Investment Considerations for NRIs Investing in India
Many NRIs invest in India to stay connected to goals back home, such as supporting parents, buying a home or planning an eventual return. Investing from abroad is generally straightforward, but a few considerations matter more for NRIs than for resident investors, and it helps to think them through before you begin.
The first is the account you invest from. Money earned abroad and brought into India usually sits in an NRE account, while income earned in India, such as rent, usually sits in an NRO account. The account you use affects how easily money can later be moved back abroad, so it is worth deciding which money is meant for which purpose.
The second is currency. Your investment is valued in rupees, but your life may be in dollars, dirhams or pounds. Movements in the exchange rate can add to or reduce what your investment is worth in your home currency, separately from how the investment itself performs. This matters most for goals that will be spent abroad.
The third is tax in two countries. India deducts tax at source when NRIs redeem certain investments, and the country you live in may tax the same income under its own rules. Tax treaties between India and many countries can affect the final outcome. Because these rules differ by country and change over time, it is important to confirm your position with a tax professional familiar with both countries.
Finally, keep your records and status current. Some fund houses do not accept investors from certain countries, so check eligibility first. Update your residential status, address and bank details when they change, including when you return to India, and keep your nominations up to date. These are general considerations, not advice for your specific situation.
Talk to the Finglow team about investing in Indian mutual funds as an NRI, based on your risk profile and goals.