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<p>Indians that reside and earn in a foreign country are known as Non-Resident Indians (NRIs). Both Non-resident Indians and resident Indians are allowed to trade in India. However, all the transactions made by the NRIs are regulated by Foreign Exchange Management Act (FEMA). NRIs that invest and trade in India are required to comply with the rules and regulations of FEMA.</p>

<h2>How can I open an NRI demat account?</h2><p>The procedure to open a demat account in India for NRIs is quite simple and similar to that of a resident opening a demat account in India. The only difference is the additional documents and approval that are required for a NRI to open a demat account.&nbsp;</p>

<p>It must be noted that you can open a NRI demat account only after you have lived outside of the country for 182 days or more. Additionally, you are allowed to hold only 5% of your paid up capital in the NRI demat account. Having a NRO or NRE bank account is mandatory before opening the NRI demat account.</p>

<p>The procedure begins with choosing a depository participant (DP) registered with either NSDL or CDSL. Apart from the general documents of identity proof and address proof, you are required to complete the KYC process by submitting your passport, visa (employment visa or work permit), pan card, account-opening form and a cancelled cheque.&nbsp;</p>

<p>The most important document is a letter that will be issued by the Reserve Bank of India (RBI) which will be in the form of an investment portfolio letter and it notifies you of the clearance of the opening of your NRI account.</p>

<h3>What is an NRO and NRE account?</h3><p>NRIs are required to open either NRO bank account or NRE bank account. Based on the type of bank account you have, you will be assigned the demat account. If you have NRO bank account then you will be assigned NRO demat account and similarly for NRE. The question that must pop in your mind is, ‘how are the two different?’</p>

<p>When funds can be transferred abroad they are known as repatriable funds and are deposited in a bank account which is known as Non - Resident External Account (NRE account). Investments made from these funds are carried out through and maintained by the ‘Repatriable Demat Account’.&nbsp;</p>

<p>On the other hand, the funds that cannot be transferred or taken abroad are deposited in a Non-Resident Ordinary Account (NRO account) and are known as non-repatriable funds. The ‘Non - Repatriable Demat Account’ overlooks all the transactions made through these funds and maintains them.</p>

<h3>What is PINS?</h3><p>As soon as your bank account, either NRE or NRO is in place, you are required to to get the Portfolio Investment Scheme (PINS) approval from RBI if you wish to buy and sell equities through Indian Stock Exchange. On the other hand, a non-PINS account will allow you to only make investments in IPOs and mutual funds as residents.</p><p>The PINS approval letter issued by RBI will allow you to open both trading and demat accounts as a NRI. Once your PINS letter is obtained by the bank with which you have your account, you can open both a trading and demat account, following this you are enabled to trade in Indian equities.</p><p>Note that only designated branches of banks and dealers are authorised to open the PINS account.</p><h3>What are the documents needed for a demat cum trading account?</h3><p>You are required to submit the following documents in order to process your demat cum trading account as a NRI.</p><ul><li>Copy of PAN card</li><li>PINS letter issued by RBI</li><li>FEMA declaration</li><li>Copy of Indian and foreign (if any) passport</li><li>Person of Indian Origin card</li><li>Overseas Citizenship of India card</li><li>Overseas address proof</li><li>Cancelled cheque of the bank account held overseas</li><li>Mention the bank account that will be mapped for the trading and demat account</li><li>Sign the Foreign Account Tax Compliance Act (FATCA) declaration.</li></ul><h3>How to invest in Indian equities?</h3><p>There are three ways through which you can invest in Indian equities if you're a NRI.</p><ol><li>You can appoint a mandate holder to look after and handle your NRE/NRO account in India. For this you are required to submit an “Appointment of Mandate Holder” application to the concerned bank with the documents and specimen signature of the appointed mandate holder.</li><li>You can appoint a Power of Attorney (POA) who can execute investments on your behalf. The POA agreement is signed on a stamp paper and notarized. It is then submitted as a mandate for the purpose of investment.</li><li>Online trading from your country of residence is the most popular option, most of the brokers offer this facility to NRIs after the completion of KYC procedure and the required compliances are fulfilled.</li></ol>

<h3>What is the trading process for NRIs in India?</h3><p>The process is more or less similar to that of residents of India. However there are certain things that should be noted. There are certain stocks wherein the NRIs cannot invest or trade, make sure you check on this negative list to avoid penalties.&nbsp;</p><p>Once you allocate the funds from your NRE or NRO bank account to the broker, the trading account will be credited. When the actual transaction will take place, the broker sends the contract note to both, the NRI and the PINS bank in order to authorise debits. The PINS bank will credit or debit the PINS account for the NRI accordingly.</p><p><strong>Things to note if you are a NRI investor in India</strong></p><ol><li>The taxation policy for the long term and short term equity gains is same for NRIs and residents of India. However, if you are a NRI investing in mutual funds, you will receive the dividend only after TDS deduction.</li><li>Trading in equities can take place through both NRE and NRO bank accounts. However, if you wish to trade Futures and Options (F&amp;O), you can do that only through NRO account. Additionally, the Custodian Participant (CP) code is a must for NRIs before they trade in F&amp;O.</li><li>NRIs can trade only on delivery basis in India, therefore, short selling is not open for NRIs</li><li>As of now, NRIs are barred from trading in commodities and currency derivatives.</li></ol><p>Opening a demat account for NRIs is quite easy and similar to that of the residents. However, since they reside overseas they are required to submit extra documents including their work permit. If you are a NRI, you first need to open either a NRE bank account or a NRO bank account in India in order to trade in the Indian Stock Exchange.&nbsp;</p><p>Technology has made trading easier across the globe, hence, NRIs make the most of this opportunity and trade as per FEMA (Foreign Exchange Management Act) regulations in India.</p><p>&nbsp;</p>

How to open an NRI Demat account in India?

NRIs can also open a demat account just like other residents. They are, however, required to undergo a more regulated framework. Let us understand more about this

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