For many Non-Resident Indians (NRIs), the connection to India is more than just emotional, it’s financial. Whether it’s an inherited family home, or an investment portfolio, navigating the complexities of tax efficiency and legal compliance when managing these assets can often feel overwhelming.
However, it is no longer just about keeping those assets in India, it is important to ensure that they are structured for protection, expansion and optimisation.
The notion of wealth planning often stems from succession, inheritance and legacy. In India this traditionally involves complex probate processes and tax implications.
When considering the succession of their assets, it can be favourable for NRIs to set up a private trust to house their India assets. By housing Indian assets within a private trust, two critical objectives can be achieved:
1. Tax-efficient distribution:
Distributions made by a properly structured trust to Indian-resident beneficiaries can often be managed without incurring additional tax burdens.
2. Residency freedom:
One of the most overlooked benefits of a trust is residency management. By moving assets into a trust, a Settlor may be able to spend more time in India (exceeding the typical 120-day threshold) without inadvertently triggering a change in their global tax residency status.
As Indian families become more international, the need to understand how best to move capital seamlessly between India and their new homes (like the UAE or UK) has intensified.
For individuals: The Liberalised Remittance Scheme (LRS) enables Indian-resident individuals to remit up to USD $250,000 per year. In a family of four, a member can strategically gift funds to their children and spouse, thereby effectively increasing the limit to USD $1million. This allows for significant offshore wealth accumulation while staying fully compliant with the Reserve Bank of India under the LRS.
For business owners: The Overseas Direct Investment (ODI) route offers a path to global expansion for those running successful Indian companies. Under the ODI route, Indian companies can invest up to 400% of their net worth into a Wholly Owned Subsidiary (WOS) or Joint Venture overseas.
The foreign entity can undertake any active business except for real estate activities i.e. trading in real estate. Whether it’s establishing a headquarters in Dubai or acquiring a corporate guest house for global operations, the ODI route turns Indian business success into global capital.
Strategic tax optimisation sets a comprehensive wealth strategy apart from simply holding assets to truly growing wealth. India’s network of Double Taxation Avoidance Agreements (DTAA) provides security, neutralising the burden of dual taxation across borders.
Recent legal updates around mutual funds have provided breakthroughs for investors in Singapore, the UAE, and the UK:
• Capital gains shield (UAE & Singapore): A Tribunal decision in March 2025 ruled that mutual fund units are not ‘shares’ and fall outside the scope of taxable capital gains. Thus, placing them in a more favourable tax category, provided they hold a valid Tax Residency Certificate (TRC), by virtue of a DTAA between India and Singapore. As capital gains on mutual funds held by NRIs in Singapore are not liable to tax.
The same benefit, of capital gains tax exemption, will apply to all UAE residents by virtue of Article 13 of the India-UAE DTAA.
• Dividend cap (UK): NRIs residing in the UK can benefit from the favourable tax treatment of income from Indian mutual funds, which is often classified as ‘dividends’. Under Article 10 of the UK-India Treaty, this tax rate is capped at just 10%, which is significantly lower than standard rates.
The complexities of Indian tax don’t have to be a barrier to a global lifestyle. Sanctuary can help bridge Indian heritage and international endeavours, assisting clients with personalised solutions for their India tax and cross-border planning. Our expert team provides bespoke end-to-end tax and advisory services, ensuring that your assets are not only compliant, but actively working to support your goals.
If you’re ready to structure your India assets for the future, contact our expert team today and discover how we can support you. Complete the contact form on our website https://www.sanctuary.ae/contact or email us at hello@sanctuary.ae to begin your consultation.
For more information on our advisory services, visit our Tax & Advisory services page.
For UK businesses considering opportunities in Saudi Arabia, the following steps outline the overall process:
1. Business Activity: Determine the appropriate business activity which will aligns with your business and satisfies all undertakings you will engage with in the Kingdom.
2. Local Partnerships: Consider any potential opportunities for collaborations with established local businesses to ease market entry and meet regulatory requirements.
3. Documentation: Gather the required documentation for incorporation in KSA.
4. Company Registration: Work with experts and the relevant governing bodies to assist with the incorporation process, ensuring compliance with local laws and regulations.
5. Other Requirements: Consider any other requirements for establishing in Saudi Arabia such as capital and tax requirements.
Saudi Arabia's Vision 2030 represents a significant opportunity for UK businesses to engage with an expanding market with vast potential. As the Kingdom continues to diversify its economy and expand its global influence, UK companies are well-positioned to support and benefit from this transformation. With the right strategy, partnerships, and local support, there are a wealth of possibilities.
By aligning your business with Saudi Arabia’s Vision 2030, the benefits for UK and international businesses looking to Saudi Arabia have never been greater.
At Sanctuary, we specialise in assisting businesses looking to expand into Saudi Arabia. We help navigate the complexities of the Saudi market, ensuring that you have the expertise needed to best prepare for success, so get in touch today.
Our expert team offers comprehensive support across a range of services, from company registration, advisory services, and more. Explore our services to discover how we can help you.
Vision 2030 is a strategic framework designed to diversify Saudi Arabia’s economy, reduce its dependency on oil, and transform the Kingdom into a global business hub.
Key points include economic diversification, social reforms, investment in technology and infrastructure, sustainability, and creating a competitive workforce.
The main focus of the Saudi Arabian Vision 2030 strategy is to build on key economic sectors such as hospitality, travel and tourism and build economic stability and sustainability.
Saudi Arabia’s Vision 2030 initiative is aimed at diversifying its economy through strategic investments into the non-oil sector and ensuring a more sustainable economic future.
Saudi Arabia has committed over $500 billion to Vision 2030, funding projects that span a variety of sectors, including energy, tourism, and infrastructure.
Yes, with its growing economy, reform initiatives, and investment incentives, Saudi Arabia is a highly attractive destination for foreign businesses seeking growth opportunities.
Key growing industries include renewable energy, tourism, healthcare, technology, and education.
Saudi Arabia permits foreign owned businesses and investment into the Kingdom, which has been elevated by the Vision 2030 initiative. A MISA licence is required for foreign investors or businesses to establish.
As a result of the diversification efforts of Saudi Vision 2030, the non-oil and private sector in the Kingdom have witnessed unprecedented growth in the past few years. The private sector continues to grow each quarter and the non-oil sectors continue to reach record contributions for the Kingdom’s GDP.
