NRI Investing
nri investing
Investing in India from abroad
Non-resident investors can access most of the same categories as residents. What changes is the account the money moves through, the tax deducted before you receive it, and — for some products and some countries — whether you are eligible at all.
the account decides repatriability
Whether you can take the money back out of India later is largely settled by which account you invest from — before the first rupee moves, not after.
eligibility is not universal
Several fund houses restrict investors resident in the United States and Canada, and some structures accept only NRO money. Check before planning around a product.
at a glance
How this one behaves
A route into the categories above rather than a category of its own. Three things decide what is actually open to you.
- Who it covers
- Non-resident Indians, and OCI or PIO holders
- The account decides
- NRE is repatriable; NRO repatriation is capped and certified
- Check first
- Several fund houses restrict US and Canada residents
- Tax
- Generally withheld at source on redemption, at rates that vary
how it works
Three things decide what is open to you
First, your status. Residential status under FEMA and under the Income-tax Act are determined by separate tests and do not always give the same answer in the same year. Status follows the rules, not preference, and it governs which accounts you may hold and which products will accept you. NRI, OCI and PIO are also not interchangeable for every purpose.
Second, the account. An NRE account holds foreign earnings and is freely repatriable, so investments funded from it can generally be taken back out. An NRO account holds India-sourced income — rent, dividends, a pension, proceeds from something you owned before leaving — and repatriation from it is subject to an annual ceiling and to certification by a chartered accountant. Both are legitimate. But this is the hardest decision to unwind later, because the route the money came in by tends to determine the route it can leave by.
Third, where you live. A number of Indian fund houses decline or restrict subscriptions from investors resident in the United States and Canada, because of the reporting obligations those jurisdictions impose. This is a policy decision taken fund house by fund house, and it changes. If you are in either country, the practical question is not whether you may invest in India but which specific providers will currently accept you.
Tax is deducted differently too. For non-residents, tax on gains is generally withheld at source when you redeem rather than settled by you afterwards, at rates that vary by asset class and holding period. Where India has a double taxation avoidance agreement with your country of residence, relief may be available — but it is not automatic and depends on producing the right documentation, including a tax residency certificate. You may also have reporting obligations where you live. Coordinate with a tax adviser in both countries before you invest, not after.
Product structures differ in what they will accept, and the difference can decide the route. Portfolio management services can generally be funded from either an NRE or an NRO account. Category III alternative investment funds commonly accept NRO money only. For a non-resident investing with repatriation in mind, that single structural distinction can matter more than the relative merits of the two products.
Documentation is heavier than for a resident investor: KYC with overseas address proof, attestation requirements, FATCA and CRS declarations, and bank mandates linked to the correct account. The exact scope of what KD Finvest supports for non-resident investors is TO_BE_CONFIRMED and will be set out here in full.
risk
What can go wrong
Everything on the product pages applies to a non-resident investor too. These three are additional.
currency risk
Returns are earned in rupees. Converted back to the currency you actually spend, a good rupee return can become a poor one — or the reverse.
repatriation constraints
Taking money out of an NRO account is subject to annual limits and certification. If you may need it abroad, the account matters more than the product.
tax and reporting in two places
Tax is withheld in India at redemption, and you may owe reporting or tax where you live. Treaty relief exists in some cases but has to be claimed correctly.
faqs
Questions about investing as an NRI
Often yes, but not everywhere. A number of Indian fund houses decline subscriptions from investors resident in these two countries because of the reporting obligations attached, and others accept them only with additional paperwork or only through certain modes. It is a per-provider policy and it changes. Tell us where you are resident at the outset and we will establish what is currently open to you before anything else is discussed.
It depends on where the money came from and whether you expect to need it outside India. NRE funds are freely repatriable; NRO repatriation is capped annually and needs certification. If the money is India-sourced it belongs in NRO regardless. The point to take seriously is that this is difficult to reverse afterwards, so it is worth deciding deliberately rather than by default.
Generally yes. Unlike a resident investor, a non-resident usually has tax withheld at source at the point of redemption, at rates that depend on the asset class and how long you held it. If a double taxation avoidance agreement applies between India and your country of residence, relief may reduce that — but it must be claimed with the correct documentation in place beforehand. This is a question for a qualified tax adviser, and we would rather you asked one than relied on a website.
Your existing folios and bank mandates need to reflect your changed status — a resident account cannot simply continue once you are non-resident. This is routine but it is frequently left undone for years, and it tends to surface at the worst moment, when you are trying to redeem or repatriate. If it applies to you, it is worth putting straight before adding anything new.
Broadly the same list as a resident — mutual funds, equity, bonds, NCDs and portfolio management services — subject to provider-level eligibility and to your country of residence. Structures differ in what they accept: PMS can generally be funded from either an NRE or an NRO account, while Category III AIFs commonly accept NRO money only. GIFT City is a separate route with its own rules. Which of these is genuinely available to you is worth establishing first, because it narrows the conversation considerably.
Risk and important information
All the risks described on the individual product pages apply equally to non-resident investors, including the possible loss of capital. In addition, returns are earned in rupees and are exposed to exchange-rate movement when converted; repatriation from an NRO account is subject to annual limits and certification; tax is generally withheld at source on redemption at rates that vary by asset class and holding period; and eligibility differs by product and by country of residence, with several providers restricting investors resident in the United States and Canada. Nothing on this page is investment, tax, legal or exchange-control advice. Residential status, FEMA treatment, taxation and treaty relief depend on individual circumstances — please take qualified advice in India and in your country of residence before investing.
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