Abdirahman Abukar Haji Osman and the prime accused, Abdul Rahman Ibrahim, were apprehended from Humayunnagar for allegedly making fake visa entry, extension visa, passports and other documents, they said.
Police had a tip-off that some Somalis are creating fake and false residential permits and stay visas for needy foreigners and using them as originals.
Police also seized incriminating material including several duplicate rubber stamps and seal from the accused duo.
According to police, Abdi Rahmaan Ibrahim (25) was staying illegally in India.
Another accused Abdirahman Abukar Haji Osman (22) is a student of MBA (second year). He came to Hyderabad in October 2009, as per the release.
Both the accused became friends and started providing fake residential permits to the needy foreigners whose permit has expired, for huge money.