Can NRIs invest in Indian mutual funds?

Can NRIs invest in Indian mutual funds?

Non-Resident Indians (NRIs) are eligible to invest in mutual funds in India, subject to certain rules and regulations set by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI). Here’s a detailed overview of how NRIs can invest in Indian mutual funds:

1. Eligibility for NRIs:

NRIs can invest in most mutual funds in India, except for Equity Linked Savings Schemes (ELSS) and other tax-saving mutual funds, which are specifically designed for resident Indians.

2. Investment Routes:

NRIs can invest in Indian mutual funds through two primary routes:

a. Repatriable Basis
  1. Funds can be invested and redeemed in foreign currency.
  2. The amount invested and the returns earned can be repatriated (transferred back) to the NRI's overseas account.
  3. Requires an NRE (Non-Resident External) account or an FCNR (Foreign Currency Non-Resident) account.
b. Non-Repatriable Basis
  1. Funds are invested and redeemed in Indian rupees.
  2. The amount invested and the returns earned cannot be repatriated abroad.
  3. Requires an NRO (Non-Resident Ordinary) account.

3. Documentation Required

To invest in Indian mutual funds, NRIs need to provide the following documents:
  1. PAN Card (mandatory for mutual fund investments in India).
  2. Proof of NRI status (e.g., passport, visa, or OCI/PIO card).
  3. Address proof (both overseas and Indian address).
  4. Bank account details (NRE/NRO account).
  5. FEMA declaration (confirming the source of funds and adherence to RBI guidelines).

4. Compliance Requirements

  1. NRIs must comply with FEMA (Foreign Exchange Management Act) regulations.
  2. NRIs cannot invest in mutual funds through Power of Attorney (POA) holders.
  3. KYC (Know Your Customer) compliance must be completed before investing.


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