• Maintenance of bank accounts in India.
• Investment in securities/shares of, and deposits with Indian firms/ companies. Investments in immovable properties in India.
• NRIs are permitted to open bank accounts in India out of funds remitted from abroad, foreign exchange brought in from abroad or out of funds legitimately due to them in India, with authorized dealer.
• NRIs are freely permitted to invest their funds in Government Securities/National Savings Certificates/Units of UTI through authorised dealers (Banks authorised to deal in foreign exchange). Units of UTI can also be purchased and resold directly from UTI.

There are many investments that can be made including Equities, Mutual Funds, Debt as well as Fixed Deposits offered by Banks. The investor has to decide what his financial goals are, whether the investment is for repatriation or on a non-repatriation basis, whether capital growth or income is wanted and the period of the investment. This is very critical as the options and returns will vary on these factors.

 

RBI Investment Guidelines

Investments By NRIs

In the case of NRIs under PIS it is to be ensured that the paid-up value of shares/ convertible debentures purchased by an NRI under PIS route should not exceed 5% of the paid up capital/ paid up value of each series of debentures. The aggregate paid-up value of shares/ convertible debentures purchased by all NRIs should not exceed 10% of the paid-up capital of the company/paid-up value of series of debentures of the company. The aggregate ceiling of 10% can be raised to 24%, if the General Body of the Indian company concerned passes a special resolution to that effect. The NRI investor should take delivery of the shares purchased and give delivery of shares sold. Payment for purchase of shares and/or debentures is made by inward remittance in foreign exchange through normal banking channels or out of funds held in NRE/FCNR account maintained in India if the shares are purchased on repatriation basis and by inward remittance or out of funds held in NRE/FCNR/NRO account of the NRI concerned, maintained in India where shares/debentures are purchased on non-repatriation basis.

 

NRI may invest in Exchange Trade Derivative Contracts approved by SEBI from time to time out of INR funds held in India on non-repatriation basis subject to the limits prescribed by SEBI. NRIs may also purchase on repatriation basis, Govt dated securities, Treasury bills, units of domestic Mutual funds bonds issued by public sector undertakings and shares in public sector enterprise being divested by the Govt of India.

 

Purchase Of Other Securities (Schedules 4 and 5)

• There is no limit on NRI purchasing shares/ convertible debentures issued by an Indian company on non-repatriation basis whether by public issue or private placement. Amount of consideration for such purchase shall be paid by inward remittance through normal banking channels from abroad or out of funds held in NRE/FCNR/NRO account maintained with the AD.
• NRI can also, without any limit, purchase on non-repatriation basis dated Government securities, treasury bills, units of domestic mutual funds, units of Money Market Mutual Funds.
• Foreign Institutional Investors can buy dated securities/ treasury bills, non-convertible debentures /bonds issued by Indian companies and units of domestic mutual funds either directly from the issuer of such securities or through a registered stock broker on a recognised stock exchange in India.
• NRIs resident in Nepal and Bhutan as well as citizens of Nepal and Bhutan are permitted to invest in Indian Securities on repatriation basis subject to the condition that the amount of consideration for such purchase on repatriation basis shall be paid only by way of inward remittance in free foreign exchange through normal banking channels or by debit to their NRE/ FCNR(B) accounts.

In case of investment on non-repatriation basis, the sale proceeds shall be credited to NRO account. The amount invested under the scheme and the capital appreciation thereon shall not be allowed to be repatriated abroad.

 

Facilities available to Non-Resident Indians (NRIs)/Persons of Indian Origin (PIO) for investments in India

 

Areas For Investment

• Bank Accounts and Deposits
  NRE Accounts (Principal/interest repatriable)
• Other Investments on repatriation basis:
  Government dated securities/treasury bills.
• Units of domestic mutual funds:
  Bonds issued by a public sector undertaking (PSU) in India.
• Other Investments on non-repatriation basis:
  Units of Money Market Mutual Funds in India.
• Investment in immovable property:
  May acquire immovable property in India other than agricultural/plantation property or a farmhouse out of repatriable and non repatriable funds.

NRIs do not require permission to invest in proprietary or partnership concerns on non-repatriation basis if the investor concerned is not engaged in any agricultural, plantation activity or real estate business.