Skip to main content

Investment by NRI onRepatriation Basis and Non-Repatriation Basis

Government of India has provided special treatment to NRIs for providing flexibility to invest through different commercial feasible structures under the extant Consolidated FDI Policy of 2017 (“FDI Policy”) and the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 (“TISPRO Regulations”) issued by the Reserve Bank of India (“RBI”), without losing their status and benefits available as ‘non-residents’.TISPRO Regulations allow NRI investors to invest in India, either on repatriation basis or non-repatriation basis. So, what is repatriation or non-repatriation basisinvestment?
1.      TwoOptions of Investments
For all investments in mutual funds made through the money remitted from abroad, the redemption proceeds can be remitted back to the originating account (NRE or FCNR) and can be repatriated. Such investments are called Repatriable investments.On the other hand, investments made in mutual funds secured through the money sourced from an NRO account cannot be taken outside India and have to be retained in India such investments are called Non- Repatriable Investments.
2.      Which is Better?
The benefit of making an investment on the non-repatriation basis lies in the fact that the investments so made are considered as domestic investments and can be made without any limit, in contrast to the investment made on a repatriation basis, where the investor has to adhere to the sector guidelines. 

3.      Transfer of Share
Repatriation basis: The transfer can be made to any person resident outside India on repatriation basis. The transfer shall be made under schedule 1 of TISPRO and shall be subject to the sectoral caps and the filing requirements with RBI.
Non-Repatriation basis: As sale to any other NRI or OCI or as a gift to any other NRI or OCI who agrees to hold the instruments on a non-repatriation basis.
4.      Permission to Invest
·         On Repatriation Basis, NRIs may invest in the following:
a.       Government dated securities / Treasury bills
b.      Units of domestic Mutual funds
c.       Bonds issued by a Public Sector Undertaking (PSU) in India
d.      Non-convertible debentures of a company incorporated in India
e.      Perpetual debt instruments and debt capital instruments issued by Banks in India
f.        Shares in Public Sector Enterprises being disinvested by the Government of India, provided the purchase is in accordance with the terms and conditions stipulated in the notice inviting bids
g.       Shares and convertible debentures of Indian companies under FDI scheme (including automatic route &FIPB)
h.      Shares and convertible debentures of Indian companies through stock exchange under Portfolio Investment Scheme
·         On Non repatriation Basis, NRIs may invest in the following:
a.       Government dated securities/Treasury bills
b.      Units of domestic Mutual funds
c.       Units of Money Market Mutual Funds
d.      National Plan/Savings Certificates
e.      Non-convertible debentures of a company incorporated in India
f.        Shares and convertible debentures of Indian companies through stock exchange under Portfolio Investment Scheme
g.       Exchange traded derivative contracts approved by the SEBI, from time to time, out of INR funds held in India on a non-repatriable basis, subject to the limits prescribed by the SEBI


The information provided in this article is generic in nature and for informational purposes only. It is in no manner can act as a substitute for specific advice in your own circumstances. We strongly recommend you to seek professional guidance pertaining to your query or doubt.

Comments

Post a Comment

Popular posts from this blog

The Pushkar Mela 2019

The Pushkar Mela also is known as the Pushkar Camel Fair is a unique celebration of the beauty of the coveted “ship of the desert” – the camel along with some other cattle. It is estimated that more than 2 lakh people from all around the world visit this unique mela, which mainly focuses on trading camels and cattle, camel races which are the main attraction and a variety of other cultural performances and art exhibits. This year the dates of the Mela (Fair) are from 4th to 12th November 2019. The Pushkar Mela is also a holy pilgrimage for Hindus, pilgrims that visit Pushkar come to take a holy dip in the Pushkar Lake and offer prayer to Lord Brahma, the deity residing in the temple at Pushkar. It is said to be the only temple of the deity in the country, which makes it an important pilgrimage spot for people of faith. The Pushkar Mela creates a grand event cherished with a huge carnival including an array of musicians, magicians, dancers, acrobats, snake charmers ...
1 comment
Read more

Six Steps for NRIs on How to Invest in Mutual Funds

NRIs can invest in mutual funds in India – as long as they adhere to the Foreign Exchange Management Act (FEMA). Here are few steps that will smoothen your investment process: 1.       Open an Account An NRI needs to open an NRE or NRO account. NRIs can invest in repatriable or non-repatriable basis using funds from the NRE or NRO accounts respectively. 2.       Get KYC Done  Even if an NRI has already done a complete Know Your Client process, s/he still needs to do KYC again after achieving non-resident status. Important documents required for NRI Mutual Fund investment KYC includes PAN Card, Proof of Foreign Address Residence, Passport and Cancelled Cheque of NRE/NRO Account. 3.       Two Ways to Invest Once KYC is completed, an NRI can start making investments into domestic mutual funds as an NRI investor.  There are two routes to do that—directly through normal banking channels o...
Post a Comment
Read more

Can an NRI avail Aadhar Card?

To answer whether an NRI can avail Aadhar Card or not? Unique Identification Authority of India states that“As per the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, only a resident who has resided in India for a period or periods amounting in all to 182 days or more in the 12 months immediately preceding the date of application for enrolment is eligible for Aadhaar.”So, if you fulfill these eligibility norms then here are the five steps that you need to follow to avail Aadhar Card: Step 1.  Visit the official website of UIDAI– https://uidai.gov.in/ – and find an enrolment center  authorized by UIDAI to you. Step 2.  Fix an appointment online or visit the enrolment center directly with documents such as resident proof, birth certificate, and PAN card along with the Aadhaar card application form Step 3. After verifying your submitted documents, the official at the enrolment center will take you biometric details (thro...
Post a Comment
Read more