How NRIs can invest in Indian mutual funds?

Over the past few years, especially since the Modi-led BJP government came to power, and given the rise in FDI inflows into India, NRI investment in India has become a hot topic. NRIs are beginning to consider India as a lucrative investment hub. Thus, they have begun investing in diverse asset classes. India has many investment options available for NRI investors. However, the big debate is, which are the good ones. Without any shadow of doubt, Indian mutual funds have to be right up there as one of the options for NRI investors. Given that they can invest in Indian mutual funds through the SIP route, it makes it a more lucrative option.

 

 

NRI indian mutual fund

 

 

Indian mutual funds do not impose any major constraints on NRIs looking to invest in their schemes. In fact, in India, NRIs do not require the permission of RBI or any prior RBI approval. Moreover, NRIs can easily get the money that they invest in Indian mutual funds repatriated. Before investing in Indian mutual funds, NRI investors need to complete KYC (Know Your Customer) requirements similar to the one required for the Indian citizens. That said, NRIs need to note that the citizens of the US and Canada will need to fulfil additional compliance requirements for investing in Indian mutual funds.

 

The three major pre-requisites for NRIs for opening a mutual fund SIP or for investing in a mutual investment plan in India are:

  • NRIs need to have either a NRE or NRO bank account in India
  • They will need to fulfil the KYC requirements just as the Indian citizens do
  • They will be required to make additional FATCA disclosures

 

For investing in a mutual fund in India, it is highly desirable for NRI investors to do it using their NRE account. This facilitates much more efficient repatriation of their invested funds at a later date. Let’s quickly scan through the documents NRI investors need to submit for fulfilling their KYC requirements for investing in Indian mutual funds. Here we go:

  • Self-attested copy of PAN card
  • Self-attested copy of Passport
  • Address proof (Indian and foreign)
  • Passport size photograph
  • KYC form
  • In case of Foreign Passport holder, copy of PIO (Person of Indian Origin) card is required.

 

Being a NRI investor looking to invest in Indian mutual funds, you need to know and understand FATCA (Foreign Account Tax Compliance Act, 2010). Moreover, if you are a US citizen, the US government requires you to share with them any transaction that you are involved in. It is crucial for all investors to declare their tax residency.

If you are a NRI who is a citizen of US or Canada, you will have to adhere to additional compliance requirements for making an investment in Indian mutual funds. Most large AMCs accept NRI investments from across different regions of the world.

 

To know more about NRI investment in Indian mutual funds and the best scheme options, write us at nrihelpdesk@acm.co.in

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