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Main Challenges that NRIs face While Living Abroad

Main Challenges that NRIs face While Living Abroad

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Nearly 7.5 lakh Indian students took a flight abroad In 12 months. According to data provided by Subhas Sarkar, Minister of State in the Ministry of Education, the headcount of Indian students who study abroad jumped up by 68.79% last year.

Going abroad is not an easy decision. Nor is it a cakewalk to live there because of a number of challenges that NRIs face for real. But at the same time, this decision brings a ton of new opportunities and financial growth. You can have cultural exposure. Certainly, these all affect your emotional, social, and financial well-being.

Today, through this blog, you can get insights into the most common challenges that non-residents of India face while being abroad.

Challenges that NRIs Face Abroad

Let’s get started.

  1. Cultural Identity and Adaptation

Cultural differences often seem big. This is because you go out with a different cultural identity, and you have to mix with the local culture of the USA, UK, Russia, or wherever you go. According to a study by the Pew Research Center, about 47% of Indian immigrants in the United States found that adapting to American culture is like chewing iron bullets. It’s like a tug-of-war between preserving & protecting your own cultural roots, and simultaneously, integrating into the local society. Many-a-times, you feel isolated.

  1. Loneliness and Social Isolation

For sure, one has to live away from his/her home country. A long stay somewhere far away from the family can result in feeling alone. A survey conducted by the Association of Indian Community in Indonesia found that nearly 80% of Indians in Indonesia suffer from homesickness. This is profusely impacting their mental health and wellbeing.

  1. Financial Pressures

Although the ultimate aim of shifting abroad is to improve financial prospects, NRIs also encounter financial pressures. This can be unique to their situation, such as sending money back to their families and maintaining two households (while being far away). Sometimes, they have to deal with currency fluctuations because of the aforesaid reasons, which certainly can lead to financial stress. In this regard, the World Bank, India reported that India was the top recipient of remittances globally in 2020, with over $83 billion received from NRIs.

  1. Employment Challenges

There are many Indians who go on study visas in Canada, the United States, and other foreign countries.  And in many cases, they have to find jobs for their pocket money and managing expenses there, which is obviously necessary because of high currency value. In these circumstances, they lack foreign qualifications and work experience.  Of course, the cultural difference is also a big thing to adjust in workplace dynamics. A study by the Confederation of Indian Industry (CII) clearly stated that about 40% of Indian professionals abroad live life like a nightmare because of difficulties in finding jobs matching their skills and qualifications.

  1. Legal and Documentation Hassles

This is indeed a big struggle to navigate legal processes, paperwork, and documentation in a foreign country. Precisely, this includes obtaining visas, PPC, single status certificate, & the change of status certificate. It may also encompass dealing with residency permits, and understanding tax laws. A report by the Ministry of External Affairs states that legal and documentation challenges are among the topmost concerns for non-residents of India.

  1. Health Care Concerns

However, medical tourism is pervasive. But, accessing quality healthcare can be a challenge for NRIs. This can particularly happen to them in countries where the healthcare systems are different. Language barriers might be there. In addition, you can see differences in medical practices, and expensive healthcare abroad. A survey conducted by Apollo Hospitals clearly states that around 80% of NRIs believe that the Indian healthcare system is more affordable and accessible than healthcare abroad.

  1. Remittances and Investment

Sending money back to India as remittances is a very popular trend among NRIs. However, they also face challenges in finding the right investment opportunities that can justify or align with their financial needs and risk tolerance. If you look into a report by the Reserve Bank of India, it states that NRIs are increasingly looking for investment options that offer higher returns and flexibility.

  1. Getting Married Abroad

Getting married abroad is no less than a nightmare for NRIs. This is because of legal complexities and cultural differences. According to a survey, 65% of NRIs faced hurdles in navigating foreign marriage laws, and 72% struggled with coordinating ceremonies across borders. Balancing traditional practices and legal requirements like submitting a single status certificate can lead to emotional and logistical stress. It ultimately affects their wedding experience.

Conclusion

There are multiple challenges that NRIs face abroad because of their cultural identity, emotional well-being, social connections, marriages, and financial stability. These challenges are not just individual experiences, but also impact a majority of NRIs. Governments, organizations, and communities can work together to provide support systems, resources, and platforms that address the unique needs of NRIs and help them navigate the complexities of living abroad.

 

 

Wealth Management Tips
Wealth Management Tips: Smart Strategies for NRIs

Wealth Management Tips: Smart Strategies for NRIs

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Thousands of NRIs shift to various countries every year. In the United States alone, more than one million visa applications from Indians are processed. Despite immigration, many non-residents of India (NRIs) are there who have income sourced in India. Even, many of them go there with a dream to come back here again after retirement. So, continue to lookout for the best opportunities, especially the investment plans in India. This is a vital step for managing their finances, no matter where you go and live.

This well management is called wealth management for NRIs. Here in this blog, we bring a few important tips for non-residents to manage their wealth.

  • Convert Bank Account into NRO Account

This is a very first step that non-residents should work on. There may be many accounts, such as saving bank account, Demat account, etc., in their name in India. Since they are no more a normal citizen, they have to convert all these accounts into NRI accounts. Here, an NRO (Non-Residential Ordinary), Foreign Currency Non-Resident (FCNR), or NRE (Non-Residential External) account can help. NRIs must have this account, especially if they have income from any source in India. It will combine their accounts. And hence, managing them all become easy. Also, these accounts help in earning foreign currency and repatriate funds easily. Another option is opening a PIS account. It expands for Portfolio Investment Scheme account that can help in easing trading. Simply put, Indians can buy and sell their shares on some recognized stock exchanges here.

  • Regularly Review and Rebalance

Markets and economic conditions are ever-evolving. You should regularly review your PIS to ensure that it resonates with your risk tolerance and financial goals. Monitoring the performance of your investments is necessary. For this, you need to discover market trends, economic indicators, and global events that could actually impact your portfolio. This will help you to make adjustments to resonate them with your financial goals. If anything seems troublesome, you can sell or buy to rebalance your portfolio over time. This activity maintains the desired asset allocation.

  • Discover Investment Plans and Choose the Best One

India is a developing economy where equity is growing rapidly. This is why the debt return in the country is higher than those of developed countries. This is why selecting the best investment plan in India can help non-residents to make more money through investing in mutual funds and equity shares. But before investing in shares, read the guidelines specifically from RBI thoroughly.  Apart from this investment, they can purchase any residential or commercial properties in India. This alternative brings a few tax implications. They should strictly take care of these implications when they are likely to sell any property. Otherwise, the tax implication and ownership rights can adversely affect your investments. You may consult legal experts for a smooth real estate transactions.

  • Optimize Currency Exchange

Non-residents can also make benefits out of currency exchange rates. Certainly, these rates can impact ROIs. Timely and strategically exchanging currency can soar investment gains. To make it achievable, you can utilize the services of foreign exchange experts. Those professionals can assist you in optimizing these transactions. You should also stay informed about foreign exchange regulations and limits that are concerned with NRIs. Ignoring these updates can lead to compromising your investments and repatriations effectively.

  • Invest in Health Insurance

Having a health cover is essential. This can help in coping up with the rising healthcare costs. Non-residents should also have health insurance. Having pre-existing diseases may not make it easy to acquire a plan. So, it’s good to invest in a plan before for overcoming expenses associated with potential diseases. This initiative will help you to sail across uncertain medical expenses.

  • Discover Tax Liabilities

Capital income from India is taxable in India. However, India has a Double Tax Avoidance Agreement (DTAA) with many countries. This can help in avoiding tax if one has the same income twice. This agreement allows you to set off taxes that have been paid in one country, but are due in another country. The DTAA agreement brings peace of mind, as it can help non-residents to pay less tax rates in India. In order to leverage DTAA, you can fill the Form 10F. In addition, you should have a tax residency certificate from the country of your residence.

  • Seek Professional Guidance

Wealth management for anyone, including non-residents, can be like chewing iron bullets.  It involves complex legal, financial, and tax considerations. Consult with financial advisors, tax consultants, and legal experts who specialize in cross-border wealth management. Their insights can help you make informed decisions.

These tips can help non-residents to not only manage their wealth, but also make profit and prosperous life after retirement.

Conclusion

NRIs should focus on diversifying their investments across various asset classes to manage risk effectively. They should prioritize building a well-structured financial plan that aligns with long-term goals. Utilizing NRI-specific investment options and tax benefits can help while keeping them informed about changing regulations. Regularly review and adjust the portfolio to maintain alignment with evolving financial objectives and market conditions. Seeking professional advice from financial experts with expertise in both India and the resident country’s financial systems is crucial for a comprehensive wealth management strategy.

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