What are the Limits for NRI Investment in Shares in India?

Investment

oi-Sunil

By Sunil Fernandes

Published: Saturday, November 15, 2014, 12:02 [IST]

Non Resident Indians are not allowed to buy shares of any quantity and size in an Indian company. In fact, there are certain limits by which they have to adhere.

NRIs are allowed to invest through authorized dealers only up to a limit of 5 per cent of the paid-up capital on a repatriation or non-repatriation basis. This is also the limit for investment through the Portfolio Investment Scheme.

It's also important to remember that NRIs cannot invest more than 10 per cent of the paid up capital of a company altogether. This means the total investment by NRIs put together should not aggregate more than 10 per cent.

If a company so desires, it can change the aggregate limit for NRI investment in the company to 24 per cent at the annual general body meeting.

NRI's must before purchase of shares be aware if the securities are in the banned list. If the shares are in such banned list NRIs cannot make purchases. Brokers should also ensure that clear funds are available in the account before an NRI decides to make purchases of shares.

Can NRIs open 2 separate accounts through NRE & NRO for buying shares?

Non Resident Indians normally have a trading account through PIS. They can now invest through the PIS from the NRO and the NRO Account.

An NRI can also gift a resident individual shares/securities/convertible debentures etc., to NRI close relative up to USD 50,000 per financial year subject to certain conditions.

GoodReturns.in