NRI Real Estate and Property Investment in India
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Invest in Indian Equities

How popular is investment in real estate and stocks and shares among NRIs?
Non-resident Indians are increasingly inclined towards ploughing back redemption proceeds from various NRI deposit schemes and investing them in real estate and stock markets. They are picking up equity stakes in Indian companies and form a major component of the country's foreign direct investment (FDI).

What basics should be kept in mind to invest for long term in equities?
Knowing your time horizon of investment, risk and return expected on the investment and scrutinizing your overall financial position and long term goals before investing is the key to a wise investment.

What are the chosen routes through which NRIs can invest in India?
Equities, Property and Mutual Funds are the three most sustaining ways for an NRI to invest.

Why are mutual funds considered to be the best way to enjoy the benefits of investing in Indian equities?
Mutual funds are managed by professionals who know the nitty-gritty of it. Local broker can be unreliable.

Is approval for RBI required to invest in mutual fund scheme?
For an NRI, no specific approval for investing or redeeming from mutual fund is required. Only OCBs and FIIs require approvals for it.

Can government securities/ UTI units be transferred or sold?
Yes, provided the transfers/sales are arranged through an authorized dealer. Repurchase can be done directly by UTI.

Can proceeds of National Saving Certificate or government securities be repatriated?
Sale/maturity of proceeds of such securities can be repatriated if the purchase was made out of funds remitted from abroad or out of NRE/FCNR accounts. In case of the purchase being made out of NRO accounts, it can only be credited to NRO accounts and cannot be remitted abroad.

What is Portfolio Investment Scheme?
The Portfolio Investment Scheme allows NRIs to acquire shares/debentures of Indian companies or units of domestic Mutual Funds through the stock exchange(s) in India.

Is there any ceiling on investment under the Portfolio Investment Scheme?
There is an overall ceiling of 5% of paid-up share capital of the company/paid-up value of each series of convertible debentures for purchase by NRIs/OCBs. However the ceiling can be raised to 24% if the company concerned passes a resolution to that effect in its general body meeting.

NRIs/OCBs can make investment up to 1% of the paid-up share capital/each series of convertible debentures. For domestic mutual funds, there is no ceiling.

What specific conditions need to be fulfilled for investing in mutual funds schemes on repatriable basis?

In order to invest on a repatriable basis, you must have an NRI or FCNR bank account in India. The mutual fund should comply with the terms and conditions stipulated by SEBI, the amount representing investment should be received by inward remittance through normal banking channels or by debit to NREAccount/ FCNR account of the NRI. The dividend/interest of units may be remitted through normal banking channels or credited to NCR/FCNR account of the investor.

When can earnings on investments be repatriated?
For investments made on a repatriation basis, the net income or capital gains after tax arising out of investment is eligible for repatriation subject to regularity guidelines at the time of the repatriation. In the case of investment is made on a non-repatriation basis, only the net income, i.e., dividend arising out of investment is eligible for repatriation.

Can loans be granted abroad against collateral of the shares/debentures of Indian companies?
Yes. Authorized dealers have the power to grant loans/overdrafts abroad to NRIs through their overseas branches and correspondents against collateral of the shares/debentures of Indian companies only if the concerned shares/debentures were acquired on repatriation basis

For how long is the permission valid for buying shares/debentures and units of domestic mutual funds?
Approval from the Reserve Bank is valid for a period of five years from the date of issue. This can be renewed by a request by means of a simple letter.

What if these rules are all too hard?
You can invest overseas through a local share trading platform https://www.sharetrading.hsbc.com.au/tradenow/

 

 

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