In India, over the past few decades, NRI investment has been a topic that has been very hot in the past decade, especially given the rise in FDI inflows into India. Over the past decade or two, more NRIs are looking to invest their funds in India in different asset classes. For investing a larger sum, they tend to look at real estate. Some of the other popular investment options include equity markets and mutual fund SIPs. India has many good NRI investment options. However, the main question is, which are the good ones? The answer is very simple – it’s mutual fund SIP. When it comes to investing in Indian mutual funds, there are no major constraints for NRIs. Moreover, prior approval from the RBI is also not required by the NRI investors to invest in mutual fund SIPs. Further, money invested in India through NRE account by a NRI can be easily repatriated. NRIs need to fulfil similar KYC (Know Your Customer) requirements as Indian citizens. However, the US and Canada citizens need to fulfil additional compliance requirements.
Following are some of the prerequisites for NRI investment in India that you need to know:
- Have a NRE or NRO bank account
- Fulfil the KYC requirements just like Indian citizens
- Additional FATCA disclosures
It is desirable for NRI to choose a NRE account for making mutual fund investments in India, especially if you would like to repatriate your money later on. Moreover, in case you are using an
Indian income source such as rental from Indian property, then you could choose the NRO option. However, please note that you need to choose NRO account only if your are less likely to repatriate
money in the future.
You can fulfil the KYC requirements for investing in Indian mutual funds by submitting the
- Self-attested copy of PAN card
- Self-attested copy of Passport
- Address proof (Indian and foreign)
- Passport size photograph
- KYC form
It is important for you as a NRI investor in Indian mutual funds to understand FATCA, which standsfor Foreign Account Tax Compliance Act, 2010. Any transaction involving US tax residents needs to be shared with the US government. All investors need to declare their tax residency. US and Canada based NRIs have additional compliance requirements to adhere to for investing in Indian mutual funds. The good news for NRI investors is that most large Indian asset management companies
(AMCs) accept investments from NRIs across all geographies. India is a country that provides investors with tremendous growth potential. Moreover, you can invest in Indian companies through the mutual funds route, no matter where you live on this planet. Simply open a NRE or NRO account, fulfil the KYC requirements, and get ready to become an integral part of the ever-improving India growth story.
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