nri

who is non resident indians

Who is an NRI?

By admin_mutual | Jan 31, 2023

A non-resident is someone who does not domicile in a given region but has a business or other interests in that region. A “non-resident Indian” is someone who spends less than 182 days in India during the preceding financial year. An NRI is also an individual who has left the country for job purposes. He is a person who travels to another country for business purposes.

He is somebody who is not considered an immigrant, whether he / she was born in India or has Indian citizenship. This includes citizens of countries like the United States, Canada, and Great Britain who are not considered immigrants because their parents were born in those countries. In addition, NRIs can include people with dual citizenship who have never traveled outside of their home country.

There has been a recent surge in investment into India by international companies, prompting many NRIs to ask: Where should I be investing my money? The answer does not always consist of a straight answer or a clear-cut investment strategy. Factors that you should consider, when making investment choices in India, include:

  • The economy,
  • Demand growth,
  • Political stability and stance of the government
  • Infrastructure
  • Education and skill development levels
  • Financial inclusion
  • Business environment etc
  • List

Why are NRIs Investing in India?

There are many reasons why NRIs are considering investing in India. Here are just a few:

  • The country is growing at a rapid pace, with an average annual growth rate of 7% projected for the next decade. The market size is expected to reach US$6 trillion by 2026.
  • The Indian economy is increasingly becoming integrated with the global economy. As a result, opportunities for multinational corporations (MNCs) are increasing. India has also emerged as one of the world’s top 10 economies and is expected to be the third largest economy by 2035.
  • ROI from projects in India are high, owing to the country’s well-developed infrastructure and strong intellectual property protection laws. Foreign investors can enjoy excellent foreign exchange and capital gain prospects through investment in this rapidly expanding market.
  • The cost of living in India is moderate when compared to other countries in South Asia and East Asia, making it possible for foreigners to live and work there on moderately low salaries.
  • There are state-of-the art infrastructures in India, which offer compelling value propositions for businesses that open up in the country.

NRI and Mutual Funds Investment

Except for the rupee, Indian mutual fund institutions do not accept any other currency to accept investments. NRIs who wish to make mutual funds investment must do it in rupees.

NRIs who want to invest in mutual funds must create any of these accounts:

  • NRO (Non-Resident Ordinary Rupee Account),
  • FCNR (Foreign Currency Non-Resident Account), or
  • NRE Account (Non-Resident External Rupee Account).

NRE accounts may be opened with funds from either local or foreign sources. These are essentially rupee accounts that may be used for returning money to the investor’s home country.

While FCNR accounts are fairly similar to NRE accounts with the exception that the money is maintained in an international currency, NRO accounts are more or less non-repatriable rupee accounts.

Direct debit can be used by NRIs to purchase mutual fund shares. The money will either be taken out of their NRE or NRO account or sent through standard banking methods. NRIs must present a cheque or rupee draft from their NRO or NRE accounts. When investing using cheques or drafts, the application form must be accompanied by a FIRC letter or a bank confirmation letter. Both of these documents are acceptable as proof of payment. In the list of KYC papers, PAN and address verification are required for submission.

 

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