Investing in direct equity is respectively complicated. NRIs do need to open a PIS (Portfolio Investment Scheme) account along with NRE and NRO account with the bank. NRIs can approach their bank toopen a PIS account while opening their NRE and NRO account. A Demat and trading account is also required for investing in the equity market. It is better to select a single bank which are having all the facilities of opening a PIS account with NRE\/ NRO savings account and Demat & Trading account.<\/p>\n\n\n\n

Only one PIS account can be opened in India and it can be a joint account. There are various regulations on investing in Indian companies for non residents such as holding maximum amount of a company’s stock etc. You can repatriate your income to foreign currency if you have PIS account. The txation is simillar to resident accounts on capital gain of equities. There are some limitations in terms of intrday trading and short selling of stocks.<\/p>\n\n\n\n

Real estate is another very popular investment allocation for NRIs because of the appreciation over the last decade. Moreover you can get the steady rental income when you are in aborad. NRIs can only invest in residential and commercial property. They cannot invest in agricultural lands. Recently the capital appreciation is not making enough money for the investors. The rental income is also getting affected because of excess capacity in the market.<\/p>\n\n\n\n

Though it is a proven choice for many investors I personally don’t prefer to real estates as it is a very poor liquidity. You cannot sell the property even if you switch your asset allocation to other categories. Rent management is also difficult sitting outside India. If you have some relatives who can take care of your property yo can allocate a portion of your investment in real estate.<\/p>\n\n\n\n

5. Bonds, NCDs and Government Securities<\/h3>\n\n\n\n

Bonds and Non convertible debentures (NCDs) can be agood investment option but less known. It is widely under penetrated because of its unpopularity or vice versa. Government securities are backed by government assets and carry a very less risk. <\/p>\n\n\n\n

Bonds are usually issued by Public Sector Units(PSUs) such as IOC, ONGC, GAIL, Coal India,NTPC etc. As these bonds are backed by PSUs the dafulats risk is less. Bonds issued by Private sector scompanies are also available when they raise the capital via bonds. NRIs do need to assess the credit worthiness of the company while subscribing these bonds.<\/p>\n\n\n\n

My preference is to go for companies with sound finance and good quality assets. The interest rate is marginally less for sound companies with good history of credit and repayment. Even if the interest rate is lower my preference to go for that because I believe in preserve of capital is necessary.<\/p>\n\n\n\n

The bonds and NCDs are taxable if the return is creduted to NRO account and taxfree if you invest with NRE account.<\/p>\n\n\n\n

NPS is pension plan who wants to retire in India and they need money in INR. This is a retirement savings plan regulated by  PFRDA which is a government body. NRIs can start an NPS account and start investing with their NRE\/ NRO account. NPS fund invest you rmoney in three different asset classes – equity, corporate bonds and government securities.<\/p>\n\n\n\n

FCNR (Foreign Currency Non resident) deposits are kind of fixed deposits but not in INR. It is available in USD, EUR etc. according to the banks.NRIs may consider these deposits when they have a lump sum planned expense in foreign currency. <\/p>\n\n\n\n

This deposits will actually helping to hedge the INR in terms of USD. If you think USD will strengthen compare to INR in future you may go for FCNR deposits. The interest rate is very low compare to INR. The income from FCNR deposits are non taxable by Government of India and you can access the money any time.<\/p>\n\n\n\n

P.S: NRIs cannot invest in Post office small savings scheme such as PPF, NSC, SCSS etc. However, A person who has opened a PPF account during his\/her residency in India can continue the investment till maturity.<\/p>\n\n\n\n

Conclusion:<\/h3>\n\n\n\n

The above investment options are quite handful to NRI Investors who want to innvest in India. As I said the fixed deposits in NRE account is the simplest bet considering its simplicity in tax rules. But if you want to build a capital assets which gives you higher return you have to look into the equity.<\/p>\n\n\n\n

You can invest in equity directly or via mutual funds. Real estates also can be explored depending on the situations. The asset allocation is to be based on one’s risk appetite, financial liabilities and different other factors . One can consider the NRE fixed deposits for short term investments and instant liquidity.<\/p>\n\n\n\n

However, you can invest based on your risk profile and expectations. You can consult your investment advisor for a detailed plan.<\/p>\n","protected":false},"excerpt":{"rendered":"

Are you living in abroad and want to settle in India? If yes you must have thought of investing in India. Even if you have not decided where to settle you can invest in India as an NRI. Now what is the definition of NRI. Non Resident Indian (NRI) means an individual who resides outside India. He is either a citizen of India or a overseas citizen of India (OCI) cardholder. More precisely, if an individual spends in India for atleast 182 days in a year. NRIs are earning a handsome money but most of them are not very concious <\/p>\n","protected":false},"author":1,"featured_media":2193,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10,3,13,7,8,2,12],"tags":[61,60],"class_list":["post-2192","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bank","category-income-tax","category-money-hacks","category-mutual-fund","category-real-estate","category-retirement-planning","category-stock","tag-investment-options","tag-nri-investing","has_thumb"],"yoast_head":"\n