India: India Launches New Permanent Residency Scheme


The Union Cabinet on 31 August 2016 has approved the scheme for grant of Permanent Residency Status ("PRS") to foreign investors subject to the relevant conditions as specified in the FDI Policy notified by the Government from time to time. Incidentally the announcement of the scheme coincides with the introduction of a new proposal by the U.S. Citizenship and Immigration Services ("USCIS") on 26 August 2016 which would allow certain international entrepreneurs to be considered for parole (temporary permission to be in the United States) so that they may start or scale their businesses in the United States.

Current Position

Until now, foreign investors entering into India have only been eligible for business visas lasting up to five years. A business visa is strictly granted to such persons who wish to make a business related trip to India, for instance establishment of a business or industrial venture, purchase or sale of industrial / commercial products, or establishing contact on behalf of an overseas company in relation to any commercial or business related activities in India. Further, the applicant must be a person of assured financial standing and must have expertise in the field of the intended business.

A business visa with multiple entry facility can be granted for a period up to 5 years (United States citizens can get 5 years or 10 years multiple entry visa). A stay stipulation of a maximum period of 6 months will be prescribed for each visit keeping in view the nature of the business activity. The visa can be extended to a maximum of 5 years in cases where the visa is granted for a period less than 5 years. However, the gross sales / turnover from the business activities, for which the foreigner has been granted visa, should not be less than Rs.1 crore per annum and such turnover should have been achieved within 2 years of setting up the business.

Similarly in the United States (U.S.), the EB-5 visa program allows foreign nationals to obtain green cards if they invest at least U.S $ 500,000 in American businesses and plan to create or preserve 10 permanent full-time jobs for qualified U.S. workers. The program was designed to help create jobs and increase foreign investment in the U.S. economy.

Proposed Scheme

In the proposed PRS scheme, residency will be granted for a period of 10 years with multiple entries. This can be reviewed for another 10 years if the PRS holder has not come to adverse notice. In order to avail this scheme, the foreign investor will have to invest a minimum of U.S. $ 1.5 million to be brought within 18 months or U.S. $ 4 million to be brought within 36 months. Further, the foreign investment should result in generating employment to at least 20 resident Indians every financial year. There shall be no stay stipulation and the holders shall be exempt from registration requirements. PRS holders will be allowed to purchase one residential property for dwelling purpose. The older regime required the spouse / dependents of the investor to apply for entry visa. However, the PRS scheme proposes to permit the spouse / dependents of the PRS holder to take up employment in private sector and undertake studies in India.

As regards the proposal by USCIS, it would allow the Department of Homeland Security (DHS) to use its existing discretionary statutory parole authority for entrepreneurs of startup entities whose stay in the United States would provide a significant public benefit through the substantial and demonstrated potential for rapid business growth and job creation. Under this proposed rule, DHS may parole, on a case-by-case basis, eligible entrepreneurs of startup enterprises:

  • who have a significant ownership interest in the startup (at least 15 percent) and have an active and central role to its operations;
  • whose startup was formed in the United States within the past three years; and
  • whose startup has substantial and demonstrated potential for rapid business growth and job creation, as evidenced by:

    • receiving significant investment of capital (at least $345,000) from certain qualified U.S. investors with established records of successful investments;
    • receiving significant awards or grants (at least $100,000) from certain federal, state or local government entities; or
    • partially satisfying one or both of the above criteria in addition to other reliable and compelling evidence of the startup entity's substantial potential for rapid growth and job creation.

Under the proposed rule, entrepreneurs may be granted an initial stay of up to two years to oversee and grow their startup entity in the U.S. A subsequent request for re-parole (for up to three additional years) would be considered only if the entrepreneur and the startup entity continue to provide a significant public benefit as evidenced by substantial increases in capital investment, revenue or job creation.


Both India and U.S. had consciously made a decision in 2015 to elevate the India-US Strategic Dialogue to a Strategic and Commercial Dialogue, reflecting the significance of the trade and economic engagement between the two countries. With the focus on ease of doing business, innovation and entrepreneurship various complementary policies and measures have been introduced by both countries. There has been an increase of 500% in FDI inflows from the U.S. in a short period of 2 years. In this context the PRS scheme is an indication of enhanced openness towards foreign investors. Once implemented it shall set in motion increased investments by foreign investors, who will be able to avoid the lengthy and difficult business visa process.

Similarly, in the U.S., the new proposal shall have major impact on entrepreneurship and potentially on the broader economy of the country. It will open up a route for skilled entrepreneurs from developing nations such as India to acquire access to advanced infrastructure, start-up ecosystem and facilities available in the U.S. There are, however, concerns that the Obama administration may have exceeded its mandate by using the humanitarian parole to give temporary status to immigrant entrepreneurs. Ordinarily, the parole is granted to admit foreigners into the U.S. for a temporary period of time due to a compelling emergency, for instance the Cubans fleeing the Castro regime, and to admit 32,000 Hungarians, who escaped the 1956 Soviet invasion. The provision was originally intended to be a very limited power to be exercised by the President to deal with emergencies. Experts now believe that the new proposal dilutes the parole criteria, and creates a new category to allow immigrants.

Nevertheless, an observation needs to be made in respect of the timing of both the schemes. It is unlikely to be a mere happenstance that both the proposals were made close to each other. In fact, the PRS scheme was announced during the visit of the U.S. Secretary of State to India. The proposals will be complementary to each other, and once implemented will create opportunities for entrepreneurs from India to acquire access to better infrastructural environment, to further enhance and improve their products and services. Similarly, established businesses and investors from the U.S. will have the ability to expand their access to the talent and market in India. It will lead to creation of jobs and potentially boost the economies of both the countries. It is a significant step towards the enhanced commercial and trade relationship of the two countries.

The PRS scheme, however, may give rise to security concerns for the country. Ordinarily India has always been vigilant about foreign investments from countries with which it has had a history of starined and difficult diplomatic relations. This is also reflected in the foreign investment laws which have placed stringent conditions in respect of investments from countries such as Pakistan and Bangladesh. With the new scheme, extremist groups, which are not particularly devoid of funds, may try to route investments into India, secure residency permits and thereby circumvent the registration requirements and scout soft targets in the country. Simply stated, it is probable that there can be recurrence of a David Headley scenario, wherein the simplicity and ease of the PRS scheme is abused.

Although the scheme is evidence of the government's commitment to make business travel and relocation easier, India will need to be extra vigilant and establish a robust scrutiny and security regime to ensure that the increase in "ease of doing business" does not compromise its national security interests.

Mr. Shinoj Koshy is a partner with Luthra & Luthra based in the New Delhi office. Mr. Koshy is a dual-qualified lawyer with extensive experience in domestic and cross-border M&A transactions. His practice focuses on corporate transactions, particularly M&A (in telecom, logistics and outsourcing), joint ventures, corporate finance (equity and debt listings through primary and secondary offerings) and commercial dispute resolution (shareholder disputes and post-closing pricing disputes in M&A). He has advised several corporates and PE funds on foreign investment strategies for emerging markets like India and countries in Middle East & North Africa.

He is also associated with industry associations like FICCI and Invest India, advising them on ways to promote FDI in key sectors like infrastructure, manufacturing and retail. Additionally he is also a member of the India-Jersey Advisory Group advising the States of Jersey government on its interactions with the Government of India.

The authors, Shinoj Koshy is a partner & Soumitra Bose, an associate with Luthra & Luthra Law Offices. The views expressed here are their own and not of the Firm.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions