U.S. Market Investment Basics
Indian investors are increasingly exploring offshore equities like FANG stocks. Understanding Banking, Investment restrictions, and Taxes (BITs)—under RBI’s LRS, permissible instruments, and global tax obligations—is essential for compliant, profitable investing abroad.
As investors chase the returns and benefits from the offshore investment, it is important to understand applicable banking, investment restrictions and taxes on such investments. Indian investors have lately shown increased interest in offshore equities and FANG stocks. Facebook, Amazon, Netflix and Google are some of the prominent choices. Portfolio diversification, opportunities in offshore markets and the global footprint of FANG like stocks are drivers for wealth-owners to create an overseas portfolio. Technology and digitalisation have also enabled greater convenience of investment in overseas financial stocks and products.
As investors chase the returns and benefits from the offshore investment, it is important to understand applicable BITs i.e., Banking, Investment restrictions and Taxes on such investments.
Banking: Regulations permit an individual resident investor to make portfolio investments within the overall annual limit of USD 2,50,000 under the liberalised remittance scheme. The investor is only required to submit FORM A2 while remitting funds. The income earned can be retained outside for reinvestment and there is no mandatory requirement to repatriate it back to India.
Investment: Portfolio investment can be made in shares and debt instruments including mutual funds and venture capital funds. Investments in companies engaged in real estate, banking and financial…
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