Investment in shares, securities and mutual funds
We strongly recommend planning your investments in India considering the tax and FEMA implications.
Frequently asked questions
What is the Portfolio Investment Scheme (PIS)?
How can NRIs invest in shares in India?
Can NRIs undertake PIS transactions through their existing NRE/NRO a/c?
Can NRI/ invest in other securities?
Units of domestic mutual funds.
Bonds issued by a public sector undertaking (PSU) in India.
Shares in Public Sector Enterprises being disinvested by the Government of India.
Bonds/ units issued by Infrastructure Debt Funds
Listed Non-convertible/ redeemable preference shares or debentures
Is there any ceiling on the investments under PIS?
NRIs can invest on repatriation basis under PIS route up to 5 per cent of the paid- up capital/ paid-up value of each series of convertible debentures/ paid-up value of each series of convertible preference shares/ paid-up value of each series of warrants of Indian companies.
The aggregate paid-up value of shares/ convertible debentures/ convertible preference shares/ warrants purchased by all NRIs cannot exceed 10 per cent of the paid-up capital of the company/ paid-up value of each series of convertible debentures/ convertible preference shares/ warrants of the company.
The aggregate ceiling of 10 per cent can be raised to 24 per cent, if the General Body of the Indian company passes a special resolution to that effect.
How are payments to be made by NRI for shares purchased on stock exchange on repatriation basis?
Does a NRI need any RBI permission to open a demat account?
No permission is required from RBI to open a demat account. However, credits and debits from demat account may require general or specific permissions as the case may be, from designated ADs.
How are payments to be made by NRI for shares purchased on stock exchange on non- repatriation basis?
How can NRI/PIO remit sale proceeds?
Is there any tax obligation on sale of shares?
Can a NRI trade in shares without taking delivery of the shares?
It is mandatory for NRI to take delivery of shares purchased and give delivery of shares sold.
An NRI wants to sell his shares to another NRI. Is he required to obtain any permission from RBI for the same?
Can NRIs transfer their shares/ debentures/ bonds held on non-repatriation basis to residents freely?
A Resident wants to gift equity shares of an Indian Company to his daughter, who is a NRI. Is he permitted to do so?
Name and address of himself and his daughter and the relationship that they share.
Reasons for making the gift
Certificate from the Indian Company concerned certifying that the proposed gifting is in accordance will the FDI regulations.
Other documents as may be specified by RBI from time to time.
RBI may permit such a transfer only after evaluating the merits of the case.
In case a Resident Indian becomes a NRI, will he be required to change the status of his holding from Resident to NRI?
Can Indian Companies borrow from NRIs?
No. As per provisions of FEMA, Indian Company is not permitted to avail loan from a NRI. Alternatively, NRIs can provide deposits to an Indian company or invest in the Non-convertible Debentures offered by the Company.
Can NRI subscribe to public issues? What are the permissions/approvals required?
Does an NRI require any permission to receive bonus/rights shares?
What are the eligible capital instruments for FDI?
Can NRI invest in units of an Investment Vehicle?
NRIs can invest in units of Investment Vehicle which includes Real Estate Investment Trusts [REITs], Infrastructure Investment Trusts [InvITs] and Alternative Investment Funds [AIFs].