In this article we take a brief look at investing in Indian Mutual Funds from the perspective of an NRI. This will guide you through the dos and don\u2019ts of Mutual Fund investing, redemption procedures approvals etc.<\/p>\n
The most common question is Can an NRI invest in Mutual Funds? The answer to this question is \u2018YES\u2019<\/em><\/strong>. \u00a0NRI can invest in Mutual Fund in Indian rupees via their NRE or NRO account.<\/p>\n There is no mandate by SEBI or RBI restricting NRIs from investing in Indian Mutual Funds. Hence, no approvals are needed for NRI to invest.<\/p>\n Most of the Mutual Funds have online platforms to buy\/sell the units. NRI after complying with all the requirements should be able to buy the Mutual Funds online from any AMC. Except if you are a resident of US or Canada.<\/p>\n Many AMCs do not allow<\/strong> investment in Indian mutual funds for NRIs based out of US\/Canada. The reason is that mutual fund companies are subject to the regulatory constraints placed on them by the Securities and Exchange Commission (SEC) of the US, and are also bound by other stipulations, such as the Foreign Account Tax Compliance Act (FATCA) regulations. So only those AMCs who comply with these regulations can offer their funds to US\/Canada NRIs. These currently are :<\/em><\/strong><\/p>\n You may need to find out any extra requirement you need to fulfil to continue your investments.<\/p>\n Redemption is similar to the normal redemption process applicable for resident Indians. Redemption proceeds would be paid to the investor either through cheques or credit directly to the investor\u2019s NRE\/NRO account from which the investment was made. This means that when you invest through your NRE account you will be able to repatriate the money in full after paying the tax on the dividends and\/or capital gains that you have earned. If you made the investment from your NRO account, tax liability remains the same but repatriation is governed by NRO accounts rules.<\/p>\n Investors are advised to contact their banks\/tax consultants if they desire remittance<\/strong> of the income distribution on units abroad.<\/p>\n An indexation benefit is available, if units are held for more than 12 months or the prescribed time for that particular asset.<\/p>\n NRIs may make a nomination and also be nominees in folios of mutual funds.<\/p>\n There are roughly 350 Equity Mutual Funds in the market. Selecting the right ones can be pretty complicated. Since we cannot handle complicated stuff, we resort to simpler measures even if they are incorrect and inadequate eg selecting a fund based on the highest past returns. This way of selecting funds by looking at past returns is like driving a car looking at the rear view mirror. It\u2019s misleading, inadequate and risky.<\/p>\n You need to know the right way of investing in mutual funds that is easy to use!<\/strong><\/span><\/p><\/blockquote>\n See this video and in a few minutes you will know the answers to these 3 very important questions. It will change the way you invest in equity mutual funds.<\/p>\n2. US\/Canada NRI can invest only with a few AMCs:<\/strong><\/h2>\n
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3. Redemption of Mutual Funds units :<\/strong><\/h2>\n
4. Indexation Benefit :<\/strong><\/h2>\n
5. Nomination Facility:<\/strong><\/h2>\n
How to invest in the Right Mutual Funds using Moneyworks4me?<\/strong><\/a><\/h2>\n
We designed the MoneyWorks4me Decision Maker based on this need. It answers 3 essential questions:<\/h4>\n
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