Investment Facilities for NRIs
Under extant FEMA guidelines, NRIs are permitted to invest on repatriation basis in:
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Government dated Securities / treasury bills.
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Units of domestic mutual funds.
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Bonds issued by a public sector undertaking (PSU) in India.
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Non-convertible debentures of a company incorporated in India.
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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.
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Shares and convertible debentures of Indian companies under FDI scheme (including automatic route and FIPB).
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Shares and convertible debentures of Indian companies through stock exchange under Portfolio Investment Scheme.
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Perpetual debt instruments and debt capital instruments issued by banks in India.
Other Investments on non-repatriation basis.
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Government dated securities (other than bearer securities) / treasury bills.
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Units of domestic mutual funds.
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National plan Savings Certificates.
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Non-convertible debentures of a company incorporated in India.
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The capital of a firm or proprietary concern in India, not engaged in any agricultural or plantation activity or real estate business.
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Deposits with a company registered under Companies Act, 1956 including NBFC registered with RBI.
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Commercial Paper issued by an Indian company.
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Shares and convertible debentures of Indian Companies other than Portfolio Investment scheme.
Portfolio Investment Scheme for NRIs
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Under this scheme NRIs and PIOs can purchase or sell Shares/convertible debentures of Indian companies on Stock Exchanges.
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For this purpose, the NRI/PIO has to apply to a designated branch of a bank, which deals in Portfolio Investment.
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All sale / purchase transactions are to be routed through the designated branch.
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An NRI or a PIO can purchase shares up to 5% of the paid up capital of an Indian company.
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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).
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The sale proceeds of the repatriable investments can be credited to the NRE / NRO accounts of the NRI / PIO whereas the sale proceeds of non-repatriable investment can be credited only to NRO accounts.
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The sale of shares will be subject to payment of applicable taxes.