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)
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
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