How Can NRIs Invest in Mutual Funds?

Mutual funds are the most suitable and flexible option for Non-Resident Indians (NRIs). Investing in mutual funds not only grows your wealth across foreign lands but also lets you take advantage of the booming economy. But first - can NRI invest in mutual funds in India, and how? This article will guide you through the process.

Can NRIs Invest in Mutual Funds in India? 

Yes, Non-Resident Indians (NRIs) can invest in mutual funds in India, as per the Foreign Exchange Management Act (FEMA). However, if you live in the US or Canada, some mutual fund houses may have restrictions, so it's best to check before investing. 

Steps for NRIs to Invest in Mutual Funds in India

Thinking, "How can NRIs invest in mutual funds in India?" Follow these steps:

1. Open an NRI Bank Account: NRIs can invest through a: 

• Non-Resident External (NRE) account: Ideal for investing foreign income. Full repatriation of the principal is allowed.

• Non-Resident Ordinary (NRO) account: Ideal for investing income earned in India. You can transfer up to $1 million abroad per financial year, provided you submit Form 15CA and 15CB.

2. Complete KYC (Know Your Customer): Submit essential documents such as:

• Recent passport-size photograph 

• Passport

• PAN card 

• Indian and overseas address proof

• FATCA declaration (especially for US/Canada-based NRIs)

NRIs can complete KYC through:

• Online platforms offering e-KYC 

• Attestation via an embassy or notary, if done offline.

3. Choose a mode of investment: NRI investment in mutual fund can be done via:

• Asset Management Company (AMC) website

• A Power of Attorney (PoA)

• Online platforms for self-investment

4. Select a mutual fund scheme: For mutual funds investment by NRI in India, you need to choose mutual funds based on their: 

• Risk profile

• Investment goals

• Time horizon 

If you're wondering how to invest in SIP:

• Log in to your AMC or platform

• Pick a mutual fund 

• Set SIP frequency

• Link NRE/NRO account

• Start investing from ₹500 onwards

Understand Tax Implications 

The following table summarises the tax implications:

Make sure to claim for TDS under DTAA (Double Taxation Avoidance Agreement), if the country you reside in has an agreement with India.

Tips for NRI Investing in Mutual Funds  

Before you start investing, here are a few tips for how can NRIs invest in mutual funds:

• Start early for rupee cost averaging 

• Check AMC eligibility (especially if in the USA/Canada) 

• Link your NRE/NRO account for smooth transactions.   

Conclusion

Can NRIs invest in mutual funds India? Absolutely. Although the initial process may take some effort, the long-term benefits are well worth it. 

To learn more about mutual funds and other investments, download the Tata Capital Moneyfy app or visit our website today!