NRIs are allowed to open Demat accounts, but they must adhere to the Foreign Exchange Management Act’s regulations (FEMA)
NRIs can make money on the Indian stock market. Many non-resident Indians (NRIs) are interested in getting a piece of India’s economic pie by investing in the stock market there.
Shares are kept in dematerialized electronic form in a Demat account. Opening a Demat account is the first step in stock investing. NRIs can open a depository receipt and a trading account to trade stocks. However, to open Demat account must follow a different process than resident Indians.
To invest in India’s secondary market, NRIs must obtain RBI approval for a PIS (Portfolio Investment Scheme). Because all investments made through NRI accounts must be reported to the RBI, PIS approval is required.
Examples of NRI Demat accounts:
Both repatriable and non-repatriable Demat accounts are available to NRIs. You’ll need a PINS (Portfolio Investment Scheme) Account to buy shares on the secondary market.
Repatriable Demat Account:
If you have money that can be taken out of the country, you should keep it in a separate account called an NRE. These types of accounts are used to store money that has been shipped in from another country. There are no restrictions on using the money from the sale of these funds. These investments must be held in a Demat account that can be accessed from outside the United States.
Non- repatriable Demat Account (NRD):
Funds that cannot be taken back home should be kept separate from those that can. NRO accounts should be used for these funds. The sale proceeds of these investments cannot be taken outside of the country. A non-repatriable Demat account must be used to store the investments. NRIs can invest in IPOs with funds in their NRE accounts and have their money repatriated. This is the only way an NRI can invest in the secondary market. You can install any share market app for your help.
Demat account opening for NRIs:
An NRI needs to understand that a Demat and trading account cannot be converted to new residency status. It’s possible to change the status of a Resident Bank account to that of an NRO. They also need PIS approval if they want to make new investments.
The steps involved in opening a Demat account as an NRI
NRIs who want to open a Demat account can either visit the DP’s offices in India or open an account online from their home country (if they are abroad). Suppose an NRI is interested in opening a Demat account. What he needs to do is outlined here.
The offline process
NRIs can only open an offline NRI account if they are physically present in India. With the help of sourcing staff, they can visit a branch of their broker and fill out the account opening form. As part of the account opening process, they must submit the valid official documents (OVD) list, which can be found in the application form. After the submitted documents are checked against the originals by a representative from the DP’s office, an NRI Demat account is opened. If they prefer, they can walk into the nearest Center or branch of a Bank/broker and hand over their completed account opening form.
The online process
After moving abroad, NRIs who want to open Demat accounts can do so online. Such NRIs must first submit a request to open an account via the broker’s website. An office representative in charge of online applications contacts NRI customers who have requested assistance filling out the account opening form. NRIs are required to submit the OVD list of necessary documents. On the other hand, NRIs must have their original documents authenticated by their local bank or the Indian Embassy in their home country. Courier sends the account opening form and the verified documents to the DPs representative, who picks them up and delivers them. After that, the request is handled in India, and an NRI Demat account is made available to you.
As can be seen, the procedure for opening a Demat account for a non-resident Indian is very similar to that for a resident Indian. When opening a Demat account with your preferred DP, you must select the correct subtype of account when filling out the paperwork.