NRI Corner: Important Things For NRIs Before Investing
It’s almost over a month, that we had started our series of blogs for NRIs. And by now, we have covered all the aspects with regards to different forms of investments and ways to start investing in India. But hello!!, there’s some thing more left, and of much importance as well.
Before investing in Indian share market every NRI needs to know certain important facts, actually these are restrictions which are imposed with an intention to protect the Indian market from illegal money used in the stock market.
Here I would like to share few MOST important things that you should know.
1) NRIs are not allowed intra-day trading. All trade has to be done on delivery basis. Short Selling is also not permitted.
2) NRIs are not permitted to trade in Currency derivative segment of the Exchange.
3) NRIs can invest in futures & options segment of the exchange out of Rupee funds held in India on non repatriation basis.
4) An NRI cannot buy more than 5 per cent of the paid capital of the company.
5) Also, the aggregate paid-up value of shares purchased by all NRIs cannot exceed 10 per cent of the paid-up capital of the company. This aggregate ceiling can be raised to 24 per cent if the General Body of the concerned company passes a special resolution.
6) An NRI can give power of attorney to Indian resident for trading on behalf of an NRI. Because, one of the biggest problem for NRI in trading in Indian market is Time. Time difference will always be there. That’s why to avoid the problem, you can provide power of attorney, but, power of attorney can not remit the money outside India.