Investment Facilities for NRIs
There are various investment opportunities available to you as an NRI. Under the Foreign Exchange Management Act (FEMA) guidelines, you are permitted to invest in different types of securities on a repatriation basis and a non-repatriation basis. You have a number of portfolio investment schemes available to you.
- Government dated Securities/treasury bills
- Units of domestic mutual funds
- Bonds issued by a public sector undertaking (PSU) in India
- Non-convertible debentures of a company incorporated in India
- Shares in Public Sector Enterprises being divested by the Government of India, provided the purchase with the terms and conditions stipulated in the notice inviting bids
- Shares and convertible debentures of Indian companies under FDI scheme (including automatic route and FIPB)
- Shares and convertible debentures of Indian companies through stock exchange under Portfolio Investment Scheme
- Perpetual debt instruments and debt capital instruments issued by banks in India
- Government dated securities (other than bearer securities) / treasury bills
- Units of domestic mutual funds
- National plan Savings Certificates
- Non-convertible debentures of a company incorporated in India
- The capital of a firm or proprietary concern in India, not engaged in any agricultural or plantation activity or real estate business
- Deposits with a company registered under Companies Act, 1956 including NBFC registered with RBI
- Commercial Paper issued by an Indian company
- Shares and convertible debentures of Indian Companies other than under Portfolio Investment scheme
You can purchase or sell shares and convertible debentures of Indian companies on Stock Exchanges. You will have to apply to a designated branch of a bank, which deals in Portfolio Investment. All your sale and purchase transactions are to be routed through the designated branch.
- You can purchase shares up to 5% of the paid up capital of an Indian company.
- All NRIs/PIOs taken together cannot purchase more than 10% of the paid up value of the company. (This limit can be increased by the Indian company to 24% by passing a General Body resolution).
- The sale proceeds of repatriable investments can be credited to your NRE or NRO account, whereas, the sale proceeds of non-repatriable investments can be credited only to your NRO account.
- The sale of shares will be subject to payment of applicable taxes.
As an NRI you have the advantage of investing in property in India. Your investment can be made out of both your repatriable and non-repatriable funds.
- You can acquire immovable property in India, other than agricultural land / plantation property or a farmhouse, out of repatriable and non-repatriable funds.
- You are eligible to repatriate the sale proceeds of immovable property acquired in India to the extent of repatriable funds used to acquire the property, up to two residential properties. The balance will be repatriable through NRO Account subject to payment of applicable taxes.
- Housing Loan, in rupees, availed of by you from ADs / Housing Financial Institutions can be repaid by your family in India.
As a returning NRI you may continue to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India, if the currency, security or property was acquired, held or owned by you when resident outside India.
- You may open, hold and maintain, with an Authorised dealer in India, a Resident Foreign Currency (RFC) Account to transfer balances held in NRE/FCNR (B) accounts.
- The proceeds of assets held by you outside India at the time of return can be credited to your RFC account.
- The funds in RFC accounts are free from all restrictions regarding utilisation of foreign currency balances including any restriction on investment in any form outside India.