Indian founders are the new prize as countries compete for global talent

The world wants Indian founders: Why immigration rules are shifting to jobs, business

For years, residency-by-investment programmes offered wealthy Indians a relatively straightforward proposition: invest capital, buy qualifying assets and secure a pathway to residence. But the global competition for Indian migrants is increasingly moving in a different direction — towards entrepreneurs who bring businesses, jobs and economic activity.

 

Countries are increasingly looking beyond passive capital and seeking founders and skilled professionals who can establish businesses, employ workers and contribute to local economies, according to Saif Nawaz, Founder and Managing Partner of OnDemand International.

 

“The immigration model is moving from capital-linked residency to activity-linked residency. Governments increasingly want to see genuine business activity, employment and economic contribution rather than simply passive investment.”

 

From buying property to building businesses

 

The changing immigration landscape means that simply having the financial capacity to invest overseas may no longer be enough for entrepreneurs looking for a long-term base.

  

“For Indian founders, the question is no longer simply where can I obtain residency by deploying capital. It is where can I establish a genuine business, create employment and build a sustainable international operation,” Nawaz said.

 

This is particularly relevant for entrepreneurs whose businesses are already expanding internationally. A founder may maintain engineering, product development, finance or back-office operations in India while establishing sales, distribution or customer-facing functions in another country.

 

That means moving abroad does not necessarily mean moving the entire business out of India.

 

Indian founders are becoming globally mobile

 

Indian entrepreneurs are increasingly building businesses that require a presence across multiple markets. For such founders, setting up an overseas entity can serve a commercial purpose — giving the business access to customers, suppliers, employees and investors in the new market — while immigration status becomes a parallel consideration.

 

Nawaz said the decision should therefore begin with the business model rather than the visa.

 

“Founders often start by asking which country will give them the easiest residency. The better approach is to start with the business: where are the customers, where will the employees be, where will the revenue be generated and where does the founder actually need to be physically present?”

 

This approach can also determine which immigration route is appropriate. Entrepreneur and business-immigration programmes differ significantly between countries, with some focusing on investment, others on innovation, employment, business viability or a combination of these factors.

 

Why countries want Indian entrepreneurs

 

India's large pool of entrepreneurs and skilled professionals makes its talent increasingly valuable to countries looking to attract new businesses and investment.

 

For destination countries, an entrepreneur who establishes an operating company can potentially generate a wider economic footprint through employment, local spending, business activity and tax contributions than a passive investor. 

"Europe's median age is now over 44. India's is under 30. An Indian promoter arriving in Amsterdam, Barcelona or Warsaw brings four things at once,  equity, an operating team, a supply chain back home, and a customer network across the diaspora. Very few investor profiles deliver all four in one entity. That is why governments have moved from tolerating foreign founders to actively recruiting them," said Nawaz.

 

There is a second, quieter reason. Indian businesses tend to survive. 

 

"Most of the promoters we work with have already been through a currency shock, a GST transition, a demonetisation, a pandemic. They arrive with scar tissue. Regulators and banks in mature markets are increasingly able to tell the difference between a well-funded experiment and an operator who knows how to run a business through a bad year," Nawaz added. 

What India's rising outward FDI says about the next decade of Indian business

 

"India's outward FDI commitments reached $48.6 billion in FY26, up from $43.7 billion in FY25, and that is only the formally routed number. It does not capture the thousands of small and mid-sized promoters setting up subsidiaries, branches and warehouses under the liberalised ODI framework without ever making a headline. The composition matters more than the number. A decade ago, outbound investment meant a handful of conglomerates buying distressed assets. Today it is a ₹40-crore auto components manufacturer opening a Poland warehouse, an IT services firm putting three people in Amsterdam, a recycling business taking a Spanish licence. The signal for the next decade is this: Indian companies are moving from export to presence. Exporting means you compete on price and you are always one tariff away from irrelevance. Presence means you own the customer relationship, you invoice locally, you hold stock locally, and your margin stops being a function of the freight market. That shift from shipping goods to owning distribution, is the single most consequential change in Indian business since liberalisation,' said Nawaz.

   

   

But setting up a company does not automatically mean getting residency

 

A foreign company may be commercially useful without automatically giving its Indian owner the right to live and work in that country. Immigration programmes can have their own requirements covering business activity, investment, qualifications, employment, innovation and physical presence.

 

This also means that founders should not establish an overseas structure solely because they believe it will make obtaining residency easier.

 

The business needs to have genuine substance and a clear commercial rationale.

 

The tax and compliance layer

 

There is another consideration for founders expanding overseas: immigration planning cannot be separated entirely from tax and corporate structuring.

 

An entrepreneur who becomes tax resident in another country may face new reporting and tax obligations. The overseas company itself can also create questions around permanent establishment, transfer pricing, management and control, and cross-border transactions.

 

Nawaz said founders need to think about these issues before capital and operations are moved.

 

“Residency should follow the business structure, not drive it. If the corporate, tax and operational structure is not sustainable, obtaining a visa is only solving one part of the problem and can create larger issues later.”

 

UAE, Europe or elsewhere?

 

The choice of destination will ultimately depend on the entrepreneur's business rather than a universal ranking of countries.

 

The UAE may appeal to founders seeking proximity to India and access to Middle Eastern markets, while European jurisdictions can offer access to a much larger single market and potentially different business and mobility opportunities. Singapore can be attractive for businesses targeting Asia, while countries such as Australia and Canada have their own skilled and entrepreneurial migration pathways.  "Portugal and Spain restructured their entry pathways to reward enterprise and employment rather than property purchase. The Netherlands has long run a founder-friendly route with a substance test rather than a cheque-size test. Poland has become a serious base for operations because of cost and access. Singapore, Canada and Australia are all competing for the same operator profile. And Indian professionals sit at the centre of this. English-speaking, often multilingual, technically trained, and critically, internationally deployable," said Nawaz.

 

The cost of getting global wrong: why tax planning can make or break international expansion

Tax is not the last item on the setup checklist. It is the item that determines whether the checklist was worth completing.  Four failures account for most of the damage. Nawaz lists these as:  Permanent establishment. A founder sends a salesperson to Germany who signs contracts. There is now a taxable presence in Germany that nobody planned for, with back taxes and penalties attached.

 

Substance. Post-MLI, treaty benefits are not automatic. If your holding company has no directors, no office and no decisions taken locally, the Principal Purpose Test can deny you the treaty relief the entire structure was designed to capture.

 

Transfer pricing. The India entity does the engineering and invoices the overseas entity at an arbitrary markup. Both tax authorities have a view on that number, and the two views are rarely the same.

 

Repatriation. Profits accumulate offshore and then the founder discovers the withholding tax on the way home, or that the structure creates double taxation instead of relieving it. 

"Every one of these is preventable at the design stage and expensive to fix afterwards. The rule I give founders is simple: decide how the money comes home before you decide where it goes out. If you cannot draw the repatriation path on one page, the structure is not finished," said Nawaz. 

The overseas incorporation trap: when going global, what can increase your tax burden?

 

The trap is elegance. Founders fall in love with a structure diagram instead of a business. The most common version is over-layering. 

 

"Somebody advises a promoter that three entities in three jurisdictions is more efficient than one. Now there are three audits, three sets of filings, three bank relationships, three sets of director obligations and, under scrutiny, one entity that cannot justify its own existence," said Nawaz.

 

 GAAR in India and anti-abuse provisions abroad are both designed to look straight through arrangements whose primary purpose is tax advantage. 

 

"Then there is the holding company placed in a jurisdiction chosen purely for its headline rate, with no operations, no local decision-making and no commercial rationale. That is not planning. That is, exposure to the structure creates a tax bill instead of avoiding one, and Pillar Two has narrowed that space further for larger groups," Nawaz explained.

 

 The third trap is silence. Founders under-report the overseas entity in India, or misunderstand ODI reporting obligations, and a compliance issue compounds quietly for three years. 

 

"My advice is unglamorous: build the structure your business actually needs, in the market you actually intend to serve, with real people in real offices. Substance is not a cost. In 2026, substance is the tax strategy. Everything else is a liability with a nice diagram," said Nawaz.