NRI Mutual Fund

Mutual Funds investments for NRI is a very sought after tool in India. Mostly, NRIs aren’t aware that they can invest in Indian Mutual Funds and that too without any hassle. NRI Mutual Fund can be one of the best investment vehicles in India given its flexibility.

 

What are Mutual Funds?

Suppose there are four friends who want to buy a 12 piece box of chocolate priced at Rs.100/- but all of them have Rs.25/- only. They decide to pool their money and buy the box and then distribute 3 chocolates each based on their contribution. This is a very basic model on which Mutual Funds operate. The box of chocolate here is the fund and chocolates are units. You buy certain units of the fund which has a Net-Asset Value (NAV). The value of this NAV changes with time based on the fund’s growth resulting in your gains.

 

How can NRI invest in Mutual Funds in India?

There are certain requirements based on the guidelines of FEMA for being an NRI for doing the same which are:

 

1. An NRE/NRO Bank Account: For an NRI, their funds can only be managed through the NRE or NRO Bank Accounts in India. Therefore, it is mandatory for an NRI to carry out investments in Mutual Fund using either of these accounts

 

2. Documentation: There is a set of documents that you must produce in order to invest in mutual funds in India. The following documents are needed for Know your Customer (KYC) of Mutual Funds for NRIs:

 

  • Completely filled and signed KYC Form
  • Identity Proof: Passport and PAN Card (Self-Attested)
  • Address Proof: Mandatory for NRIs. (Includes both correspondence and overseas address)
  • Cancelled Cheque of NRE/NRO Account

 

Now, NRIs can either invest in mutual funds online through direct transactions from their NRE/NRO Accounts or they can get a Power of Attorney (PoA) to invest money on their behalf. A thing to note here is that in case of a PoA, the signatures of both the NRI Investor and the PoA is required to be present on the KYC Documents

 

3. KYC/Attestation (In-Person Verification): The verification is done for NRIs by a certified entity for the acknowledgement of the fact that the investor has in his/her possession, all the original documents that he/she has mentioned in the KYC Form. It can be done by the following process:

 

  • The IPV can be done seamlessly on a video call (Skype, Appear.in etc.). Earlier, NRIs were required to visit the offices or someone visited the investor to verify the papers at their home or workplace
  • You can set a time for the video call with the agencies and carry on with the IPV. Only the following entities have the authorization to carry out IPV:

 

  1. KYC registration agency (KRA) 
  2. The AMC (Asset Management Companies in India) Mutual fund agent 
  3. Mutual fund distributor or advisor 
  4. MF’s registrar transfer agent like CAMS or Karvy

 

  • Major agencies have their mobile apps now for instant authentication through biometrics or OTP
  • The video call might include questions about the details you have filled in the form and the application can be cancelled if any contradictions occur

 

NRI Mutual Fund investments are specific, every agency doesn’t allow investments from NRIs. Although, there are certain Mutual Fund Houses accepting payments from NRIs:

 

Which Indian Fund Houses Accept NRI Investments

Here is a list of Mutual Fund Houses that accept investments from NRIs: 

 

  • DHFL Pramerica Mutual Fund
  • Birla Sun Life Mutual Fund
  • ICICI Prudential Mutual Fund
  • HDFC Mutual Fund
  • SBI Mutual Fund
  • UTI Mutual Fund
  • L&T Mutual Fund
  • PPFAS Mutual Fund (Parag Parikh Financial Advisory Services)
  • Sundaram Mutual Fund

 

Taxation Rules for NRI Mutual Fund Investments

Taxation is a very crucial aspect in any asset class. The taxation on Mutual Funds is almost the same for NRIs and Residents. Different types of Mutual Funds are taxed differently for NRIs: 

 

*(Equity Funds: An equity fund is a mutual fund that invests principally in stocks)

*(Debt Funds: A debt fund is a mutual fund that invests in fixed-interest generating securities such as corporate bonds, government securities etc.)

*(Minimum Holding Period: It is a stipulated period defined to differentiate the gains as long term and short term. Assets held for less than minimum holding period will be taxed on short term and assets held for more than the minimum holding period will be taxed on a long term basis)

Nature of Profits / Income

Equity Funds* Debt Funds*
Minimum Holding period* for Long term capital gains 1 year

3 years

Short term capital gains taxation

15% + 4% cess* = 15.60%

As per the tax rate of the investor (30% + 4% cess = 31.20% for investors in the highest tax slab)

Long term capital gains taxation

10% + 4% cess = 10.40% (if the long term gain exceeds Rs 1 Lakh)

(long term gains up to Rs 1 Lakh is tax-free) 

20% with indexation*

HDFC Mutual Funds for NRIs to Invest in India

HDFC Mutual Funds for NRIs to Invest in India

15 views

HDFC Asset Management Company Ltd. is one of the most popular fund houses in India that offers a wide range of mutual funds to resident as well as NRI customers. Indians living abroad can invest in HDFC Mutual Funds for NRIs to get the advantage of diversification, liquidity, professional management, etc. HDFC offers different types of mutual funds for NRIs including growth funds, or even retirement funds to cater to investors from all walks of life.

Mutual funds for NRIs in Malaysia to invest in India

Mutual funds for NRIs in Malaysia to invest in India

92 views

Indian diaspora is present throughout the world and India is the largest recipient of remittances in the world. Non-Resident Indians (NRIs) and Overseas Citizens of Indians (OCIs) living around the world have many investment options in India. Mutual Fund is a great investment option that allows investors access to a well-diversified portfolio of equities, bonds and securities. NRIs living in Malaysia can invest in debt and equity markets to earn good returns. There are several mutual funds for NRIs in Malaysia to suit their long-term financial goals like retirement and buying a dream house in India.

Mutual Funds for NRIs in Singapore to invest in India

Mutual Funds for NRIs in Singapore to invest in India

109 views

As India is one of the fastest growing large economies in the world, investment in the Indian stock market is a great opportunity for NRI investors to grow their wealth. Individuals with good market know-how can invest in stocks directly. However, investment through mutual funds is a more cost effective and less risky solution. All mutual fund houses allow NRIs to invest in their schemes, such as SBI mutual fund, HDFC mutual fund, ICICI prudential mutual fund, etc. In this article, we have covered some of the best mutual funds for NRIs in Singapore and other important details.

Mutual Funds for UAE-Based NRIs to Invest in India

Mutual Funds for UAE-Based NRIs to Invest in India

210 views

Indian diaspora constitutes the largest population of the UAE, approximately 33% of the country’s population. NRIs living in UAE can invest in mutual funds in India to achieve their short and long-term financial goals, such as the purchase of house, child’s education, retirement, etc. However, there are some important guidelines and rules related to investment in mutual funds by NRIs. They need to adhere to Foreign Exchange Management Act (FEMA) to invest in mutual funds in India. Here are some of the best mutual funds for UAE-based NRIs along with guidelines.

Mutual Funds for NRIs in Germany to invest in India

Mutual Funds for NRIs in Germany to invest in India

132 views

The growing economy of India has been attracting investors from around the world to invest in India. Mutual funds are one of the most popular financial instruments not only among Indian investors, but also Non-Indian Residents (NRIs) from across the world. Germany-based NRIs can pursue their long-term financial goals like a child’s education, retirement, purchase of a house, etc., by investing in mutual funds, especially in equity funds. They can also invest in debt funds to earn better returns than bank savings in the short term. Let’s look at some of the best mutual funds for NRIs in Germany to invest in India.

Mutual Funds for NRIs in Australia to Invest in India

Mutual Funds for NRIs in Australia to Invest in India

215 views

Indians are the third largest migrant group in Australia. Many Indians have been migrating to Australia for study and jobs over a couple of years. Indians in Australia, including NRIs and PIOs (Persons of Indian Origin), are eligible to apply for various financial and banking services in India, such as NRI bank accounts, investment in stocks, mutual funds and exchange-traded funds (ETFs), etc. However, unlike resident Indians, there are limited mutual funds for NRIs in Australia. NRIs who want to invest in mutual funds in India have to follow some important rules and guidelines in Foreign Exchange Management Act (FEMA).

Mutual Funds for NRIs from UK to Invest in India

Mutual Funds for NRIs from UK to Invest in India

60 views

NRIs are spread across the world from the Middle East to the UK and the USA. There are about 3.25 lakh NRIs living in the United Kingdom. Once they begin earning a decent income, Indians living abroad explore investment options for NRIs in India. Mutual funds are a great option to earn higher income as compared to traditional investment options. There are some important guidelines and rules that need to be followed to invest in mutual funds in India for NRIs. UK-based NRIs are also required to adhere to rules set by the Foreign Exchange Management Act (FEMA) to invest in NRI mutual funds.

Mutual Funds for NRIs from USA/Canada to Invest in India

Mutual Funds for NRIs from USA/Canada to Invest in India

518 views

Unlike NRIs from other countries, USA/Canada NRIs are faced with certain cumbersome compliance requirements under FACTA (Foreign Account Tax Compliance Act) to invest in mutual funds in India. Nevertheless, many mutual fund houses allow NRIs based in the USA and Canada to invest in India in a hassle-free manner, but the options are limited. Let’s look at the mutual funds for NRIs from USA/Canada to invest in India.

NRI Mutual Fund: The Basic 2021 Guide

NRI Mutual Fund: The Basic 2021 Guide

796 views

Suppose there are four friends who want to buy a 12 piece box of chocolate priced at Rs.100/- but all of them have Rs.25/- only. They decide to pool their money and buy the box and then distribute 3 chocolates each based on their contribution. This is a very basic model on which Mutual Funds operate. NRI Mutual Fund is a very sought after investment vehicle in India and under this asset class, NRIs face a lot of difficulties. In this article, we will tackle these difficulties one by one.

SIP for NRIs: How can NRI invest through SIP in a Mutual Fund?

SIP for NRIs: How can NRI invest through SIP in a Mutual Fund?

1,338 views

Mutual Fund is one of the most secure and sort after investments in India. SIP refers to Systematic Investment Plan and it is indeed like a metaphorical sip of profits. The less risk market is wide open for investments from both Indian Residents as well as NRIs. In this article we will try to explore the SIP route for Mutual Fund investments for NRIs in particular.