There are various investment options for NRIs based out of Singapore to invest in India. Whether it’s managed farmlands, mutual funds, stocks, commercial real estate or government bonds, there are plenty of choices to suit different investment goals and risk appetites of investors. In this blog, we will take a closer look at the top 5 investment options for NRIs from Singapore and discuss in detail about them.
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Who is an NRI Investor?
According to the Section 6 of the Income Tax Act, an Indian citizen who does not meet the below-mentioned criteria is considered a non-resident Indian or an NRI:
- If an individual resided in India for a period of 182 days or more during the previous year; or
- If he/she lived in India for a period of 60 days or more during the previous year and 365 days or more during 4 years immediately preceding the previous year.
However, you must be aware of new rules for NRIs as the rules to determine the residential status of an individual changes over time.
India offers a range of NRI investment options. NRIs from Singapore can explore any of the NRI investment plans described below.
5 Investment Options for NRIs from Singapore
Given below are the 5 best investment options in India for NRIs from Singapore with varied investment goals:
- NRI Mutual Funds
NRIs from Singapore can invest in mutual funds in India. These mutual funds are offered by various fund houses and are regulated by the Securities and Exchange Board of India (SEBI). They can be an ideal option for Singapore-based NRIs to diversify their portfolio. As compared to fixed deposits or national pension schemes, mutual funds are a little riskier, but offer more attractive returns. NRIs can select funds according to their risk profile and future goals. There are several mutual funds for NRIs in Singapore. They can take a look at them and decide which one suits their investment needs.
- Procedure to Invest in NRI Mutual Funds
- NRIs need to make sure that they provide the essential KYC information and documents when they submit their mutual fund application. Additionally, the fund house might request a physical verification, which can be completed by visiting the Indian Embassy located in the applicant’s country of residence.
- NRIs can also invest in MFs in India by appointing a Power of Attorney (PoA) holder. A PoA is authorized to make investment decisions on the behalf of NRIs and can invest in mutual funds. However, while investing mutual funds, one must make sure that the KYC documents consist of the signatures of both the NRI investor and the PoA holder.
- NRIs from Singapore can also invest in Mutual Funds in India in a few simple steps using the SBNRI app.
- Commercial Real Estate
Commercial Real Estate refers to properties that are used for business purposes, such as office buildings, retail stores, warehouses, and other similar properties. For NRIs from Singapore, investing in commercial real estate can be a viable option. Commercial properties provide opportunities for good returns and diversification of investment portfolio. However, NRIs need to comply with certain regulations and guidelines set by the Reserve Bank of India (RBI) while investing in commercial real estate in India.
- Procedure to Invest in Commercial Real Estate
Singapore-based NRIs can invest in commercial real estate in India through the following ways:
1. NRIs have the option to invest in commercial real estate in India either by buying a property in their name using inward remittances from abroad or through funds held in NRE/FCNR(B) accounts.
2. NRIs from Singapore can also invest in Real Estate Investment Trusts (REITs) in India. Regulated by the Securities and Exchange Board of India (SEBI), REITs are investment instruments that enable investors to invest in income-producing properties without having complete ownership of the property. These vehicles offer NRIs a convenient way to invest in commercial real estate with lower risks and higher liquidity.
3. NRIs can also invest in Commercial Real Estate through fractional ownership. With fractional ownership in commercial real estate, individual investors can get partial ownership in Grade-A commercial properties. They can start by investing as low as Rs. 10 lakh investment amount.
Investors purchase stocks, which are a form of security, to acquire an ownership share in a company with the expectation of an increase in their value over time. NRIs residing in Singapore can invest in Indian stocks using the Portfolio Investment Scheme (PIS) of the RBI, or through repatriable basis or or through Non-PIS on non-repatriable basis. Investing in a variety of stocks can help diversify NRI investor’s portfolio, reducing the overall risk of loss.
- Procedure to Invest in Stocks
NRIs in Singapore can invest in stocks in India through the following ways:
1. NRIs can invest in Indian equities and debentures of Indian companies on a recognized stock exchange under the Portfolio Investment Scheme (PIS). For this, NRIs will need to open a PIS account with a designated bank and link it to their NRE/NRO account.
2. NRIs have the option to purchase and sell equity shares, mutual funds, and IPOs of Indian companies on a repatriable or non-repatriation basis through a PIS and Non-PIS account. To do so, they need to link their NRE/NRO bank account to their Demat account. NRIs can transfer funds from their NRE/NRO account to their Demat account and place orders for buying and selling stocks on Indian stock exchanges once the funds are successfully transferred.
3. They can also invest in Indian stocks through mutual funds.
- NRI Fixed Deposits
The most common investment option for NRIs is NRI Fixed Deposits. FDs are one of the safest ways to invest and earn fixed income over a pre-set period of time. There are three types NRI Fixed Deposit Accounts:
- Non-Resident External (NRE) Account
- Non-Resident Ordinary (NRO) Account
- Foreign Currency Non-Resident (Bank) [FCNR(B)] Account.
- Procedure to Invest in FDs
Singapore-based NRIs can open an FD account through mobile or internet banking:
- There are many Indian banks providing the highest Fixed Deposit Rates in India for NRI on NRI FDs. NRIs just need to open their NRI account and log in to their internet or mobile banking platform. Then, they need to select ‘NRI Fixed Deposits’ from the ‘Deposits’ menu. After this, they have to enter the deposit amount and select their funding account.
- NRIs living in Singapore can also invest in Fixed Deposits through SBNRI app. It will also guide you through the basic calculation of returns based on your investments. It has a team of experienced individuals that will give you insights on how to maximize your returns.
- Managed Farmlands
NRIs from Singapore can invest in managed farmlands in India. These are agricultural lands that are owned by individuals or organizations, but are managed and maintained by a specialized firm. NRIs can invest in managed farmlands through Growpital.
- Procedure to Invest in Managed Farmlands
Given below are the steps that NRIs can follow in order to invest in managed farmlands in India-
- To invest in managed farmlands, NRIs can visit an online platform and create an account there. Then, they have to complete the KYC formalities by providing their bank account information, PAN, and Aadhaar number. After completing the registration process, NRIs can choose an investment plan that aligns with their investment objectives and select the desired number of units to purchase. NRIs can initiate their investment by depositing the required funds and submitting the necessary documents. The interest amount will be directly credited to the NRI’s bank account.
- SBNRI has a partnership with Growpital. Singapore-based NRIs can invest in managed farmland in India through SBNRI app.
To sum up, NRIs living in Singapore have a plethora of investment options in India to choose from. Fixed deposits, mutual funds, equity shares, and commercial real estate are some of the most popular investment options for NRIs. With proper research and planning, NRIs in Singapore can make profitable investments in India and take advantage of the country’s growing economy.
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Yes, there are a few tax-free options like NRE FD Account, FCNR FD Account, ELSS Funds, Managed Farmlands and Life Insurance that are available for NRIs in India.
RBI issues government securities in the form of bonds to NRIs (non-resident Indians) who want to invest their money in India.
Given below are the benefits of commercial real estate investment in India for NRIs:
High rental yields: Commercial real estate in India typically offers higher rental yields compared to residential properties. This can provide a stable and attractive source of income for NRI investors.
Capital appreciation: Commercial properties in India can also appreciate in value over time, providing potential capital gains for investors.
Diversification: Investing in commercial real estate can help to diversify an NRI’s investment portfolio outside of their home country, reducing overall investment risk.
Favorable demographic trends: India’s growing economy, increasing urbanization, and rising middle class are driving demand for commercial real estate in various sectors such as office spaces, retail malls, and logistics parks.
Potential for long-term leases: Commercial properties in India often have long-term lease agreements, providing a steady stream of rental income for NRI investors.
Tax benefits: NRIs investing in commercial real estate in India can take advantage of various tax benefits, such as tax deductions on mortgage interest and depreciation on the property.