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In an earlier piece I argued that Japan’s globalization debate is built almost entirely around sending people out, and that the return trip — what happens when someone who has spent decades abroad wants to come back — has never been designed for (The Missing Half of Japan’s Globalization: Talent Circulation).
What stayed with me after writing it was a different question.
How do countries with millions of their own citizens living abroad handle this?
The most instructive answer I found was India’s. Anyone working in Silicon Valley encounters Indian colleagues, founders, and investors daily. Some settle permanently in the US; others return home after ten or twenty years. India has built its institutions on the assumption that both are normal.
The point of this piece is not to catalogue Indian regulation. It is to look at a working example of what it means to design talent circulation into a country’s institutions.
Start With the Scale
India’s institutional investment here rests on numbers that are hard to argue with.
According to India’s Ministry of External Affairs, roughly 37.3 million people of Indian origin live abroad (January 2026) — about 17.8 million Non-Resident Indians holding Indian citizenship, and about 19.5 million Persons of Indian Origin and OCI holders.
The World Bank puts India’s inward remittances at approximately $129 billion in 2024 — the largest of any country in the world, nearly double second-place Mexico at $68 billion. Remittances have accounted for 3–4% of India’s GDP consistently since 1999–2000.
Zoom out and the picture sharpens further. The World Bank estimates total remittances to low- and middle-income countries at $685 billion in 2024 — more than foreign direct investment and official development assistance combined. Over the past decade, FDI to these countries fell 41% while remittances rose 57%.
For India, the relationship with citizens abroad is not sentiment. It is balance-of-payments infrastructure. The institutions followed from that.
“Citizens Living Abroad” Is a Formal Category
India recognizes NRI (Non-Resident Indian) as an administrative category: an Indian citizen residing outside India.
Banking follows from the category. Two account types exist specifically for non-residents:
- NRE (Non-Resident External) — for managing funds earned abroad
- NRO (Non-Resident Ordinary) — for managing India-sourced income
What matters is what comes next. On returning and becoming resident, there are defined paths to convert an NRO account into an ordinary resident account, and to move an NRE account into a resident account or into an RFC (Resident Foreign Currency) account that holds foreign currency.
Leave → live abroad → come home.
That entire sequence is built into the institutional design. It is a fundamentally different starting point from one where a returnee has to establish from scratch how their own situation will be treated.
In that earlier piece I noted that the first obstacle a returnee hits is not knowing what they need to find out. Having the category defined means the question already has an answer.
Not Making the Return a Cliff
The most instructive part of India’s design is the tax treatment.
India has a status called RNOR (Resident but Not Ordinarily Resident). Someone who has lived abroad for a long stretch and then returns does not, if certain conditions are met, immediately become an ordinary resident for tax purposes. Their foreign income is taxed more narrowly than an ordinary resident’s.
The determination is made annually against residence history — how many of the preceding ten years were spent as a non-resident, how many days were spent in India over the preceding seven years. It is not a fixed “two-year programme.” But the practical effect is that a long-term expatriate returning home gets a transition period before the domestic regime applies in full.
The system does not demand that everything switch over the moment you land. The cushion is built into the institution rather than left to the individual.
Japan Has the Same Tool. Returnees Cannot Use It.
It is worth being precise about the Japanese side.
Japan’s Income Tax Act sorts individuals into three categories: non-resident, non-permanent resident, and ordinary resident. For a non-permanent resident, foreign-source income is taxable only to the extent it is paid in Japan or remitted to Japan. Conceptually, this is close to RNOR.
The problem is the definition:
A resident who does not hold Japanese nationality and who has had a domicile or residence in Japan for five years or less within the preceding ten years. (National Tax Agency, No. 2010)
Not holding Japanese nationality is a condition of eligibility.
So a foreign national arriving in Japan gets up to five years of transition. A Japanese national returning after decades abroad does not qualify. The NTA states plainly that a returnee becomes a resident and is taxed on “all income, not limited to Japan-source income” (No. 1935). There is no ramp.
While living abroad, a Japanese national is a non-resident, and foreign income is outside Japan’s reach — identical to any foreign national. What changes is the moment of return.
It is not that Japan lacks a cushion. It is that returning Japanese nationals are the one group excluded from it. The structure I described in that earlier piece — a system optimized for people whose lives are contained within the country — is visible here at the level of statutory text.
This article is not intended as individual tax advice. Actual treatment depends on specific circumstances and requires confirmation with a qualified professional.
Changing Citizenship Without Ending the Relationship
The second instructive piece of design is OCI (Overseas Citizen of India).
Like Japan, India does not permit dual citizenship as a general rule. Acquire another nationality and Indian citizenship cannot be retained. So far, the two countries are the same.
The divergence comes next. OCI, available to former Indian citizens and certain descendants, grants a lifelong multiple-entry visa and the ability to reside in India long-term.
OCI is not Indian citizenship, and India’s Ministry of External Affairs says so explicitly — it is not dual citizenship. OCI holders cannot vote, cannot hold public office or constitutional posts, and cannot purchase agricultural land. The line between the two statuses is drawn clearly.
But the design principle is unambiguous. Changing nationality and severing the relationship with the country are not treated as the same event.
This is where the lesson for Japan sits. Living in the US for a long time, you see people take American citizenship for reasons of work, family, or daily life. You also see Japanese nationals deliberate for years over whether to give up their Japanese passport. Often the people who agonize most are the ones who most want to keep their connection to Japan.
Framing that as an emotional matter misses the point. The issue for Japan is structural: the relationship with people who have accumulated experience, capital, and networks abroad is severed categorically by a choice of nationality. As that earlier piece argued, what does not come back is not only the person — it is the capital, the knowledge, and the relationship capital.
Why India Goes This Far
India has its own reasons, specific to India.
Over the past three decades India has grown rapidly, led by its IT sector. In Silicon Valley, Indian-origin executives running major technology companies — Sundar Pichai at Google, Satya Nadella at Microsoft, Arvind Krishna at IBM — are no longer remarkable. The overseas Indian community is large, and remittances, investment, and talent networks all matter materially to India’s economy.
That is precisely why India needed an institutional answer to a full range of cases: people who leave, people who stay abroad, people who return, and people who take another citizenship.
The structure is the mirror image of what I described earlier. Japan’s domestic market was large enough that a complete professional and personal life could be built without ever leaving. That is a genuine strength — and also the reason designing for cross-border lives could be deferred. India never had that option.
What This Means in Practice for Japan
India and Japan differ in scale and in circumstance. About 1.29 million Japanese nationals live abroad (Ministry of Foreign Affairs, as of October 1, 2024) against India’s 37.3 million — nearly two orders of magnitude apart. Importing RNOR or OCI wholesale is not the argument.
But the composition of Japan’s number is shifting in a way that is hard to ignore.
In the same survey, 580,384 are permanent residents abroad and 712,713 are long-term stayers. The total has been roughly flat, but permanent residents rose 1.0% year on year — a second consecutive annual increase — while long-term stayers declined.
The implication is direct. The Japanese population abroad is shifting from the fixed-term “expatriate assignment” model toward people who have built a permanent life overseas. And that second group is precisely the one Japan’s institutions were never designed around.
In that earlier piece I noted that Japanese corporate overseas assignments are typically three-to-five-year rotations, a different thing from an individual putting down long-term roots. The data suggests that rotation-based population is shrinking while the group outside the system grows.
Three practical conclusions follow.
1. The affected population is not going to shrink. Japanese nationals holding assets and a life abroad will only become more common. Treated as a marginal case, both policy and administrative practice will keep responding after the fact.
2. The transition period needs to be designed. Real relocations do not happen on a single date. They involve trial stays, dual bases, and staged transfers of business activity. A cushion for exactly this is what RNOR provides.
3. Maintaining the relationship is a separate question from returning. How to stay connected to people who will not come back can be addressed independently of repatriation policy. That is what OCI demonstrates. Not everyone needs to return. If people who stay abroad retain a working connection to Japan, circulation can still happen through investment, partnerships, and talent introductions.
Designing What Happens After You Send Them Out
“Young people should go abroad.” “Japan needs globally capable talent.” I agree with both.
But if someone genuinely builds a career abroad, their life stops being containable within Japan. They work overseas, start families, accumulate assets, and sometimes face a decision about citizenship itself. They may want to come back one day. They may not — and still want to stay connected.
I wrote earlier that globalization is not a one-way street. Looking at India’s institutions changed my view of what that means: it is not only a question about returning.
Being able to maintain a connection to Japan while living abroad, and being able to return without extraordinary friction, are two halves of the same question. What relationship does a country design with its people after it sends them out?
Japan should treat the institutions that govern what happens afterward with the same seriousness it gives to sending people out in the first place. That, I think, is what the next phase of Japan’s globalization requires.
References
- Ministry of External Affairs, India — Population of Overseas Indians / Overseas Citizenship of India Scheme
- Income Tax Department, India — Non-Resident (residential status and RNOR)
- World Bank — Remittance flows to low- and middle-income countries, 2024
- National Tax Agency, Japan — No. 2010 / No. 1935
- Ministry of Foreign Affairs, Japan — Annual Report of Statistics on Japanese Nationals Overseas, 2024
Shinya Fujimoto | Founder / Chief Strategist, Silicon Valley Japan Lab
Based in the United States for more than 25 years, Shinya draws on his experience as both an engineer and a business leader to examine how Silicon Valley technology trends can be applied to management and business development in Japanese companies.