Investment in India by non resident

Q-Investment in India by non resident?

Shares of Listed Companies in India
Existing NRIs - In case NRI already holds shares, debentures or other securities of a company then such companies must be informed about the change in residential status and thus the changed overseas address. Income on such investments can be easily repatriated outside India after the payment of taxes.

New NRIs - NRIs can invest in shares (equity and preference) and convertible debentures in any listed company in India on both repatriation and non- repatriation basis subject to the following conditions:

· All the transactions should be routed through a single bank branch designated by the individual.

· Transactions should be carried out through a registered broker on a recognized stock exchange.

· Transactions should take place physically i.e. speculative transactions are not allowed.

· One NRI or all NRIs taken together cannot invest more than 5% and 10% respectively in a company.

· Investment can be made in almost all sectors except companies engaged in print media, chit fund/ nidhi, agriculture, plantation, real estate (other than real estate development) and trading of Transferable Development Rights (TDRs).

Mutual Funds

Existing NRIs - NRIs can freely hold mutual funds in India on repatriation and non-repatriation basis.

New NRIs - NRIs can invest freely in mutual funds in India on repatriation and non-repatriation basis.

Jewellery and other movable assets in India
Existing NRIs - No permission is to be taken from RBI to hold jewellery or movable assets in India. Permission should only be taken in those cases where jewellery is taken abroad so that there is no duty at the time of coming back.

New NRIs - No permission is to be taken from RBI to hold jewellery or movable assets in India. Permission should only be taken in those cases where jewellery is taken abroad so that there is no duty at the time of coming back.

Insurance policies in India

Existing NRIs - NRIs can hold insurance policies in India and pay premium thereon without any permission from RBI.

New NRIs - NRIs can hold insurance policies in India and pay premium thereon without any permission. Claims paid in foreign currency by insurance companies are permitted only in cases where the premium has been paid in foreign currency or remittance from abroad.

Credit cards in India

Existing NRIs - NRIs can continue to hold both domestic and international credit cards issued by banks in India.

New NRIs - NRIs can acquire and continue to hold both domestic and international credit cards issued by banks in India.

Borrowings in India

Banks can provide loans to NRIs in India and abroad based on their security in India for purposes other than investment in capital market and other prohibited business like agriculture, plantation, etc.

Directorship of an Indian Company

Existing NRIs - Existing NRIs can hold directorship of an Indian Company without permission from RBI. However the company should be informed about the change in the residential status along with the changed overseas address. The amount received from the company can be repatriated after the payment of taxes.

New NRIs - NRIs can act as director of an Indian Company without permission from RBI. And amount received from the company can be repatriated after the payment of taxes.

Trusteeship of a trust in India


Existing NRIs - NRIs can hold trusteeship of an Indian Company without permission from RBI. The company should be informed about the change in residential status along with the changed overseas address.

New NRIs - NRIs can act as trustees of an Indian Company without permission from RBI.

Inheritance in India

Assets can be acquired by NRIs by way of inheritance and continue to hold them without permission from RBI. Sale proceeds of assets can be repatriated abroad up to USD 1 million per calendar year without RBI permission. If the amount is in excess of the above mentioned limit then a prior approval from RBI is required.

Gifts - No restrictions are imposed on gifts by NRIs to resident Indians in foreign currency or Indian Rupees or in the form of assets. All gifts are free from tax. All that is required is an offer by the donor and acceptance thereof by the donee in black and white.

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