said an intelligence official who spoke to TOI on condition of anonymity. He said that for long, citizens of friendly or developed countries were not on the radar of security agencies. "It is because of this that terror groups are increasingly turning to recruits from these groups to carry out their work.
No.25022/08/2009-F-I Government of India Ministry of Home Affairs (Foreigners Division) NDCC-II Building, Jaisingh Road, Near Jantar Mantar, New Delhi-110001.
To 1. Principal Secretaries (Home), All State Governments and Union Territories
Dated, the 5th November, 2012
2. Director Generals of Police/Commissioners of Police, All States / Union Territories Subject: Powers to take action against foreign nationals living illegally in India. Sir, I am directed to say that the matter regarding powers vested with the state Governments/UTs Administrations for arresting foreign nationals living illegally in India has been examined by the Government. In this context, the State Governments/UTs Administrations may note that the police authorities can exercise the power to arrest a foreign national living illegally in India in terms of Section 4 of the Passport (Entry into India) Act, 1920, which is reproduced below: “Power to Arrest - (1) Any officer of police, not below the rank of a Sub Inspector, and any officer of Customs Department empowered by a general or special order of the Central Government in this behalf may arrest without warrant any person who contravened or against whom a reasonable suspicion exists that he had contravened any rule of order made under Section 3”. 2. Further, any foreign national who remains in any area in India for a period exceeding the period for which the visa was issued to him can be proceeded against under Section 14 of the Foreigners Act, 1946. It may also be mentioned that a foreigner who enters into or stays in any area in India without the valid documents required for such entry or for such stay, as the case may be, can also be proceeded against under Section 14A (b) of the Foreigners Act, 1946. 3. You are accordingly requested to take strict action in accordance with the position stated in paras 2 & 3 above against the foreign nationals found to be staying illegally in your State/UT viz. those who have entered into India without valid travel documents and those who are found overstaying after coming to India on valid documents. Appropriate instructions in this regard may be issued to all concerned for strict compliance.
Yours faithfully, (P.V. Sivaraman) Director (Foreigners) Tel: 23438039
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IT'S NOT JUST ILLEGAL IMMIGRATION '
IT S INVASION
1800 120 1918 ISO 9001:2008