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The lack of awareness on how to benefit from a stronger home currency (than INR), as well as the effortless repatriation of maturity products is also putting investors on the back foot today, even though they were the strongest IRR investments sitting with the world’s largest financial institutions.
With a changed world of tech banking, secure payments, and flexible national regulations, investment shopping in India is miraculously smooth, all online with just a few clicks. Adding support to the existing coronavirus era, an investor’s online journey ends in a zippy with digital documentation including FATCA (Foreign Account Tax Compliance Act), KYC / video-based verification, and more. For each investment, the currency of the country of origin is best used (set higher at the INR) by making payments to the account of the recipient financial organization, either via the following mode: (1) bank account from the home country using a SWIFT bank transfer or (s) direct transfer via an NRE (external non-resident) bank account (NEFT). In both cases, one obtains distinct business advantages that even a resident Indian.
Continuing to use own NRO (Non Resident Ordinary) or Indian resident bank account for investments, seriously kills ROIs in currency conversions, uncalled taxes and ends up with money stuck in India.
Financial working methods have improved considerably over the years. As we speak, most of the global brands of India-based life insurers offer products such as: ULIPS (Unit Linked Insurance Plans), Life Insurance Coverages (Term Life) and a guaranteed return (income and lump sum) via these payment methods, with agility.
According to the RBI (Reserve
), Reference Notification No. FEMA 14 (R) / 2016-RB, it is stated that premium amounts received from outside India through the appropriate banking channels are valid and treated as’ freely convertible currencies “. A subsequent benefit by the Life Insurance Board of India in June 2019, at the top, grants a GST (Goods and Services Tax) exemption of up to 18% annually for all remittances to India, carried out via said modes.
In fact, the cost of acquiring an investment by an investor of Indian origin becomes much lower than that of a resident Indian who ends up paying the full tax levied by the government on all purchases. With the revised guidelines, investors could maximize the diversification of their investment portfolio.
How do you do it?
- Contact your advisor to discuss your financial needs and goals.
- Choose the product (s) in line with your objectives (debt or equity).
- Complete all documentation and processing digitally.
- Pay through your NRE (NEFT) or local home country bank (SWIFT) directly to insurers.
If your investment is covered by life insurance, it may require a medical examination,
primarily conducted in your current country of residence.
There is a historic change to increase your positive investing experience, in which now one can invest in any debt or equity product even without having an Indian PAN (permanent account number). Instead, the OCI card could be provided. There is a significant portion of the world’s population of Indian descent, completing India’s growth story simply due to the unavailability of a PAN. In the coming months, expect more and more investors to pour money into India digitally, capitalizing on the latest changes and getting rich for a comfortable life abroad.