Buying international stocks from India is easier than you think. Here’s how to invest in international stocks from India:
India has seen a surge in investors’ interest in international stocks in the US in the past few years. With the percolation of seamless digital platforms, Indian investors are actively trading and investing in international stocks from India based on their financial goals and thematic interests.
Investing in international stocks has a few advantages, like building a diversified portfolio and eliminating region-specific shocks. The US stock market is increasingly becoming a preferred avenue for Indian investors due to stellar returns in the last 10 years.
Ways in which you can invest in international stocks from India
Buying international stocks from India is easier than you think. You can directly invest in foreign equities by opening a brokerage account with a platform like Globalise. With access to a brokerage account, you can directly invest in any stocks listed on the US stock exchanges.
There are also indirect methods to build exposure to international stocks. Indian investors can use exchange-traded funds (ETFs) or curated portfolios offered available with their US brokerage account to build a portfolio of international equities. Alternatively, investors can invest in Indian mutual funds that have exposure to global stocks.
Opening an account for direct international investing
● Create an account on the website/app using your email ID
● Verify the ID using an OTP
● Globalise offers both free as well as premium plans that you can use. More information here
● Complete your KYC by entering your personal information and uploading your KYC documents. You can find the list of required documents here
● Your account gets verified in 24 hours and you can begin your investment journey once you add funds to your account
Funding your account to buy international stocks
You can begin the process of transferring money into your account under the Transfer Money tab. Complete the form as specified, and you will be issued a pre-filled LRS form that can be downloaded or emailed to you. We provide detailed instructions to fund your account according to the bank you hold an account with. Your bank in India initiates the transfer process to fund your US brokerage account.
Things to remember before going global
● Under the LRS scheme of the Reserve Bank of India (RBI), the maximum amount an Indian resident can invest in overseas securities is limited to $250,000 in a financial year
● Bank exchange rates: Ask your brokerage firm if they have a tie-up with a bank and could help you secure a lower exchange rate. For instance, Globalise has tie-ups with Axis Bank, IndusInd Bank, and Kotak Mahindra Bank, offering a reduced cost of remittance with each.
● When you buy international stocks from India, the taxes that apply are as follows:
Tax on capital gains
Taxes on capital gains will not be deducted in the US. However, your capital gains will be taxed in India. The tax liability depends on how long you hold the investment. If you hold an investment for longer than 24 months, it qualifies as long-term capital gain and is taxed at 20% with indexation benefit. If you sell a stock within 24 months, it is considered a short-term capital gain and is taxed as per your income tax slab.
Tax on dividends
Dividends earned on US investments will be liable to a TDS (tax deducted at source) in the US at a flat rate of 25%. The US and India have a Double Taxation Avoidance Agreement (DTAA) that allows Indian taxpayers to adjust income tax already paid in the US. The tax already paid in the US is available as Foreign Tax Credit to Indian taxpayers, which can be used to offset the income tax payable in India.
Conclusion
Investing internationally from India is an attractive proposition, and there are several avenues available to do so. It is important that you are aware of the options available and the details surrounding each. Globalise provides customers with the guidance required when investing internationally and aims to simplify your decisions when going global with your investments.
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