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An NRI’s approach to investing in India

  • As an NRI, if his time zone varies and he cannot keep up with day-time trades, he can execute AMOs (after-market orders). With AMOs, you can even execute orders once the market closes until the next morning, when it opens.
  • Process for opening the account of NRI:

    Open an NRE/NRO account:

  • Having an NRE (non-resident external) or NRO (non-resident ordinary) bank account is mandatory for an NRI looking forward to invest in India. NRE and NRO bank accounts are basically Rupee accounts for NRIs where the latter can park their foreign funds. These accounts are similar in terms of operations but offer different repatriations on interest and the amount in the account. Thus, based on the requirements, you can open an NRE or an NRO account with any bank by submitting all required KYC (Know your customer) documents.
  • Get a Permanent Account Number (PAN)

  • A PAN card can be obtained from the Income Tax department right at your doorstep. All one needs to do is file an application and submit it with the required documents and proofs. This can just as easily be done online. PAN is required not only to make investments but also for tax-related matters.
  • Get a PIS permission letter

  • Under the PIS (portfolio Investment Scheme), the RBI (Reserve Bank of India) allows NRIs to invest in the shares of Indian companies. For this, a PIS permission letter from the RBI, which allows you to invest in stock-related assets, is required. This procedure aims to ensure regulatory monitoring of the concerned NRI’s investments.
  • Declare a mandate holder

  • You would need to fill and sign the “Appoint a Mandate” form to appoint a local person to take care of his NRE account. This person in question will also be required to sign the mandate. A mandate can manage cheque books (issue/draw cheque), making payments, use ATM cards, make deposits, etc., on the primary investor’s behalf.
  • Execute a Power of Attorney (PoA)

  • After signing a power of attorney, the concerned person will get the powers to make and redeem your investments and manage the paperwork on his behalf.
  • Open demat and trading accounts

  • Finally, You will have to open demat and trading accounts with SEBI registered brokers to invest in the Indian markets. To open these accounts, you need to submit KYC documents along with service charges.
  • Research and invest

  • Once the demat and trading accounts have been opened, you will be able invest in Indian capital markets through direct equities, buy selected bonds and convertible debentures, as well as invest in ETFs (exchange-traded funds) and mutual fund portfolios. As an NRI, if his time zone varies and he cannot keep up with day-time trades, he can execute AMOs (after- market orders). With AMOs, you can even execute orders once the market closes until the next morning, when it opens. This will give you ample time to make an analysis.
  • Things to Note Before you Start Your Investments

    • It is mandatory for Investor to open NRE PIS bank account with the Designated Bank for investment made on repatriation basis and obtain PIS Permission.
    • NRIs can purchase upto a maximum of five percent of the paid up capital of a company.
    • NRI cannot purchase the shares of the Indian company under banned status.
    • Purchases of shares in caution script of the particular Indian company will require prior approval of the RBI.
    • NRIs cannot sell without taking delivery of the shares debentures purchased. Short selling is not permitted under PIS.
    • NRIs can assign only one Designated Bank for the purpose of routing the transactions under PIS for NRE NRIs cannot maintain NRE and NRO accounts under PIS with different authorised dealers.

    NRI Documents Checklist

  • Passport, Visa, PAN, Overseas Address Proof, PIS (Permission Letter), Proof of Bank Account

  • It is not that difficult to invest, but you just need to complete the required formalities with us I Cap Financial Service:

  • Open NRE/NRO/PIS Bank Account

  • Open Demat and Trading account