There’s no denying the fact that investing in a developing economy is one of the best ways to grow your wealth. Speaking of which, India is a growing economy, and investing in bonds, mutual funds stocks, and more in the Indian market would be beneficial for investors in the long run. But to do so, NRIs need a Demat account and follow the rules laid out by the Foreign Exchange Management Act.
Why Should NRIs Get a Demat Account?
According to Upwardly, the Indian economy will jump to a whopping $5 trillion by 2025. It also indicated that a report by the United States department of agriculture predicts that India is likely to rank third in the list of the largest economies at $6.6 trillion by the year 2030. The stock market in India is a lucrative investment option for investors across the globe. It helps NRIs hold securities such as stocks, ETFs, bonds, and so on.
Procedure for Opening NRI Demat Account in India
CDSL and NDSL are Central repositories approved by the government who are responsible for managing Demat accounts in India. They have stockbrokers as their authorized agents who act as an intermediary between the CD and the investor.
The procedure for opening a Demat account in India is pretty straightforward. The best part is that you don’t have to run around doing a ton of paperwork when everything is available online. NRIs can open a Demat account with CDSL or NDSL registered brokers. Another simple way is to connect with the financial concierge at Rurash.
Documents Required for NRI Demat Account
To make the process as convenient and seamless as possible, keep the following documents ready.
- Duly filled application form for a Demat account
- Copy of your PAN card
- Copy of your passport
- Copy of your Visa
- Overseas proof of address such as like copies of the latest utility bills, agreement for rent or lease, or a sale deed
- FEMA declaration
- Passport-sized photograph
- Canceled check leaf of NRO/NRE account
- PIS letter of approval issued by RBI
Get all these documents attested at the Banker, Notary, or the Indian Embassy of your country of residence.
You can open an NRI Demat account with the Depository Participant of your choice. Since most large banks and brokers are DPs, it won’t be a problem. You should also know that as an NRI, you don’t need permission from SEBI or RBI to get a Demat account.
Keep all the above-mentioned documents and follow this procedure for opening NRI Demat account in India.
- Make sure that all the account holders duly sign the account opening form after filling up all the necessary details.
- Open an NRE or an NRO account depending on whether you wish to invest on a repatriable or non-repatriable basis.
- The account holders are also required to clearly write their signatures across their passport size photographs.
- If you are using the Demat account nomination facility, have the photograph and signature of the nominee ready.
- Keep in mind that you are going to be charged a one-time nominal account opening fee along with some annual maintenance charges. Some other charges include debit transaction fees, pledge fees, and charges for modifying your portfolio. However, many forms offer promotional codes for discounts that can help in reducing these expenses.
- Your proceedings from dividends, selling shares, or other earnings will directly be deposited in the NRE/NRO bank account depending on what you have linked.
- You can open only one Demat account for each depository participant or stockbroker.
- You might not need RBI approval for opening a Demat account but you do need permission from the Reserve Bank of India. The bank with which you choose to open your NRI account will help you acquire this permission. However, if you are planning on making non-repatriable investments, you don’t need this. Just get your NRO bank account linked to your Demat and trading account.
- If you want someone residing in India to operate your Demat account, you have to give them a power of attorney. For that, you need to submit a duly notarized copy of the PoA to your stockbroker.
Conclusion
If you wish to hold on to your securities for building wealth, an NRI Demat account is the best way to keep them safe. But even though the process is easy and you can do everything online, it’s recommended to opt for Demat services from a reputed fintech provider. After all, keeping track of so many requirements and complying to regulations can make the process overwhelming.
At Rurash, we take care of handling documentation, bill payments, and all the banking related tasks. All in all, our team of experts strives to make your investment journey comfortable and smooth from overseas. So, are you ready to sow the seeds of long-term and steady wealth? Get in touch with us and we’ll guide you through the process.
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