How To Invest Money In Shares And IPO For NRI
Indian equity market offers ample opportunities to people to grow their investments. It not only magnetizes resident Indians but also non-resident Indians who view it as a window to prosperity.
If you are someone who is living outside India but still want to participate in the Indian Stock markets, you can do so with the help of NRI demat account. This account lets you buy equities, bonds, futures or options and also participate in the Initial Public Offer(IPO). NRI demat account holds all your shares and securities in an electronic form.
Let us learn about the things that an NRI must do to invest money in shares in India.
Terminate the Current Demat Account
As per the RBI rule, an NRI cannot trade in the equities market in hisexistingdemat account. To be able to purchase the shares, NRI must close his current online demat account in the home country. The NRI must terminate all his exiting demat accounts that were operational before he was an NRI. The shares that were held in the demat account earlier, shall now be transferred to the NRO (Non-Resident Ordinary) demat account.
Open PINS Account
If NRI wants to buy shares from the secondary market, he must open the Portfolio Investment Scheme (PINS) account with a bank. RBI has made it compulsory to maintain two separate accounts for non-repatriable and repatriable shares. The PINS scheme lets the NRI buy shares using the NRE account funds. The sale proceeds are credited to the Non-Resident External(NRE) account for repatriation. However, if the NRI is willing to buy shares on a non-repatriable basis, the NRO account will get credited with the returns. The NRI can also apply for shares in Initial Public Offer (IPO) on a repatriable basis through NRE account. He can hold only one account for repatriable shares and one for non-repatriable shares. PINS account can be opened with banks only and they must be closed once the NRI regains permanent Indian residency.
Let us now learn about the documents required for opening PINS account.
Documents Required For PINS Account
To open a PINS account,NRI must approach the bank with the below-mentioned documents. If while opening the account he is overseas, the documents must be attested by the Indian embassy. The documents required are as follows:
- Address proof in India
- PAN card copy
- Proof of address abroad
- FEM Declaration
- Visa and Passport copies
- Invalidated cheque leaf of NRE/NRO bank account
- Facts about NRI demat account
If you are looking to open a NRI demat account, you may considera reputed stock broker like Kotak Securities who can help you open a demat account in a smooth and hassle-free manner.