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Who is a Non-Resident Indian (NRI)?
"Non Resident Indian" means a person who is a citizen of India or is a person of
Indian origin residing outside India for more than 90 days for employment or carrying
on business or vocation.
Who is an Overseas Corporate Body (OCB)?
Overseas Corporate Body (OCB) means a company, partnership firm, society and other
corporate body owned directly or indirectly to the extent of at least 60% by NRIs
and includes overseas trust in which not less than 60% beneficial interest is held
by NRIs directly or indirectly but irrevocably.
What is Participatory Notes (PN) ?
Participatory notes(PN) is issued by FII-Foreign Institution Investment and or its
sub accounts. This is the route by which foreign national and or company can invest
in Indian Stocks.
What is an NRE A/C?
A NRE bank account is an external saving bank account opened for Non resident Indians.
This is why it is known as Non-Resident External account. Since it is an external
account, any monies lying in NRE account can be taken outside the country or in
other words, the monies lying in NRE account are fully repatriable. This money can
be converted into any foreign currency at the behest of the account holder and can
be remitted outside the country.
What is Non Repatriable?
Non Repatriable : Any amount of profit/ money made by NRI of his investment which
is not allowed to be converted into foreign currency or allowed to be taken abroad
is called Non Repatriable.
What is Repatriable?
Repatriable: Any amount of profit or money which an NRI or PIO is allowed to convert
into foreign currency and take out of India is called Repatriable.
What is PIS?
Portfolio Investment Scheme (PIS) is a scheme of the Reserve Bank of India (RBI)
defined in Schedule 3 of Foreign Exchange Management Act 2000 under which the ‘Non
Resident Indians (NRIs)’ and ‘Person of Indian Origin (PIOs)’ can purchase and sell
shares and convertible debentures of Indian Companies on a recognized stock exchange
in India by routing all such purchase/sale transactions through their account held
with a Designated Bank Branch.
Any NRI wanting to trade/make fresh investments in the Indian Equity Secondary Market
needs and must have one PIS account with only one designated bank in India. Notes:
Why is PIS required?
- PIS account is applicable only for NRIs and not for resident Indians.
- It is only for trading in Indian markets and not any other foreign markets.
- It is applicable only for equity trades and not MF investments.
For all the Indian companies or companies listed on Indian stock exchanges, there
are certain limits which have to be monitored under FEMA-Foreign Exchange Management
Act regulations. For any company the foreign investment into that company cannot
cross certain limit. This limit is different from company to company and sector
to sector. Also individually any NRI or a PIO cannot invest more than 5% in any
Do NRIs need any permission of RBI to subscribe for IPO’s or
Private placements of equity shares/convertible debentures of existing or new companies?
No. NRIs do not require any permission to invest though Initial Public Offerings
(IPO’s) or Private placements. In such cases, the Issuing Company should comply
with all necessary regulations for issuing securities to a person resident outside India.
What are the documents required to open NRI & PIS account?
Identity Proof : Copy of Passport, 8 Photographs
Proof of residence : Any one 1) Bank Statement 2) Telephone Bill 3) Utility
Proof of NRI/PIO : Copy of Valid Visa
All documents should be self attested.
How an NRI can get the Income Tax PAN in India?
Fill in the Form 49 of Income tax department and submit along with self attested
documents as stated above. You can get the PAN at the address in India even if you
have given the proof of address of abroad. PAN is compulsory requirement for dealing
on the Stock Exchanges.