What Non-Resident Investors Really Need to Know About Opening an NRI Demat Account

Non-Resident Indians (NRIs) often desire to engage in the Indian stock market again, but the requirements for doing so are different from those for resident accounts. Once you know what you need to do and what you can’t do, it’s easy to open an NRI Demat Account.

The Most Important Decision: NRE vs. NRO NRI Demat Account

NRE Demat Account: You can totally send money back home. There are no prohibitions on sending money from sales, dividends, or capital gains to other countries. Great for NRIs who desire the most freedom.

You can only send money back to your home country through an NRO Demat Account up to USD 1 million per year (with some constraints). Good for people whose income comes from India, such rent, a pension, or an inheritance.

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For ease of use and full repatriation benefits, most NRIs choose to start with an NRE Demat Account.

What You Need to Open a Demat Account

The list is a little longer than it is for resident accounts:

• A passport that is still good
• PAN card and OCI/PIO card
• Abroad address proof
• Indian address proof
• Recent pictures the size of a passport
• Proof of an NRE or NRO bank account (a canceled check or statement)
• FATCA/CRS self-certification form

Many brokers now accept scanned copies and do the whole verification process using video KYC, so you don’t have to send in the originals in most circumstances.

How to Open an NRI Demat Account in Steps

• Choose a broker that has solid NRI services, good help for sending money back home, and a platform that is easy to use.
• Visit the broker’s website and click on the “NRI Account Opening” link.
• Fill up the online application form with your personal, banking, and investment information.
• Finish the video KYC, which is a short video call with the broker’s boss.
• Put all the necessary papers in the right format and upload them.
• Sign the documents and agreements for opening an account online.
• Connect your NRE or NRO bank account to send money.

The whole process of how to open Demat Account usually takes 3 to 7 business days, depending on how long it takes to check the documents and get any other questions answered.

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Important Rules NRIs Should Be Aware Of

• Some types of derivative products and intraday trading may not be allowed or may have limits.
• Without permission from the RBI, NRIs can’t invest in agricultural land, plantation enterprises, or several other limited sectors.
• TDS applies to all transactions involving dividends and capital gains (the rates depend on how long you keep the investment and the benefits of the DTAA).
• Regulatory authorities need to keep an eye on NRI holdings that brokers report.

It’s now easy to open an NRI Demat Account because most brokers offer online video KYC and help just for NRIs. Non-resident investors can set up their accounts with confidence if they carefully choose between NRE and NRO, get the proper paperwork ready, and know the laws for repatriation and taxes ahead of time.