In the Indian equity market, Non-Resident Indians (NRIs) have become increasingly active participants alongside Foreign Institutional Investors (FIIs) and domestic investors. NRIs who want to trade in the Indian stock market must first register a Demat account and then a Trading account. Here’s a full guide to what these accounts are and how NRIs can open and manage them through Indian broking businesses.
What is an NRI Demat Account?
An NRI Demat account is mandatory for NRIs who want to invest in Indian capital markets comprising stocks, bonds and mutual fund investments. This account maintains shares and other securities in electronic form, so that NRIs can easily invest in the stock markets of India. There are two kinds of NRI Demat accounts:
- Non-Resident External (NRE) Demat Account:
It lets you full return of both the amount of money invested and the earned profits. It is aimed at stock market investments and has to be connected to an NRE current account.
- Non-Resident Ordinary (NRO) Demat Account:
This account is non-interest bearing and non-convertible; the only money that can be returned is the principal amount at up to $1 million annually. It can therefore be applied to a number of other investments such as stocks, bonds and other mutual investment.
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Documents Required for Opening an NRI Demat Account
To open an NRI Demat and trading account, the following documents are needed:
Identity Proof:
When applying for an NRI Demat account, you must provide your passport as proof of identity and citizenship, as well as your PAN card for tax identification reasons in India.
Proof of Residence:
Foreign and Indian address proofs
Bank Proof:
Bank account statement of two months, cancelled cheque, and RBI PIS permission
Additional Documents:
The documents which are accepted include; Valid visa for the respective country, overstay visa, OCI/PIO card, Tax proof and mariner’s declaration for MERCHANT NAVY NRIS.
How to Open an NRI Demat Account
- Choose a Brokerage:
NRIs can choose any Indian brokers. Each of these brokerage firms has a unique account opening procedure; some of them permitting online or offline procedures.
- Submit Documents:
Customer should submit the necessary documents such as the approval of the PIS, PAN, passport, bank proof, and address proof.
- In-Person Verification (IPV):
An NRI living in a foreign country requires documents attested by the Indian Embassy, notary public or an overseas banker. However, in India, only a self-attested arrival copy and local verification are needed.
- Account Processing:
After the broker scrutinises your documents, your NRI Demat and trading account will be operational.
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Conclusion
Opening a Demat account as an NRI may appear complicated, but it is relatively simple if you have the appropriate guidance. You’ll be ready to invest in no time once you grasp the documentation required, the sorts of Demat accounts accessible, and the step-by-step process. Whether you pick a NRE account or a non-repatriable NRO account, brokers will have the process simple and straightforward. So, follow the procedures given above to complete your KYC and begin your investment experience in one of the world’s fastest-growing markets!
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