Thinking Of investing in India? NRI's who want to invest in India will now need to adhere to various guidelines applicable to them for trading as issued by the Reserve bank of India and Securities and Exchange Board of India.
NRIs should always check RBI notifications for scrips in which further investment is disallowed. Each NRI is permitted to invest up to five percent of the paid up capital of the company. There is an overall ceiling of 10 percent of paid-up equity share capital of the company/paid-up value of each series of convertible debentures for purchase by NRIs. The overall ceiling can be raised to 30 percent if the company concerned passes a special resolution to that effect in its general body meeting and a board resolution.
In case orders are placed in such scrips which are under the Restrict List / Watch List of RBI, the investor may be required to place a square off order. Loss on such square will be debited to his account whereas profit on such square off will not be credited. As per RBI guidelines, NRIs are not permitted to square-off trades during same settlement period. In case he transacts a square up, any loss incurred will be borne by him. However, profits will not be credited to his account. Hence, NRIs should always place hold on funds while placing a buy order and at the time of selling shares.
The following persons qualify in the category of Non Resident Indians:
Non-resident Indian (NRI) means a person who is a citizen of India or is a person of Indian origin, residing outside India. The term resident outside India is defined by Section 2(w) of Foreign Exchange Management Act 1999 and means a person who is not resident in India.
According to Section 2(v) of the Foreign Exchange Management Act 1999, ‘person resident in India’ means a person residing in India for more than 182 days during the course of the preceding financing year but does not include:
A person who has gone out of India or who stays outside India :
1) For or on taking up employment outside India
2) For carrying on outside India a business or vocation
3) For any purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period .
Or
A person who has come to or stays in India, in either case, other than:
1) For or on taking up employment in India
2) For carrying on in India a business or vocation
3) For any other purpose in such circumstances as would indicate his intention to stay in India for an uncertain period
Or
A foreign citizen (other than a citizen of Pakistan or Bangladesh) is deemed to be of Indian origin if:
1) He, at any time, held an Indian passport
2) He, either of his parents, or any of his grandparents was a citizen of India by virtue of the Constitution of India or Citizenship Act, 1955
NRIs should always check RBI notifications for scrips in which further investment is disallowed. Each NRI is permitted to invest up to five percent of the paid up capital of the company. There is an overall ceiling of 10 percent of paid-up equity share capital of the company/paid-up value of each series of convertible debentures for purchase by NRIs. The overall ceiling can be raised to 30 percent if the company concerned passes a special resolution to that effect in its general body meeting and a board resolution.
In case orders are placed in such scrips which are under the Restrict List / Watch List of RBI, the investor may be required to place a square off order. Loss on such square will be debited to his account whereas profit on such square off will not be credited. As per RBI guidelines, NRIs are not permitted to square-off trades during same settlement period. In case he transacts a square up, any loss incurred will be borne by him. However, profits will not be credited to his account. Hence, NRIs should always place hold on funds while placing a buy order and at the time of selling shares.
The following persons qualify in the category of Non Resident Indians:
Non-resident Indian (NRI) means a person who is a citizen of India or is a person of Indian origin, residing outside India. The term resident outside India is defined by Section 2(w) of Foreign Exchange Management Act 1999 and means a person who is not resident in India.
According to Section 2(v) of the Foreign Exchange Management Act 1999, ‘person resident in India’ means a person residing in India for more than 182 days during the course of the preceding financing year but does not include:
A person who has gone out of India or who stays outside India :
1) For or on taking up employment outside India
2) For carrying on outside India a business or vocation
3) For any purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period .
Or
A person who has come to or stays in India, in either case, other than:
1) For or on taking up employment in India
2) For carrying on in India a business or vocation
3) For any other purpose in such circumstances as would indicate his intention to stay in India for an uncertain period
Or
A foreign citizen (other than a citizen of Pakistan or Bangladesh) is deemed to be of Indian origin if:
1) He, at any time, held an Indian passport
2) He, either of his parents, or any of his grandparents was a citizen of India by virtue of the Constitution of India or Citizenship Act, 1955
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