NRI investment options in India

NRI investment in India has been a very hot topic for the past decade given the increase in FDI inflows into India. More NRIs are beginning to look at parking their funds in India in different asset classes. In case they are looking to invest a larger sum, they tend to look at real estate.

How NRI can invest in India

NRI investment options in India are many, but the big question is, which are the good ones? The answer is mutual fund SIP. There are no constraints on NRIs investing in Indian mutual funds. Moreover, NRI investors don’t need any prior approval from the RBI. Further, money invested in India through NRE account by an 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.

Before understanding what the investment plan in India for NRI should be, let us check the following prerequisites for NRI investment in India:

• Have an NRE or NRO bank account
• Fulfil the KYC requirements just like Indian citizens
• Additional FATCA disclosures

Investment plan for NRI in India

It is desirable for NRI to choose an 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 you are less likely to repatriate money in the future.

You can fulfil the KYC requirements for investing in Indian mutual funds by submitting the following documents:

• 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 an NRI investor in Indian mutual funds to understand FATCA, which stands for 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 fund’s route, no matter where you live on this planet. Simply open an NRE or NRO account, fulfil the KYC requirements, and get ready to become an integral part of the ever-improving India growth story.