When I was at UC Berkeley, my fees went up every year. Not because the university kept raising them. The rupee was depreciating. Every year, the same dollar amount was costing my family more back home. That was the first time I felt, in a very real way, what currency depreciation actually means.
The rupee depreciates every year. If your wealth is sitting in rupees and your spending or your life in any way touches the world outside India, your purchasing power is shrinking. Your kids studying abroad, travel, anything priced in dollars.
“For a lot of people I knew, investing abroad was not about chasing returns. It was the obvious, necessary thing to do.”
My own father is a good example. He wanted to diversify globally, hold some wealth outside India. What that actually required was opening accounts in Singapore, in Dubai, and at some point just sending money to me in San Francisco to invest on his behalf. I was an engineer at SoFi. But it was easier to go through me than to figure out the system himself. He was not the only one doing this.
So when I looked at what existed, there were two options. One was platforms based out of India. They give you access to the US market, which is good, but the support around tax, estate-tax and compliance is minimal. And this holds true for both HNIs and smaller investors. Nobody is telling you about FEMA requirements, UCITS ETFs, what you need to file at the end of the year.
The other option was going directly to an international broker like Interactive Brokers. You get genuine global access, but they are not built for Indian investors and you practically get very little support as an individual investor.
Access to markets was only a part of the problem. What nobody had solved was the layer on top of it: the money transfer process, the estate-tax, compliance, advisory, and the tax filing at year end.
And these are things most platforms do not tell you, like the disclosures needed when you hold foreign assets, and how large US investments are taxed upon inheritance. Most people investing abroad from India have no idea about this.
That is the kind of thing that needs to be solved, and back in India, nobody was really talking about it.
So I left the US, came back to India, and built Paasa to solve exactly that.
— Nitish
