Mutual funds for NRIs in Malaysia to invest in India

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 Malaysia to invest in India
Mutual funds for NRIs in Malaysia

NRIs living in Malaysia can invest in the debt and equity market to earn good returns. Longer mutual fund terms increase the possibilities of good returns. Some of the best mutual funds in India for NRIs include L&T mutual funds, UTI Mutual Funds, etc.

Also Read: Mutual Funds for NRIs in Singapore to invest in India

Mutual funds for NRIs in Malaysia 

Here are some of the best mutual funds for NRIs living in Malaysia and guidelines to be followed by NRIs.

  • L&T Mutual Funds
  • Sundaram Mutual Funds
  • UTI Mutual Funds
  • BNP Paribas Mutual Funds

NRIs can download SBNRI App to choose from 3000+ mutual fund schemes in India or to ask any questions related to mutual fund investment.

SBNRI is an authorised Mutual Fund Distributor platform & registered with Association of Mutual Funds in India (AMFI). ARN No. 246671

Key benefits of investing in mutual funds

  • Professional management and research
  • Risk diversification
  • Instant liquidity
  • Tax advantage 
  • Low-cost investment

To accept investment in mutual funds from NRIs living in Malaysia, mutual fund houses have set different guidelines. While some of them accept investment only in the paper application form, others allow online applications through NSE NMF II or BSE STAR MF platforms. Before investing in mutual funds, NRIs need to confirm the method of investment with their respective mutual fund houses. 

Some of best performing mutual funds for NRIs

FundsNet Assets (Cr)3 Mo6 Mo1Yr3 Yr5 Yr
UTI Dynamic Bond FundRs. 3961.59.519.28.54.9
L&T Emerging Business FundRs. 7,99313.216.615.730.713.9
Sundaram Rural and Consumption FundRs. 1,20617.724.410.118.28.8
UTI Banking & PSU Debt FundRs. 40338.
UTI Dynamic Bond FundRs. 3961.59.519.28.54.9
L&T Business Cycles FundRs. 54416.
L&T Value India Value FundRs. 7,55710.310.94.12110
BNP Paribas Multi Cap FundRs. 588-4.6-2.619.317.313.6
UTI Bond FundRs. 2952.69.417.15.92.9
Sundaram Debt Oriented Hybrid FundRs. 323.
Best mutual funds for NRIs in Malaysia

Note: Returns up to 1 year are on an absolute basis & more than one year are on CAGR basis as on 7 Sep 2022.

Mutual funds for NRIs in Malaysia: Invest procedure

Indians living abroad who want to invest in India are required to follow some important guidelines and rules to begin investing in mutual funds for NRIs. SBNRI is an authorized Mutual Fund Distributor platform & registered with Association of Mutual Funds in India (AMFI). ARN No. 246671.

Open NRI account

NRIs are required to have a rupee-denominated account to invest in India as per the Foreign Exchange Management Act (FEMA). You can open one of the following NRI accounts to invest in mutual funds for NRIs:

  • NRE account: NRIs can transfer funds into an NRE account. It is a rupee-denominated account. 
  • NRO account: An NRO account can be opened by NRIs to deposit their foreign and Indian earnings. 

KYC procedure for NRIs to invest in mutual funds in India

  • KYC form: Submit the fully filled KYC form and documents to the SEBI registered intermediate. You can send the documents via courier or post.  
  • Documents: KYC documents are as under:
    • Overseas address proof
    • Indian/ domestic address proof
    • A copy of passport
    • A recent photograph

Individuals employed in the Merchant Navy need to submit a mariner’s declaration or certified copy of the Continuous Discharge Certificate.

  • Attestation: Get your KYC documents attested in Malaysia by any of the following authorities: authorized officials of overseas branches of a scheduled commercial bank registered with the RBI, judge/ court magistrate, Public Notary, or the Indian Embassy/Consulates in Malaysia.
  • In-Person Verification (IPV): In-person verification is compulsory for investment in mutual funds for NRI. You can connect to the official representative of the mutual fund house via video conferencing. 

Investment procedure

You can choose any of the below mentioned options to invest in mutual funds for NRIs: 

  • Self or direct investment: NRIs can invest in mutual funds and manage their portfolio. They can start investing in mutual funds by debiting funds from their NRI account. Download copies of the mutual fund KYC forms from the portal of an AMC (Asset Management Company). Or visit the Indian Embassy in Malaysia to complete in-person verification.  
  • Power of Attorney (POA): NRIs can also allow a trusted person to invest on their behalf. They have to submit a Power of Attorney (POA) letter to facilitate transactions made by the mandate they have appointed. 

NRI mutual fund taxation

Capital gains tax rates on NRI Mutual Fund investment for the financial year 2021 – 2022 (Assessment 2022 – 2023) are as below:

Type of fundsShort-term capital gains (STCG) taxLong-term capital gains (LTCG) gains
Equity mutual funds15%10% without indexation benefits
Debt & other types of funds30%20% with indexation benefits
Tax on capital gains
Sort your Taxation in India with SBNRI

Relief from double taxation

India has entered into the DTAA (Double Taxation Avoidance Agreement) with more than 90 countries. As per the agreement, NRIs are liable to pay tax in only one country. Hence, NRIs who have already paid taxes on their mutual fund gains in India needn’t pay tax for the same in the country of their residence. 

Tax deduction

Non-Resident Indian investors can apply for TDS deduction on mutual fund investments in India. Equity mutual fund investment is subject to TDS deduction at 10%. Investment in debt and other non-equity funds is subject to a 20% TDS deduction. 

NRI Mutual Fund: Expert Assistance

NRIs must consult market experts to make informed decisions and avoid unnecessary hurdles  and risk. You can get detailed mutual fund advisory from market experts at SBNRI. You can download SBNRI App from the Google Play Store or App Store to ask any questions related to mutual fund investment, NRI account opening online and tax filing in India. To ask any questions related to Mutual Funds, click on the button below. Also visit our blog and YouTube channel for more details. 

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What are the types of rupee accounts permitted to Non-Resident Indians to invest in mutual funds in India?

NRIs can maintain three types of rupee accounts as follows:
– NRE: Non-resident (External) Accounts
– NRO: Non-resident Rupee (Ordinary) Accounts
– FCNR: Foreign Currency (Non-resident) Accounts

Do NRIs require any approval from the RBI to invest in India?

No approval is required.

Are NRIs eligible for the indexation benefit?

Yes, NRIs are eligible for the indexation benefit.

How will the redemption proceeds be paid to NRI investors?

In case of NRIs, where the investment is made using the inward remittance or from funds held in the NRE/ FCNR account of the investor, the maturity proceeds or repurchase price of units (after payment of taxes) can be transferred to the NRE/ NRO/ FCNR account of the investor. 

Can NRIs invest in mutual funds in a foreign currency?

No, NRIs can’t invest in mutual funds using foreign currency. They need to open an NRE/ NRO bank account to start investing in India. It is mandatory that an NRI maintains a bank account in India to invest.  

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