NRIs can use Non-repatriable Demat accounts to invest in Indian stocks, ensuring investments remain within India. Though, the funds cannot be transferred back to their home country.
According to the Securities and Exchange Board of India (SEBI), all share-related transactions are to be mandatorily done via Demat accounts. If you are a Non-Resident Indian (NRI) investor, then you can choose between a repatriable or a non-repatriable account. The major difference between the two is the transferability of assets overseas.
Non-repatriable Demat accounts do not allow transfer of assets/funds overseas but come with their own set of features. Read on to learn more about this type of Demat account in the following sections.
A non-repatriable Demat account is a type of Dematerialized (Demat) account specifically designed for Non-Resident Indians (NRIs) who wish to invest in the Indian stock market and other eligible securities.
The key feature of a non-repatriable Demat account is that it does not allow the repatriation of funds, meaning the funds invested and the profits earned in this account cannot be transferred or repatriated to the NRI's foreign bank account. Instead, the funds and earnings must remain within India.
FAQs on Non-Repatriable Demat Account
What is the difference between a non-repatriable and a repatriable Demat account?
The primary difference between the two types of Demat accounts is the ability to transfer funds abroad. While repatriable Demat accounts allow transferring funds overseas, non-repatriable ones do not permit this, with the exception of dividends and interest earnings.
Can NRIs sell the assets from their Demat accounts in their home country?
In order to offload their securities in their home country, NRIs can either convert their resident Demat account into an NRO one or keep them stored in their resident accounts. Alternatively, they can send them to relatives in India and close the resident account.
What documents do I need to open a non-repatriable Demat account?
Documents such as your PAN card, passport-sized photograph, identity proof, foreign address proof, income proof, PIO/OCI card, and more will be required to open this Demat account.
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