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FAQ'S |
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Q.
How can a NRI open a demat account in India?
Burgeon enables NRIs, PIOs and OCIs to open Demat
Accounts short for dematerialization account, in
India. Through this DMAT Account Non Resident Indians
can transfer shares from one account to another,
buy and sell Indian shares online, demat shares
and all in all this NRI Demat Account helps to demat
stocks but also lets NRIs - Non resident Indians
to do trading in the Indian Stock Market. If you
want to dematerialize your physical shares then
this is just the right account for you.
This India's Demat account will simplify your investment
process & Demating needs in the Indian share
market. Please contact us at concierge@burgeonwealthadvisors.com
to start your process of opening up a dematerialization
account. |
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Q.
I am a NRI. How can I exercise my ESOPs?
Incase the ESOP was purchased using INR from
a local Indian bank (NRO Status):
Three Accounts are needed (we assist you in opening
these 3 accounts):
- NRO Bank Account (Non Resident - non repatriable)
- NRO Demat Account
- Trading Account
| Once these 3 Accounts
are opened, you need to follow these steps: |
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| Step1 :
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Broker holding
trading account sends The Client Master Details
to the client. |
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Client provides these details
to his employee. |
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| Step3 : |
Employer deposits the shares
in the client’s DMAT Account. |
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| Step4 : |
The client can hold or sell
these shares using his trading account. |
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| Once the shares
are sold, a cheque in INR for the value of
shares sold is deposited in the clients NRO
Bank. |
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| You’re
done..!! |
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| Incase
the ESOP was purchased using foreign currency/INR
held on repatriable basis (NRE Status): |
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Three Accounts
are needed (we assist you in opening these
3 accounts):
- NRE Bank Account (Non Resident - repatriable)
- NRE Demat Account
- Trading Account
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| Once these 3 Accounts
are opened, you need to follow these steps: |
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| Step1 : |
Broker holding trading account
sends The Client Master Details to the client. |
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| Step2 : |
Client provides these details
to his employee. |
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| Step3 : |
Employer deposits the shares
in the client’s DMAT Account. |
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| Step4 : |
The client can hold or sell
these shares using his trading account. |
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**
As this ESOP was purchased in NRE status,
the client would have to get an Auditors
Certificate. Our broker will get Auditor’s
certificate on your behalf (current fee
that auditor takes is between Rs.2800 to
Rs.3100). |
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| However in order
to attain an Auditors Certificate; the client
needs to provide us the following details: |
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Wire/Fund transfer details:
Bank entry showing that the funds were transferred
from the employee to the employer to |
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purchase the ESOP. |
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b) |
Allotment letter, that the
client had received the ESOPs. |
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| As soon as the
Auditor Certificate is obtained by the broker,
the client can go ahead and sell the shares
and the cheque containing the proceeds is
deposited in the client’s NRE Bank account. |
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| You’re
done..!! |
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Q.
I am a NRI and I am confused about what taxation rules
apply to me?
We can
facilitate Professional Tax Services for
NRIs: Indian Income Tax Rules are not a
cup of tea for everyone. And if the person
concerned is a non-resident, understanding
the same is definitely not a cakewalk. For
this very reason, we, at Burgeon, give you
few of the basic, but pivotal, guidelines
for filing tax returns online in India if
you are a non-resident Indian living abroad
and want to learn more aboutIndian taxation
then you have come to the right place. |
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| Before anything else, we would
like to tell all our non-resident clients
that it is extremely important to quote your
PAN for being able to have any financial transaction
& file taxes. |
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At the
outset, if you are a resident Indian, about
to take up employment abroad, the first
task before you is filing for an Income
Tax Clearance Certificate (Form 31), as
per Section 230 (I) of the Income Tax Act
1961. The Assessing Officer would provide
Form 32 authorising the application. |
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If you
are wondering how much of paperwork you
need to do before departing, then relax!
You have to only fill up Form 31. The IT
Department does not require any other information
from you. But if you fall in the contrary
sector, that is, if you are a non-resident
working in India, you HAVE to file tax returns
for as per IT rules, any income earned anywhere
in the Indian territory is taxable. Please
note that non-residents do not have to pay
tax IF the same has been deducted at source.
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At the
same time, if you are a non-resident living
in India, but if your income is being earned
by you from anywhere OUTSIDE the Indian
Territory, you DO NOT need to pay tax. As
stated above, only those incomes are taxable
that is generated from within the Indian
Territory. |
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Coming
to stocks, if you are a non-resident selling
stocks you are not chargeable. However a
resident Indian has to comply by the tax
guidelines and pay tax. |
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Do I have
to pay tax in GDR and ADR of an Indian Company?
This is a question we often frequent. The
answer to this depends on your residential
status. GDR and ADR are foreign securities,
and so non-residents need not pay tax on
the same. |
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Are you
happy that being a non-resident you have
so many benefits vis-a-vis payment of tax?
If yes, then think again for if you are
a non-resident investing in the Indian Share
Market, you NEED to file tax returns, as
the income you thus earn is from within
the Indian Territory. The same holds true
in the case if you are a non-resident working
in India (say as a consultant). As your
salary is coming from within the Indian
Territory, your salary is taxable. |
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Are you
a non-resident coming back to your homeland?
And you think you will have to pay tax upon
arrival? You can stop thinking in this case.
You DO NOT have to pay any kind of tax whatsoever
as your savings is from income earned and
received abroad. Many countries do not have/share
a Double Taxation Agreement with other countries.
India is no exception. Thus in such cases,
certain deductions are allowed based on
proof that tax has been paid in the resident
country. |
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We also
get queries from people who are resident
Indians but are working abroad on a short-term
assignment. They often ask whether they
have to pay tax, as they are not non-residents
yet their income is not generated from within
Indian Territory. Well, all of you, who
come in this category, the answer to your
question is YES. Since you are a resident
Indian, you have to pay tax. For technicians
(these include individuals working on construction,
manufacturing, mining, power generation
etc, agricultural activities, public administration
and business management, accountancy, applied
sciences, and social sciences) a deduction
of 75% is applied within six months at the
end of the financial year under Section
80RRA. The rest of the allowance is taxed
at a marginal rate. |
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If you
are an Indian deployed outside by your Indian
company, your salary/allowance IS taxable.
Here too technicians are permitted to facilitate
75% tax deduction benefits under Section
80 RRA, within six months at the end of
the financial year. The remaining 25% income
is taxable at a marginal rate. |
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We would
like to conclude at good news If you are
a non-resident returning to India, you DO
NOT have to pay tax for seven successive
years on money and assets acquired a year
before your return to India. To top it,
your NRE Account is also exempt from tax
in India. |
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Q.
Besides stocks and mutual funds, what are some of the
other products available to a NRI like me in India?
| Great Products
for NRIs: |
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o Pension Plans |
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o Fixed Deposits |
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o Retirement Solutions |
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o Child Education Plans |
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o Life Insurance Policies |
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o Tax Benefit Plans |
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o Long-Term Saving Plan |
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Whether
it is to take care of your parents with a
regular income from a pension product or building
a corpus for education in the event you plan
to send your children to study for some period
of time in India, the above mentioned solutions
are available to you. |
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Even
fixed deposits in India typically yield 3-4%
higher than the rate available in U.S. or
Europe. We can help with the appropriate product(s)
to serve your needs. Email us at concierge@burgeonwealthadvisors.com. |
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Q.
Why is Insurance important?
Life insurance
is important because life itself is extremely
precious. What began as a measure to reduce
the risk of traders and merchants has today
become a pivotal part of all civilians' lives.
Life insurance guarantees the enjoyment of
the same lifestyle even after the unfortunate
demise of a loved one. The beneficiaries can
utilize the money as a source of income or
to pay off debts, amongst others. |
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Burgeonis
now here to help you find the right life insurance
policy for you. Though it is difficult to
pin down that one particular policy suited
for you, specially with choices varying between
term life insurance, ULIPS, endowment plans
and whole life policies, with the help of
technology we can definitely help you find
one that satisfies your needs. All you need
to do is fill up the online form provided
and our expert would help you get hold of
the best life insurance policy from dependable
insurers. |
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At Burgeon,
we are ready to serve our clients 24x7 with
our user-friendly portal, world-class service
and expert team. As we are not affiliated
with just one insurance company, you can be
assured of getting the best deals and free
insurance quotes from various Indian insurance
companies offering NRI insurance services
online. You are also shown the entire choice-making
process. |
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Booking
insurance through us is fast, reliable and
easy. As a professional team, we show evidence
of the same in all our dealings and hence
win not only great customers buy also wonderful
friends. |
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Shoe of
the same size does not fit all, and hence
we try to get tailor-made policies for our
clients as we understand your exact requirements
and desire your full satisfaction. In addition,
we offer our clients a unique id. With this
you can log in and check the details of the
insurance purchased as well as other details. |
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Burgeon's
free investment advice enables dealings on
a one to one basis giving that personal touch.
If you would like to personally meet our advisor
at a time and place convenient to you, such
a meeting can be arranged. All you have to
provide us with is some basic information
& our advisor will get in touch with you. |
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Q.
I am a NRI. Can you assist me in opening a bank account
in India?
| NRIs can open the following Indian
Bank Accounts with our assistance: |
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NRE
Account (Non-Resident External
Account): To park your overseas earnings in
rupee denominated savings, current, fixed
and recurring deposit accounts. Principal
and interest fully repatriable and you can
also use this account for foreign remittances
as well. |
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| NRO Account (Non-Resident
Ordinary Account): To park your Indian earnings
in rupee denominated savings, current, fixed
and recurring deposit accounts. Conditional
repatriability possible. |
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| FCNR Account:
(Foreign Currency Non Resident Account): To
park your overseas earnings in Foreign Currency
Fixed deposits account and mitigate the risk
of exchange rate fluctuations. Principal and
interest fully repatriable. |
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| PIS (Portfolio
Investment Scheme): To invest in Indian Secondary
market on repatriable and non repatriable basis
via designated branches of Axis Bank. |
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| RFC (Resident
Foreign Currency Account): To retain your funds
in foreign currency in case you are returning
back to India for good. |
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Q.
I am a NRI. I understand a PAN number is now compulsory
for all financial transactions. Can you assist me in
getting a PAN?
We provide PAN Number
Assistance Services to:
- Non Residents (NRIs)
- PIOs
- OCIs
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| Through us
you can: |
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Get PAN Number for:
Family, Company, Minors, etc. |
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Register for a New or a Duplicate
(lost) PAN Card. |
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Make Name, Address or any kind
of PAN Correction. |
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Apply for any kind of update
or change in your card. |
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Q.
What is a PAN Card?
PAN stands
for permanent account number which is now
mandatory as per the Indian IT department
if one needs to invest in India, file income
tax returns or want to conduct any kind of
financial & investment related transaction.
Basically a Permanent Account Number (PAN)
refers to a 10 digit alphanumeric number,
issued in the form of a laminated card by
the Income Tax Department in India. |
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We at Burgeon
assist Non resident Indians & Person of
India origin - PIO clients to apply for a
pan card. Our goal is to guide non resident
Indians to register for their pan numbers.
For this very purpose we assist them in downloading
pan application and later helping them to
fill up the pan form. |
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Q.
I am a NRI and am interested in trading Forex in India
We can assist you in opening Indian forex accounts
that enables you to conduct forex trading .
Currency Futures Trading in India
There has always been a big debate
about whether forex trading is legal or illegal
in India. Well it is very much legal to trade FX
in India if you are doing it through the NSE. Last
October, India kicked off currency derivatives or
Indian FXTrading in other words, after decades of
leaving investors without the option of making money
from this lucrative opportunity, the Indian forex
market has been opened for traders & investors.
There were markets for non deliverable forward trading
offshore earlier with the RBI monitoring domestic
forward trading in currency. But currency futures
were banned until the RBI decided to toy with the
idea after Indian rupee futures began trading on
the Dubai Gold and Commodities Exchange (DGCX).
70,000 contracts on the first day
It led to the start of the first
currency futures trading at the National Stock Exchange
(NSE) in India launched by the Finance Minister
at that time, P Chidambaram. He spoke about developing
the bond and derivatives market with interest rate
futures in and secure credit derivatives market.
As it got launched on August 29, 2008, interest
was up and running with nearly 11 banks and 300
trading members registering and transacting nearly
70,000 contracts in a single day, with great fluctuations
in the Indian forex rates. East India Securities
conducted the first trade and among the banks, HDFC
was the first to transact business. Of the total
business done on that day, transactions by banks
accounted for 40% of the total trade. The Reserve
bank of India (RBI), happy with the proceedings
went on to allow currency futures trading at the
selected exchanges across India. Later, a plan was
drawn up for setting up a futures market for currency
with the help of RBI and the capital market monitoring
organization, Securities and Exchange Board of India
(SEBI). Now forex traders are easily trading US
dollar against the rupee. Recently, some other pairs
have been introduced as well.
If you want to do futures trading
in currency or want to enter the forex market of
India to trade various currency pairs online, then
we can provide you all the facilities ramped up
to suit your requirement. It was the NSE that first
allowed to trade in futures although applications
were sent in by the Bombay Stock Exchange (BSE)
& MCX or the Multi Commodity Exchange. Primarily,
the step to open up futures trading in currency
was taken to provide companies with increasing flexibility
and infuse more liquidity into the market. You may
do it individually, involve your company or institution
that could also be a bank to buy or sell the currency
of your choice at a predetermined date and price.
Enriching India's financial sector
The opening up of the currency
futures trading in India was done primarily to facilitate
opening up and enriching the financial sector as
well. It was happening elsewhere like in Dubai and
everything was smooth, but the benefit wasn't being
ploughed back into India. With the deregulation
and RBI monitoring, India would be getting a slice
of the large volumes that are traded in the currency
markets. As financial markets in India get ramped
up, the move was greeted with cheers by the operators
and banks across India and abroad. But there is
a flip side to it. India failed to take advantage
of the growing clout of the Chinese Yuan and has
made derivatives trading other than the US dollar
difficult. It is a short sighted move as the Chinese
Yuan is gaining more prominence these days. China
has even suggested to the US to allow the Yuan its
rightful place among global currencies as the greenback
is losing its luster. Yuan trading is being marketed
aggressively by China and it would be another missed
opportunity as Yuan-Rupee or the dollar-Yuan transactions
are still not on. It's a scenario of 'better late
than never' for currency futures trading in India
although options trading & trades above $5 million
are not allowed. As the Indian economy continues
to soar, experts feel the onset and rapid globalization
that is taking place would enable the currency futures
trading market in India to kick off fast.
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Q.
I am a NRI. Can I get loans in India?
We can assist you in getting
the following kinds of loans in India :
- Home Loans
- Business Loans
- Auto Loans
- Education Loans
- Personal Loans
- All Other Loans
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| Burgeon can assist you in getting
these kinds of loans. Please feel free to email
us directly at : concierge@burgeonwealthadvisors.com |
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| Loans from India available
to NRIs |
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Today there
are a lot of loans available to Non Resident
Indians (NRIs), People of India Origin (PIOs)
and Overseas Citizens of India (OCIs). Government
of India has come up with various schemes. |
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A Non Residential
Indian or an NRI is a person who is residing
outside the Indian Territory and is pursuing
a career somewhere in the world. The only
problem is that they have to pay a high rate
of interest. |
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Housing
loans, debt consolidation loans, car or automobile
loans and mortgage loans are the kind of loans
available in the market as of now. Even secured
and unsecured loans are available quite easily
all you need is to simply walk into a bank
branch and sign a few papers as most of the
banks have associates in almost every country
now days |
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India loans available to NRIs
are no different than the loans available to
a Resident Indian. However there a few additions
made by the Reserve Bank of India like:
- An India Loan is easy to get.
- The copy of their valid Indian Passport
has to be ready.
- Any NRI who is above 21 years of age is
eligible for a loan.
- NRIs should be a graduate for an NRI loan.
- In addition to this the RBI states that
NRIs who have some kind of property in India
are eligible to get a loan (Some exceptions
are there).
- NRIs with a minimum regular monthly income
of Rs.10000 or $2000 are eligible to get
a loan.
- The repayment of loan is between a span
of 10 to 15 years. Needless to say that
an NRI needs to pay from either an NRO or
an NRE account.
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Q.
Can NRIs invest their funds in Government securities
or Units of Unit Trust of India(UTI)?
| Yes. NRIs are freely permitted
to invest their funds in Government securities
or Units of UTI through authorised dealers.
Units can also be purchased directly from UTI. |
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Q.
Can NRIs make investments in National Savings Certificates
issued by Post Offices in India?
Yes. Investments
in National Savings Certificates can be made
by NRIs subject to the terms and conditions
applicable to the sale/issue of such certificates.
However, NRIs are not permitted to invest
in bearer securities like Indira Vikas Patra/Kisan
Vikas Patra. |
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Q.
Can Government securities/units be freely transferred
or sold?
| Yes, provided the transfers/sales
are arranged through an authorised dealer. Units
can, however, be repurchased directly by UTI. |
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Q.
Are sale/maturity proceeds of Government securities/Units/National
Savings Certificates allowed to be repatriated abroad?
If such
securities were purchased out of funds remitted
from abroad or out of NRE/FCNR accounts, sale/maturity
proceeds can be repatriated. Sale/maturity
proceeds of securities purchased out of funds
in NRO accounts can only be credited to NRO
accounts and cannot be remitted abroad. Interest
earned during the financial year 1994- 95
and onwards can, however, be remitted to the
extent permitted by Reserve Bank. (See Answers
to Questions Below) |
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Q.
Can NRI's invest in companies in India?
NRIs are
permitted to make direct investments in proprietary/partnership
concerns in India as also in shares/debentures
of Indian companies. They are also permitted
to make portfolio investments i.e. purchase
of shares/debentures of Indian companies through
stock exchanges in India. These facilities
are granted both on repatriation and non repatriation
basis. |
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Q.
Is permission of Reserve Bank required for NRIs to invest
in proprietary/partnership concerns on non- repatriation
basis ?
No. Reserve
Bank has granted general permission to non-
resident individuals of Indian nationality/origin
to invest by way of capital contribution in
any proprietary or partnership concern in
India on non- repatriation basis provided
the investee concern is not engaged in any
agricultural/plantation activity or real estate
business. This facility is, however, not available
to OCBs. |
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No. Indian
companies have been granted general permission
to accept investments on non-repatriation
basis, in shares/convertible debentures by
way of new/rights/bonus issue provided the
investee company is not engaged in agricultural
/plantation activity or real estate business(excluding
real estate development i.e. development of
property and construction of houses). or chit
fund or is not a Nidhi company |
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Are any formalities required to be completed by NRIs
for getting the benefit of the above general permission
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No. However,
the firms/companies concerned are required
to file declarations with Reserve Bank in
form DIN giving particulars of the investments
made. within ninety days from the date of
the investment |
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Q.
Can NRI individuals make investments in domestic public/private
sector Mutual Funds or Money Market Mutual Funds floated
by commercial banks and public/private sector financial
institution on non/repatriation basis ? |
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Q.
Can Overseas Corporate Bodies make similar investments
in mutual funds on non-repatriation basis?
OCBs can
make such investments only in domestic public/
private sector Mutual Funds. They can also
make investments in Money Market Mutual Funds. |
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Q.
Can NRIs make investments in non-convertible debentures
of Indian companies?
Yes. Applications
for necessary permission should be made to
Reserve Bank (Central Office) by the concerned
Indian Company in form ISD. |
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Q.
Can NRIs purchase existing shares/debentures of Indian
companies by private arrangement?
Yes.
Reserve Bank permits NRIs , on application
in form FNC 7, to purchase shares/debentures
of existing Indian companies on non-repatriation
basis. An undertaking about non-repatriation
is to be given in form NRU. |
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Q.
Is it necessary for a resident, holding securities in
Indian companies, to secure any approval from Reserve
Bank on his becoming a non-resident for holding such
securities?
| No. Reserve
Bank has granted general permission to companies
in India to enter the overseas addresses of
the shareholders in their books in such cases
provided the companies obtain undertakings from
the holders that they will not seek repatriation
of any income or sale proceeds of the security. |
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Q.
Is income/interest earned on investments/deposits held
in India by NRIs on non-repatriation basis allowed to
be repatriated?
Yes.
Income/interest accruing during the financial
year 1994-95 and onwards on bank deposits
and investments held by NRIs with non-repatriation
benefits will be eligible for repatriation
as under : |
a.
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Up to U.S. $ 1,000
or its equivalent in full and one-third of the
balance income earned during the financial year
1994-95. |
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Up to U.S. $ 1,000 or its equivalent
in full and two third of the balance income
earned during the financial year 1995-96. |
c. |
The entire income earned during
the financial year 1996-97 and onwards. |
d. |
The entire income earned during
the financial year 1996-97 and onwards. |
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| Note :
The investment/principal amount of deposits
made/held on non-repatriation basis will, however,
not be allowed to be repatriated abroad. |
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Q.
What is the procedure to be followed for seeking repatriation
in such cases ?
NRIs should
designate a branch of an authorized dealer
through whom the remittance of income is to
be made and make an application in form RCI
to the designated branch giving details of
incomes earned during the previous financial
year along with a Chartered Accountant's Certificate.
The designated branch will allow the remittance
of net amount (i.e. after payment of tax)
or credit it to NRE/FCNR account of the applicant. |
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| Direct Investment with
Repatriation Benefits |
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Q.
What are the schemes available to NRIs for direct investments
in India with repatriation benefits?
NRIs can
make investments in new issues of shares/convertible
debentures of Indian companies under direct
investment schemes such as 24% scheme/40%
scheme/100% scheme. They can also invest in
the schemes of domestic Mutual Funds floated
by public/private sector institutions/companies
and bonds issued by public sector undertakings,
Non-resident investors are not required to
apply for permission to invest but the company
concerned will have to obtain permission from
Reserve Bank. |
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Q.
What is 24% Scheme?
Under the
24% scheme, Indian companies engaged or proposing
to engage in any activity including finance,
hire purchase, leasing, trading or other services,
establishment of schools/colleges. etc. (except
agricultural/plantation activities) are allowed
by Reserve Bank to issue shares/debentures
to NRIs with repatriation benefits to the
extent of 24% of the new issue. |
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Q.
What is 40% Scheme?
Under the
40% Scheme, Indian companies engaged or proposing
to engage in the following activities are
allowed by Reserve Bank to issue shares/debentures
to NRIs with repatriation benefits to the
extent of 40% of the new issue. |
- Industrial and Manufacturing units
- Hotels with 3, 4 or 5 star category
- Hospitals and diagnostic centres
- Shipping companies
- Development of computer software
- Oil exploration services
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Q.
Is remittance of interest/dividend to NRI investors
freely allowed under the 24% /40% Scheme?
Yes. There
is no ceiling or restriction on the amount
of remittable dividend. Remittance of interest/dividend
to NRI investors will be allowed by authorised
dealers under the posers delegated to them. |
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Q.
What are the specified industries under the 100% Scheme?
Under 100%
Scheme, NRIs are permitted to invest in high
priority industries listed in Annexure III
to the Statement on Industrial Policy dated
24th July 1991 of the Government of India
up to 100% of the new issue. |
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Q.
Is dividend/interest earned in respect of investment
made under the 100% Scheme freely remittable to the
NRIs abroad ?
Dividend/interest
can be remitted freely except in the case
of consumer goods industries where the outflow
on account of dividend is required to be balanced
by export earnings of the company either in
the year of declaration of dividend or in
the years prior to the declaration of dividend,
This requirement is enforced for a period
of seven years from the commencement of commercial
production. |
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Q.
How does an NRI obtain permission of Reserve Bank for
investment under the 24% or 40% or 100% Scheme?
The NRI
investor need not apply to Reserve Bank. Application
for necessary permission under the schemes
should be made by the Indian company/firm
to the Central Office of Reserve Bank in Mumbai
in form ISD/ISD(R). |
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Q.
Besides the 24%, 40% and 100% Schemes is there any other
scheme for investment by NRIs in the equity of Indian
companies?
Yes. NRIs
are permitted to undertake revival of sick
industrial units by making bulk investment
in them to the extent of 100 per cent either
by way of purchase of existing equity shares
or in the form of subscription to new equity
issues. |
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Q.
Is the capital brought into India for revival of a sick
Industrial unit allowed to be repatriated?
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Q.
How can an NRI obtain permission of Reserve Bank for
investment in a sick industrial unit ?
Application
for necessary permission should be made by
the Indian company to the Central Office of
Reserve Bank in Mumbai in form RSU. |
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Q.
Under the existing Industrial Policy, investment by
foreign collaborators upto 51% of the equity is allowed
by Reserve Bank on repatriation basis in certain high
priority industries. Can NRIs take up the balance 49%
equity in such cases on repatriation basis?
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Q.
Can NRIs make investments in companies engaged in real
estate development in India?
| Yes. Investment upto 100% in
the new issue of equity shares/convertible debentures
of Indian companies engaged in the followed
areas is allowed- |
- Development of serviced plots and construction
of built up residential premises
- Real estate covering construction of residential
and commercial premises including business
centres and offices
- Development of township
- City and region level urban infrastructure
facilities including roads and bridges
- Manufacture of building material
- Financing of housing development
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Q.
What is the procedure for obtaining Reserve Bank permission
in this regard ?
Applications
for the purpose should be made by the concerned
Indian company to the Central Office of Reserve
Bank in Mumbai in form ISD(R). |
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Q.
Will repatriation of the original investment and/or
dividend income be freely permitted?
Yes. Repatriation
of original investment will be permitted after
a lock-in period of three years from the date
of issue of the equity shares/convertible
debentures. In addition, OCBs will be permitted
to repatriate net profit (upto 16 per cent)
arising from the sale of such investment after
the lick-in period of three year. Annual dividend/interest
on equity shares/debentures can, however,
be freely remitted subject to payment of tax. |
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Q.
Are investments in Air Taxi operations permitted to
be made by NRIs ?
Yes. Investments
upto 100% equity participation for carrying
on Air Taxi operations are permitted in terms
of the guidelines issued by the Director General
of Civil Aviation for Air Taxi operations.
Applications for the purpose should be made
to Reserve Bank (Central Office) in form ISD(R)
by the concerned Indian company. |
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Q.
Are there any restrictions on repatriation of the investment
made under this scheme or income earned thereon?
No.
However, repatriation of the investment and
/or remittance of dividend will be permitted
only after the expiry of five years of operation
and only out of accumulated net foreign exchange
earnings. |
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Q.
Can NRIs invest in non-convertible debentures on repatriation
basis?
Yes.
Applications for necessary permission should
be made to Reserve Bank (Central Office) by
the concerned Indian company in form ISD. |
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Q.
What is the procedure to be followed for making investment
in the schemes of domestic Mutual Funds or public sector
bonds with repatriation benefits?
The concerned
Fund/Public Sector Undertaking should obtain
necessary permission from Reserve Bank for
issue of units/bonds to NRIs. Applications
for the purpose are required to be made to
the Central Office of Reserve Bank in form
ISD(R). |
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Q.
Can NRIs invest in 100% Export Oriented Units on repatriation
basis?
Yes. NRIs
will be permitted to invest up to 100% in
100% Export Oriented Units subject to obtaining
approval from the Government of India ,Ministry
of Industries (SIA) for setting up the EOU.
In the case of units located in Export Processing
Zones, approval from the Development Commissioner
of the concerned zone is required to be obtained.
Thereafter an application should be made to
the concerned regional office of Reserve Bank
in form ISD alongwith copy of Government approval
for necessary clearance under FERA 1973. |
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Q.
Can NRIs acquire shares disinvested by Government of
India in Public Sector Enterprises (PSEs) by inviting
sealed tenders?
Yes. Reserve
Bank has granted general permission to NRIs
to acquire shares of PSEs on their bids being
successful provided the holding of a single
NRI investor does not exceed one per cent
of the paid up capital of the PSE concerned
, the purchase consideration /bid money is
paid by way of remittance from abroad or by
debit to his NRE/FCNR accounts. |
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Q.
What is the procedure for issue of rights entitlement
to NRIs ?
The concerned
company should approach Reserve Bank for issue
of rights entitlement to NRIs in the prescribed
form if on repatriation basis. However, rights
entitlement on non-repatriation basis would
be covered by the general permission. |
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Q.
What is the procedure required to be followed by NRIs
for renunciation of rights entitlement ?
NRIs can
make an application to Reserve Bank by a letter
detailing therein the folio number of the
shares held and the manner in which the rights
are being sold. |
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Q.
What is the procedure for issue of bonus shares ?
The concerned
Indian company should approach Reserve Bank
for issue of bonus shares to NRIs if the original
investment is on repatriation basis. Issue
of bonus shares in respect of investment on
non-repatriation basis is covered by general
permission. |
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Q.
Can NRIs obtain loans abroad against the collateral
of share/debentures of Indian companies?
Yes. Authorised
dealer have been permitted to grant loans/overdrafts
abroad to NRIs through their overseas branches
and correspondents against collateral of the
shares/debentures of Indian companies held
by them, provided the concerned shares/debentures
were acquired on repatriation basis. |
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Q.
Can sale proceeds of the shares/debentures be remitted
abroad for liquidation of outstanding against such loans/overdrafts?
Yes,
subject to payment of Income tax, Capital
Gains tax etc. payable, if any. |
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Q.
What is the Portfolio Investment Scheme?
Under this
scheme, NRIs are permitted to acquire shares
/debentures of Indian companies or units of
domestic Mutual Funds through the stock exchange/s
in India. |
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Q.
What is the procedure for making applications?
The application
is to be submitted to Reserve Bank through
a designated branch of a bank in India in
one of the prescribed forms, i.e. NRC/NRI/RPC/RPI. |
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Q.
What is a designated branch?
Reserve
Bank has authorised a few branches of each
bank to conduct the business under Portfolio
Investment Scheme on behalf of NRIs . These
branches are the main branches of major commercial
banks located close to the stock exchange/s.
NRIs will have to route their applications
through any of the designated bank branches
who have authorisation from Reserve Bank. |
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Q.
Whether NRI can apply through more than one designated
branch ?
No. Each
NRI has to select one branch for this purpose
for investment on repatriation/ non-repatriation
basis. |
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Q.
Is it necessary to maintain a bank account with the
designated branch through whom the application is made
?
It is advisable
to maintain a bank account with the designated
branch for administrative convenience. |
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Q.
What is the validity period of Reserve Bank approval
for the purchase of shares/debentures of Indian companies
or units of domestic Mutual Funds?
Reserve
Bank approval is valid for a period of five
years from the date of issue. This can be
renewed further by making a request by means
of a simple letter. |
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Q.
Is there any ceiling on the investment under the Portfolio
Investment Scheme?
There is
an overall ceiling of 5% of paid- up equity
share capital of the company/paid-up value
of each series of convertible debentures for
purchase by NRIs /OCBs. The overall ceiling
can be raised to 30% if the company concerned
passes a special resolution to that effect
in its general body meeting and a board resolution.
Individually, NRIs/OCBs can make investment
upto 1% of the paid-up equity share capital/each
series of convertible debentures. However,
there is no ceiling on investment in domestic
Mutual Funds. |
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