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     NON RESIDENT INDIANS


Clairvoyant Capital Services is the perfect gateway to the world of investment opportunities in India for Non-Resident Indians. Our dedicated NRI desk in India is an ideal interface for Non-resident Indians (also read Foreign Nationals of Indian Origin) which combines the right mix of technology with human interactions to provide highly personalised solutions in the area of Wealth management.

Reasons for investing in India:

1. Economic Future is Bright:

India, as an investment destination, is going to go from strength to strength in the years to come. As per UBS report by 2030, the combined purchasing power of India’s and China’s consumers will be 5 times greater than the purchasing power of that of today’s United States. India is an economic superpower in the making as demographics and consumerism play out. With India likely to be the third largest economy by 2050, the long term trend for investments in India continue to be positive, although there may be blips from time to time.

2. Tax friendly Investments:

Investments in India are extremely tax-friendly.

  • Long term tax calculation is quite lenient in India. While long term capital gains are exempt from tax in the case of equities, in the case of real estate it is only 10% of the gains.
  •  Similarly, any money received from insurance company as well as interest on the NRE account is tax-free.
3. Diversification across currencies:

India provides NRIs an opportunity to diversify across currencies. Most Indians have their long term dreams like retirement attached to India. Therefore, investing in India not only allows them to have their goals aligned to the Indian currency but also allows them an opportunity to diversify across one more currency.

4. Other reasons:


Primarily for many NRIs, investing in India has an emotional angle. Sometimes, it is due to their familiarity with the investing instruments here or due to the need of some dependant here.


Where can NRIs invest in India?


In India, almost all avenues that are available to resident Indians are available to NRIs: all it requires is that they have a Permanent Account Number (PAN).

NRE/NRO accounts


NRIs can park their liquid money/fixed deposits in the Non Resident External or Non Resident Ordinary account. NRE accounts allow for repatribility while investments in the NRO accounts mean that the money cannot be taken out of the country.

Shares/Mutual Funds


NRIs can purchase shares and mutual funds under general exemption granted by the Reserve Bank of India. However, in the USA, the SEC prohibits anyone from investing in securities that have not been registered with it. Hence, many mutual funds (especially those with US origins/offices) do not allow investments from the USA NRE accounts. However, fund houses that do not have an office in the USA do allow investment in their mutual funds.

Insurance


NRIs can purchase insurance from Indian insurance companies. They can buy health and/or life insurance on self as well as on the lives of relatives/dependants. With ULIPs getting increasingly superior with better cost structures and rewarding long term investments with loyalty additions, they are a good investment option. The option to ride the equity or debt markets and also switching between debt and equity without any transaction cost and without any tax liability make ULIP an attractive investment option.

Real Estate 


Real estate is again the preferred investment vehicle for many NRIs. Real Estate is one investment vehicle that can deliver superior returns. Most of the times, the investment quantum is very high , hence due diligence is also critical. With the availability of leverage, the returns can be extremely good on their equity investment. However, one needs to take into consideration blips  that might arise like liquidity, timely completion and right titles. However, with the advent of real estate mutual funds, it should provide an easier and safer access to this asset class.

Investment Process in India


Getting  a PAN:


The most important document or registration required by NRIs is the Permanent Account Number (PAN). Getting a PAN is easy these days.

Start a Banking Relationship:


Since all the investing transaction require a banking channel (buying and selling, parking funds, etc), opening a bank account is imperative. One has to open  an NRE account to ensure repatriability of the funds invested in India. Banks allow NRIs to nominate a local representative who has the “mandate” to operate the banking account on their behalf.

Appoint a Power of Attorney holder if required:


Investing in illiquid assets like real estate might require the NRI to appoint someone in India as his local representative. The NRI needs to give a “power of attorney” to the local representative detailing the powers that the representative can exercise on behalf of the NRI. If the NRI does not want the hassle of writing cheques to his insurance company or to his mutual fund company, he can give his local representative the right to sign, invest and redeem on his behalf.

Identifying a financial advisor:


This leg of the investment process is very critical. One needs to find someone who can win his trust. He needs to look at the ability of the advisor to service him: the client should not be too large or too small for the advisor. Knowledge of the advisor in terms of international legal and taxation issues as well as laws applicable in India is very important.

Asset allocation and regular review:


The financial planner should be able to provide a long term financial plan for the investment of his assets. Based on the clients’ age and risk appetite, one should be able to provide a proper asset allocation and the same needs to be reviewed as changes occur in the age and risk preferences of the client.
What Clairvoyant Capital Services offers to NRIs?

Getting a PAN & setting up the banking account:

Clairvoyant Capital Services can assist you in procuring the PAN if you do not already have it. We can help you in setting up the NRE accounts.