Investing Formalities for NRIs

Steps to proceed for Investment

As per the new SEBI (Securities and Exchange Board of India) ruling with accordance to the protocols set by the Income Tax Department of India, anyone who wants to invest in Indian stock markets, debt or other instruments or be involved in any financial transaction in India needs a PAN – Permanent Account Number. SEBI has made it mandatory for all investors to have a PAN card, irrespective of whether he is a resident Indian living in India, a Person of Indian origin (PIO), Non Resident Indian (NRI) or Overseas Indian Living Abroad (OCI). This is required for investing in any asset class in India, e.g. mutual funds, stocks, bonds, etc

Step I – PAN Card

The PAN Card is a must-have document which is obtained through the Income Tax Department. It is a Permanent Account Number allotted by the Government of India. If you are applying for a PAN Card online and you are a non-Indian citizen, you are required to get the proofs attested by the High commission or the Indian Embassy. This can be avoided if the application is not filled online and is submitted by hand in India along with the Indian proof of address. In this case, the PAN Card will be delivered in India to the specified address on the PAN Application.

Step II – KYC Formalities

Once the PAN Card is received, the KYC (Know Your Customer) formalities have to be started. This is mandatory for investments. The above rule has been brought in by the SEBI to prevent money laundering and create greater transparency in the system. The compliance scans your basic identification, address, resident status and nationality. The PAN Card is a mandatory document for complying with the KYC requirements. In the case of a non-Indian Citizen, but of Indian Origin, the PIO/OCI card is compulsory to be submitted along with the KYC.

The documents required for this are:

  • PAN Card (Compulsory document – it will act as an Identification proof) – to be signed
  • Proof of Address (Indian / Overseas) It can be same as one submitted for PAN Application and includes Utility bills, driving license, Passport, or bank statements.
  • Other documents depending on your nationality. As mentioned above, a non-Indian Citizen has to provide either an OCI or PIO card.
  • Passport sized photograph with a signature across it

Things to take care of:

  • All documents need to be self attested
  • Any overwriting has to be countersigned by the respective individual
  • KYC form has one signature in the bottom of the page (box) & one signature across the photograph.

 

Step III – Obtaining a OCI/PIO Card

This process is important if you are a non-Indian citizen and want to obtain the above listed documents and make investments in India.

Who is eligible for a “Persons of Indian Origin (PIO)” Card?

All persons of Indian origin who hold passport of any other country (not being a citizen of Pakistan, Bangladesh and other countries that may be specified by the Central Government from time to time – at present nationals of Sri Lanka, Afghanistan, Bhutan, Nepal, China and Iran are also included in this category) will be eligible to apply for PIO Card, if:-

1. He/She at any time held an Indian passport; or

2. He/She or either of his/her parents or grandparents or great grandparents was born in and permanently resident in Indian as defined in the Govt. of India Act, 1935, and other territories that became part of India thereafter provided neither was at any time a citizen of any of the aforesaid countries in first paragraph; or

3. He/ She is a spouse of a citizen of India or a person of Indian origin Covered under (I) or (2) above

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