NRI Corner

NRI Corner – Your Gateway to Mutual Fund Investments in India

Welcome to the NRI Corner of mutualfundsadda – your trusted partner for investing in Indian mutual funds from anywhere in the world. We help you stay connected with India’s growth story while managing your investments seamlessly and compliantly.

However, NRIs are required to comply with all regulatory requirements such as completion of KYC before investing. Also, a few countries such as US and Canada have certain restrictions on investments by NRIs in Mutual Funds without relevant disclosures. Hence, NRIs from these countries must check with their Mutual fund distributor before investing in Indian funds.

Why Should NRIs Invest in India?

India continues to be one of the most attractive investment destinations for NRIs. Here’s why:

India’s Strong Economic Growth: India is one of the fastest-growing major economies in the world, offering attractive long-term growth prospects and robust financial markets.
High Return Potential: Indian mutual funds, especially equity funds, have historically delivered strong returns compared to many developed markets, making them a compelling choice for capital growth.
Rupee Appreciation Potential: Long-term appreciation in the Indian Rupee can enhance overall returns when funds are repatriated in foreign currency.
Diversification: Investing in India helps NRIs diversify their global portfolio by including exposure to emerging markets and domestic sectors.
Professional Fund Management:NRIs gain access to funds managed by seasoned professionals and top-rated Asset Management Companies (AMCs), backed by SEBI regulation.
Transparent and Well-Regulated Market: India’s mutual fund industry is regulated by SEBI, ensuring investor protection, transparency, and adherence to global compliance norms.
Tax-Efficient Investment: Certain mutual fund categories offer tax-efficient growth, and NRIs may also benefit under Double Taxation Avoidance Agreements (DTAA) depending on their country of residence.

Repatriation

As an NRI, you can invest on either on a repatriation basis or a non-repatriation basis. Repatriation implies that you can transfer your investment capital, dividends and returns out of India. Non-repatriation implies the opposite, that is, your investment capital, dividends and returns cannot be transferred outside India.

You can have three kinds of bank accounts in India. You can open all these three accounts with any bank in India and the accounts can be used to make investments in India.

Non-Resident External Rupee account (NRE account): Funds from an NRE account can be repatriated abroad.

Fully Convertible Non-Resident account (FCNR account): The FCNR account involves a fixed deposit in a foreign currency. Funds from this account can be repatriated abroad. However, this account cannot be used for investing in a foreign currency.

Non-Residential Ordinary account (NRO account): Funds from an NRO account cannot be repatriated abroad.

It must be noted that income and redemption amounts can be repatriated only if you continue being an NRI at the time of repatriation. Also note that you cannot invest in foreign currency; in other words, your investments in Indian mutual funds must be made in Indian rupees.

How Can NRIs Invest in Indian Mutual Funds?

Investing in Indian mutual funds as an NRI is simple when the right process is followed. Here’s a step-by-step guide:

Step 1: Open an NRE/NRO Bank Account
To invest in India, NRIs must have either of the following Indian bank accounts:
- NRE (Non-Resident External) Account: Fully repatriable
- NRO (Non-Resident Ordinary) Account: Repatriation permitted with limits
Note: Investments cannot be made from foreign bank accounts.
Step 2: Complete KYC & FATCA Compliance
You need to complete your Know Your Customer (KYC) formalities, which includes:
- PAN Card
- Passport (with visa/PIO/OCI details)
- Overseas address proof
- Recent passport-size photograph
- In-person verification or video KYC (depending on AMC/distributor)
- FATCA declaration form
Step 3: Choose Investment Mode
You can invest:
- Online: through our secure portal (paperless onboarding & transactions)
- Offline: via physical forms submitted to your mutual fund distributor or AMC
Step 4: Select the Right Fund
Choose from a wide range of schemes based on your:
- Investment goals
- Risk profile
- Time horizon
- Repatriation preference
Our expert advisory team is available to help you with customized suggestions.
Step 5: Start Investing
You can invest via:
- Lumpsum Investment
- SIP (Systematic Investment Plan)
- SWP (Systematic Withdrawal Plan)
- STP (Systematic Transfer Plan)
Step 6: Repatriate Your Funds
Redemption proceeds can be repatriated easily based on the type of account (NRE/NRO) used for investment. TDS may apply based on fund category and holding period.
TDS may apply based on fund category and holding period.

Disclaimer

The above information is provided for basic guidance for investments in mutual funds and is based on provisions of the Income-tax Act, 1961, as sought to be amended by the Finance Bill, 2022. The tax implications may vary for each assessee based on the details of his income. All rates and figures appearing are for illustrative purposes only. Tax benefits are subject to change in tax laws. Contents of this note have been drawn for informative purpose only and it is neither a complete disclosure of every material fact of Income-tax Act, 1961 nor does it constitute tax or legal advice. The AMC/Trustee/ Sponsor accept no liability whatsoever for any direct or consequential loss arising from any information provided in this note. Investors are advised to consult their tax advisor before taking any investment decision.