A checklist for Investing in Mutual Funds as an NRI

A to-do list on how to manage your Mutual Fund investments when your residential status changes from Resident to Non-Resident or if you are already an NRI.

 

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1. Bank Account

    • Convert your existing Resident Savings Accounts to NRO (Non-Resident Ordinary A/C). This type of bank account allows for receiving funds in both Indian and Foreign Currency. This is where you can maintain and manage your income earned in India such as rent, dividends, pension etc.

 

    • Set-up an NRE Account and use that to invest funds generated from your Overseas income: This type of bank account allows for receiving funds only in Foreign Currency. Except for Indian Currency received from specified sources such as proceeds from Mutual Fund redemptions.

 

 

2. KYC: Update your KYC status from Resident individual to Non Resident (NRI)

 

    • You can get this done by asking your previous intermediary to update your KYC status in the centralized KYC database, OR
    • Visit the nearest CAMs/Karvy office when you are in India. Submit the documentation in person.
    • KYC Update Documentation is simple and usually includes a Proof of Overseas Address and a copy of your Passport

 

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3. Update your Non-Resident(NRI) status in all your existing Mutual Fund folio(s)

 

    • All your existing investments should be tagged to your NRO account and your residential status should be updated in all your Mutual Fund Folio(s),
    • AMC(s) do not accept this update request electronically. The fastest option: visit the nearest CAMs/Karvy office when you are in India and submit the documentation in person. An account statement(NRO) copy and a refresh of your KYC information is adequate and within a few days.

 

4. Further investments as an NRI

 

    • Use the NRO account and your updated Folio(s) mapped to your NRO account for:
      • Managing your existing investments
      • Further Mutual Fund purchases made using funds generated from any continuing income in India.
    • Use the NRE account and create new Folio(s) for Mutual Fund purchases made using funds generated from any continuing income in India.
    • DO NOT: Invest in an Folio linked to your NRE account using your NRO account and vice versa as this inconsistency may lead to order rejection(s) by AMCs, redemption issues and even laborious/delayed refund(s) in case of an order rejection.

 

The above is only an indicative outline of managing your investments for when you become a Non-Resident. Please don’t treat this as legal and tax advice. Do consider consulting a tax expert to get expert advice most suited to your specific circumstances. Further, some of the content in this note links to external websites.

 

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If you are KYC compliant and have an active Non-Resident Bank account, you can get started today on Kuvera.in. Just create your login and go from there.

 

Blog last updated on 25.03.2023

 

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