Investment opportunities in INDIA for NRI/ PIO/ OCI/ HNI

Investment opportunities in INDIA for NRI/ PIO/ OCI/ HNI

 

India is one of the fastest-growing options for both internal and external investments on account of massive industrial developments in last two decades. The country of India provides not only opportunities to invest in successful businesses but also provides a high return at relatively low risk. The Indian Government is making the country more conducive for business and offering adequate stability and flexibility to the investors. This has prompted the non-resident Indians (NRIs) to consider India a viable destination to invest.

The financial markets are volatile and are subject to lots of ups and downs. Thus, end-to-end research becomes essential before making any investment decision. The array of best investment options for NRIs is very diverse and lucrative. Hence, your investment decision should depend on following key parameters:

Risk appetite

Liquidity requirement

Financial goals

Expected returns

Investment Opportunities in India:

If you are looking for investment opportunities in India as an NRI or a PIO or HNI, here is everything you need to know:

 

Different types of accounts which can be maintained by an NRI/PIO in India:

As per Reserve Bank of India (RBI) there are three types of banks accounts that can be maintained by an NRI / PIO in India.

·      Non-Resident Ordinary Rupee Account (NRO Account) : Any person resident outside India may open an NRO account with an authorized dealer or an authorized bank for the purpose of putting through a bona fide transaction in rupees. Opening of accounts by individual/ entities of Pakistan and entities of Bangladesh require prior approval of Reserve Bank of India. NRO accounts may be opened / maintained in the form of current, savings, recurring or fixed deposit accounts.

·      Non-Resident (External) Rupee Account (NRE Account) : NRE account may be in the form of savings, current, recurring or fixed deposit accounts (with maturity of minimum one year). Such accounts can be opened only by the NRI/PIO himself and not through the holder of the power of attorney. NRIs may be permitted to open NRE account with their resident close relatives (relative as defined in Section 6 of the Companies Act, 1956) on ‘former or survivor ‘basis. The resident close relative shall be eligible to operate the account as a Power of Attorney holder in accordance with the extant instructions during the life time of the NRI/PIO account holder.

·       Foreign Currency Non Resident (Bank) Account – FCNR (B) Account : FCNR account stands for foreign currency non-resident bank account wherein a non-resident individual of Indian origin can maintain a fixed deposit in foreign currency and earn regular interest in the same.

 

All PIOs have the same rights and same rules apply to them as NRIs.

Popularly opted investment options by NRIs/ PIOs/ HNIs are discussed below:

Fixed Deposits:

Bank Fixed Deposits are considered the safest option for investment as there are rare instances of banks defaulting on them. Investing in Fixed Deposit is not only popular among the residents in India but also an attractive investment scheme for the NRIs. NRIs can start fixed deposit with their FCNR, NRO, or NRE accounts. Amounts invested in NRE and FCNR deposits are tax free. Generally, you can expect to earn interest between 5% to 7% depending on the bank, amount deposited and tenure of deposit from NRE and NRO deposits.

Bonds:

NRIs are also permitted to invest in some government securities, treasury bills, exchange traded funds, bonds issued by public sector undertakings and infrastructure debt funds, listed non-convertible debentures, redeemable preference shares, debentures, national plan/saving certificates, debt instruments issued by banks etc. either on repatriation basis or non-repatriation basis. The tax implications would vary with the type of instruments.

 

Mutual Fund investment:

Mutual funds are a large pool of money that is managed by a professional. They are used for investment by professionals and yield a high return as compared to fixed deposits. NRIs and PIOs residing abroad have been granted a general permission by Reserve Bank of India Schedule 5 of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 for investing in / redeeming units of the mutual funds subject to conditions set out in the aforesaid regulations. NRI/PIOs can invest in mutual fund schemes in India and it requires no special approval from the RBI. Investments by NRIs in Mutual Funds can be made on a repatriable or on a non-repatriable basis, as preferred by the investor. For investments on repatriable basis NRI/PIOs must have either NRE account or FCNR account with a bank in India. In this case, investments are routed through usual banking channels or remitted from NRE/FCNR account of the investor. Investments can be made on non-repatriation basis from funds held in NRO account or NRE/FCNR account.

If you are looking for an actual professional to handle your mutual fund investment and manage statutory compliances, look no further than Onestop NRI Advisory. 

Investment in shares and debentures:

NRI/PIOs can purchase shares and debenture in India. NRI/PIOs can buy shares and debentures issued by Indian companies through stock exchanges, under the Portfolio Investment Scheme (PIS) on repatriation and /or non-repatriation basis. The PIS is a scheme of the Reserve Bank of India (RBI). For this purpose, NRI/PIOs have to apply to a designated branch of a bank, which deals with portfolio investments. All sale/purchase transactions are to be routed through the designated branch. As per the RBI guidelines, NRI/PIOs willing to invest in shares/debentures in India need to approach the designated branch of any authorized dealer (bank) who administer the PIS to open a Non Resident External (NRE)/Non Resident Ordinary (NRO) account to route investments.

 

Real Estate:

You can never go wrong with real estate in the long run, especially in a country like India. The prices of real estate have only risen forever and are expected to rise even more in the upcoming years. For a high-profit yield over multiple years, many HNIs have already invested in dozens of homes and even commercial premises. 

For an individual that lives outside India, it might be difficult to find a good location with good investment opportunities. Locals are the most knowledgeable about a certain location. Onestop NRI advisory will carry out all due diligence on your behalf for buying, selling and even renting the perfect real estate home or commercial premises for you.

Non-resident Indians (NRI / PIO) do not require any permission from the Reserve Bank of India to acquire residential or commercial property in India. Also, there are no restrictions in the number of residential / commercial properties that NRI/PIOs can buy in India.

 

Setting up business Ventures:

PIOs and OCIs can set up business ventures in India. They are allowed to set up a Limited Liability Company (LLC) or a Limited Liability Partnership (LLP) form of company. The requirements of setting up a company in India can be found at http://www.mca.gov.in The Reserve Bank of India (RBI) guidelines for establishment of liaison / branch /project offices in India by foreign entities can be found at http://www.rbi.org.in 

Can a Power of Attorney invest on behalf of the NRI investor?

Yes, in cases such as investments in residential or commercial property, units of mutual fund, a power of attorney (POA) has the authority to invest on behalf of the NRI investor. The POA can also sign documents for initial and additional purchases along with redeeming units of mutual fund. A copy of the power of attorney should be notarised with the Indian consulate in the respective country which will provide authenticity on their behalf for such investment in India. At the time of applying for such purchase the POA holder needs to submit the original POA or a duly notarized copy. The Power of attorney should contain the signature of both the NRI Investor and the POA holder. Only when the POA is registered, the POA holder has the right to transact on behalf of the NRI investor and his signature is verified before processing any transaction.

Can NRIs avail loans against their bank accounts in India? If yes, then for what purposes?

NRIs can avail loans against securities held in NRO, NRE and FCNR account without any ceiling subject to the usual margin requirements. Loans can be availed for personal use, buying house or business purpose.

What makes Onestop NRI Advisory your Ideal Family Office Management Partner?

Away from your homeland, don’t have time to manage responsibilities back home? Need cost-effective services? No fear when we are here as your representative.

Onestop NRI Advisory can help you with any problem related to investment of your funds. NRIs and PIOs need not worry about their investments, properties, insurance, taxation planning, medical tourism, travel plans, family support, children's education, succession planning and legal assistance back home. Stay secured with us, sit back and enjoy our services that will make your life hassle free.

Onestop NRI advisory has a professional team who has good hands on experience dealing with numerous clients. Our advisors are equipped to assist you to grab investment opportunities or solve issues if you are in a trouble with regard to your investments. Onestop NRI advisory team communicates with you on a regular basis, understands your expectations and provides you with realistic solutions to meet your objectives. We prioritize customer satisfaction.

We hope that you will find us a great resource to invest in your homeland and manage your responsibilities back home by choosing our services for a hassle free experience. We will provide you with best answers to all your concerns.