Mutual Funds for NRIs in Singapore to invest in India

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 NRIs in Singapore to invest in India
Mutual Funds for NRIs in Singapore

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

Benefits of mutual funds

  • Professional management and research: Mutual funds are managed by professional fund managers who closely track the market trends and conduct in-depth research of mutual funds to make the decision about buying and selling. 
  • Risk diversification: You can get the benefits of a large and well-diversified portfolio even with little investment.
  • Convenience: Mutual funds have convenient features like an easy subscription and redemption process, availability of NAVs and performance updates through journals, newspapers and updates.  
  • Liquidity: All mutual funds are easy to buy and sell. Open-ended funds offer the advantage of redemption on demand, which is an extremely beneficial feature especially during rising or falling markets.      
  • Tax advantage: Dividends from mutual funds are not taxable in the hands of the investors. Capital gain from mutual funds held for a period of over 1 year is treated as long-term capital appreciation and is tax-free. 
  • Reduction in costs: As mutual fund houses pool money from several investors, your investment cost involved in buying and selling of large amounts of securities is lowered. 

Best performing mutual funds for NRIs in Singapore

Some of the top performing NRI mutual funds are listed below: 

  • SBI Mutual Funds
  • ICICI Prudential Mutual Funds
  • Aditya Birla Sun Life Mutual Funds
  • Tata Mutual Funds
  • Nippon India Mutual Funds
  • UTI Mutual Funds 
  • PGIM Mutual Funds
  • Franklin India Mutual Funds
Funds3 Mo6 Mo1 Yr3 Yr5 Yr2020
ICICI Prudential Technology Fund14.133.8132.529.122.970.6
Nippon India Pharma Fund21.224.960.829.317.766.4
Aditya Birla Sun Life Digital India Fund 14.634.1114.427.523.159
Tata India Pharma and Healthcare Fund16.319.552.626.812.564.4
PGIM India Global Agribusiness Offshore Fund-7.41.737.426.619.272.4
UTI Healthcare Fund18.921.657.726.413.267.4
SBI Healthcare Opportunities Fund17.623.160.725.810.865.8
Tata Digital India Fund1534.6112.125.221.854.8
SBI Technology Opportunities Fund 14.329.38624.319.947.3
Franklin India Technology Fund1.617.374.222.919.256.8
Best performing mutual funds for NRIs in Singapore

Note: Returns up to 1 year are on an absolute basis & more than 1 year are on CAGR basis as on 26 May 2021.

Mutual funds for NRIs in Singapore: Investment procedure

Set up an NRI account

As per the Foreign Exchange Management Act (FEMA), it is compulsory for NRIs to open a rupee-denominated NRI account to invest in India. NRIs in Singapore can open any of the following NRI accounts to invest in mutual funds in India:

  • NRE account: NRIs can transfer their overseas earnings into an NRE account. It is a rupee-denominated account. 
  • NRO account: NRIs can deposit their earnings in India and foreign income in an NRO account

NRIs can use any of these accounts to invest in mutual funds in India. 

KYC procedure for NRIs from Singapore to invest in mutual funds in India

  • KYC form: NRIs are required to submit the fully filled KYC form to the SEBI registered intermediate. They can send the KYC form and documents by courier/ post. 
  • Documents: Documents to be submitted are as under:
    • Overseas address proof
    • Indian/ domestic address proof
    • A copy of passport
    • A recent photograph

Merchant Navy employees must submit a mariner’s declaration or certified copy of the Continuous Discharge Certificate.

  • Attestation: You can get your KYC documents attested in Singapore from any of the following authorities: authorized officials of overseas branches of scheduled commercial banks registered with the RBI, judge/ court magistrate, Public Notary, or the Indian Embassy/Consulates in Singapore. 
  • In-Person Verification (IPV): In-person verification is compulsory for investment in mutual funds for NRI. You can do the same by connecting to the official representative of the mutual fund house where you intend to invest via video conferencing. 

Investment procedure

Following are methods to invest in mutual funds for NRIs: 

  • Self or direct investment: You can manage your investment portfolio. Use your NRI account to start investing in mutual funds in India. Collect copies of the mutual fund KYC forms available on the portals of an AMC (Asset Management Company). Or visit the Indian Embassy in Singapore to complete in-person verification.  
  • Power of Attorney (POA): NRIs also have the option of allowing another person to invest on their behalf. You have to provide a Power of Attorney (POA) letter to facilitate transactions made by the person you have mandated. This is ideal if you think someone you trust can monitor your investments. 

NRI mutual fund taxation

Gains from mutual funds investment are subject to income tax in the same way as resident Indians. 

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
Capital gain taxation
Sort your Taxation in India with SBNRI

Relief from double taxation

India has signed the DTAA (Double Taxation Avoidance Agreement) with more than 90 countries. As per the agreement, NRIs have to pay tax in only one country. This means if they have already paid taxes on their mutual fund gains in India, they are not required to pay tax for the same in the country of your residence. 

Tax deduction

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

NRI Mutual Fund: Expert Assistance

Before investing in Indian market, NRIs must consult market experts to make informed decisions. You can get detailed mutual fund advisory from 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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FAQs

Which bank account is required to invest in mutual funds?

NRIs can invest in mutual funds in India through either NRE or NRO account. Please remember, you can’t invest in mutual funds in India through your foreign bank accounts.  

What are the documents to complete KYC?

You need to submit the following documents to complete the KYC process:
– Recent passport size photograph
– Attested copies of your PAN card, passport and residence proof of your country of residence
– Indian address proof
– Bank statement 

What is the difference between ETF and mutual funds?

There is not much difference between ETF and mutual funds. MF or mutual funds are traded at the closing net asset value whereas ETF or exchange-traded funds are traded throughout the trading day. Mutual funds are actively managed and ETFs are passively managed investment options. 

What happens to the mutual fund when I become an NRI?

You can hold the mutual funds even after your residential status changes. You will have to write a letter to their mutual fund houses along with proof of NRI bank account, KYC documents, passport and overseas address proof. 

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