How Rurash’s NRI Financial Concierge offers the featured services to NRIs based in UK, Kenya, Middle East and APAC (Asia Pacific Region)
As one of the fastest-growing economies globally, India is an appealing investment destination. The recent growth figures and governmental efforts have helped establish India’s conducive investment climate. As a result, more non-resident Indians (NRI’s) are looking at India as their desired investment destination.
Against this backdrop, NRI’s need to familiarize themselves with some key considerations for NRI investments and acclimatize with the best wealth management firms for NRI investments.
Bank deposits
NRI investors must have a savings bank account for investing in India. There are three types of bank accounts that NRIs can operate.
1. Non-resident ordinary rupee account (NRO)
This type of account is used for the income sources in India, such as rent or pension. Remittances outside India of an amount exceeding $1 million require RBI approval.
2. Non-resident rupee savings account (NRE)
This account is used for parking money earned in other countries in Indian rupees. The account can be in the form of a savings, fixed deposit, current or recurring account. The interest income from NRE accounts is exempt from taxes.
3. Foreign currency non-resident account (FCNR)
This account is used to deposit money in an acceptable foreign currency. Some acceptable foreign currencies include the US dollar, Australian dollar, Japanese Yen, etc. FCNR accounts can only be maintained as fixed-deposit accounts.
Equity investments
Investing in the budding Indian companies is a lucrative investment opportunity. NRI investors can invest in listed and unlisted companies, subject to specific regulations. Equity investments in listed companies are made through the RBI’s portfolio investment scheme (PIS). NRIs can sell and buy shares on stock exchanges by operating a PIS account with a designated bank. An NRO or NRE account and a Demat and trading account are also necessary for equity investments by NRIs.
NRI investments in unlisted companies come under the purview of foreign direct investment and have a separate set of regulations.
Mutual funds
NRIs can invest in equity and debt-oriented mutual funds by fulfilling requirements like KYC and other authentication. Equity and debt mutual funds have different taxing regulations. For instance, a 15% tax is applicable if the equity fund is sold within a year. On the other hand, a 30% tax rate is applicable if a debt-oriented mutual fund is sold within three years. Many mutual fund houses accept NRI investments.
Bonds and non-convertible debentures (NCDs)
Bonds are attractive investment instruments for NRI investors looking for greater returns and comparatively lower risk. NRI’s can invest in 5, 10, and 30-year bonds issued by the government of India. The RBI is also making efforts to open more Gsecs with varying tenures to NRIs. Capital gains bonds by REC or NHAI are also great instruments for NRIs.
NCDs are bonds issued are asset-backed bonds issued by corporates. They are similar to fixed deposits but offer higher returns. NRIs can make NCD investments through their NRE and NRO accounts.
Real estate
Real estate has always been an attractive investment for NRIs for its long-term returns. NRIs can invest in any immovable property in India except farmland, plantation property, and agricultural land. There is no cap on the number of investments in immovable properties by NRIs.
National pension scheme
The national pension scheme is one of the popular retirement schemes in India. NRIs can invest in one of the two forms of NPS – tier 1 and tier 2. Tier 1 is a pension account requiring mandatory investment until maturity to avail of full benefits. Tier 2 is an investment account under which the funds can be withdrawn anytime. The two forms also have varying minimum investment requirements and tax benefits.
Taxation considerations for NRI investments
NRIs are subject to taxes on the income earned in India. Income earned through stocks, mutual funds, NCDs, and other investments is all taxable income under the capital gains tax. The tax rate depends on the length of the investment.
Long-term capital gains (LTCG) – Capital gains from investments exceeding a year are termed long-term capital gains. For debt mutual funds, LTCG is applicable on investments exceeding three years.
Short-term capital gains (STCG) – Capital gains from investments of less than a year are termed short-term capital gains. STCG from equity and equity-oriented investments have a 15% tax rate.
How Rurash’s NRI Financial Concierge offers featured services to NRIs based in the UK, Kenya, Middle East, and APAC
NRIs are subject to a separate set of regulations on approved instruments, authentication, and taxes. These requirements vary between the types of investment instruments. India is undoubtedly a great investment destination for NRIs. But ensuring lucrative returns and weighing through risks and obligations requires some expert guidance. Rurash’s NRI financial concierge has been serving NRI investors in the US, UK, Middle East, and APAC region and helping investors make the most out of their investments. Rurash’s NRI financial converge offers a well-rounded ensemble of wealth management services for legacy building. Rurash’s expert team of wealth managers and financial planners act as personal wealth custodians for investors investing in India from miles away from home.
Some of the expert services included in the NRI financial concierge service
- Remittance
Remittance is the money an NRI transfers to their relatives and friends in India. Such a transfer requires a certificate issued by a CA in the format given by the Ministry of Finance, the Central Board of Direct Taxes, and the Government of India.
- Cross border remittance
Transfers between companies, banks, or individuals of two countries are known as cross-border remittance transfers. Rurash ensures a smooth cross-border remittance transfer.
- Legacy planning
Building a legacy is essentially the preservation and investment of wealth for future generations. NRIs are subject to different regulations for long-term investments. Moreover, NRIs can also be subject to the laws of the country of residence. For instance, estate planning can be a complex undertaking as countries have different regulations for owning an estate in different countries.
- Retirement planning
Whether NRIs decide to spend their retirement in India or not, retirement planning is crucial for a comfortable retirement period. There are plenty of retirement investment opportunities for NRIs in India which offer excellent safety and returns.
- Legal planning
There are a lot of legal issues and requirements when it comes to cross-border investments. NRIs have to be on top of all the legalities about the property, criminal, family, passport, and international investment litigation.
- Trustees services
Ensuring all compliance and statutory requirements are met is essential for all investments, especially NRI investments. Agency and administration services, alternative investment funds trusts, bond trusteeship, real estate investment funds trust, etc., are some of the trusteeship services offered by Rurash.
Conclusion
It has never been a better time to invest in India. The technological and financial revolution has marked India as one of the best investment destinations. Rurash offers expert wealth management advisory to NRI investors on investment opportunities. It helps NRI investors maneuver through regulations, by-laws, and tax compliance. Rurash’s specialist team of financial planners helps clients invest in the best instruments like equity, mutual funds, bonds, and more. The NRI financial converge is a one-stop service for all the different facets of NRI investments, from assessing instruments to compliance and legacy building.
RURASH is amongst India’s tech driven investment management company, providing financial solutions to augment the client’s wealth and facilitate building a legacy.