Thinking of a better way to invest? Here’s how to invest in US stocks from India.
You could be a US returnee like me or an avid investor from India. Investing in US stocks is lucrative. The dividends and profits are literally better and bigger.
Thanks to the new Fintech market, you can now start investing in US stocks and buy Amazon, Tesla, Google-like US stocks from India.
In this article, we’ll help answer questions like below.
- Who can invest in US stocks from India?
- How to buy US stocks from India?
- How to invest in international stock markets from India?
So let’s see how this is done.
First, let’s see who is eligible to invest in US stocks from India.
Who can invest in US stocks from India?
Anyone in India, with proper ID proof (Aadhaar/Passport, etc) and a PAN card can invest in the US stock market.
Is investing in US stocks from India legal?
Yes, completely legal. Under the Liberalised Remittance Scheme (LRS), the Reserve Bank of India (RBI) allows an Indian resident to invest up to USD $250,000 per year in overseas stock markets.
How can I start investing in US stocks from India?
If you have a valid PAN card, and address proof, you can start investing in US stocks, from India using any of the following mentioned apps.
- Zerodha (Coming up)
How much money can I invest in US stocks from India?
Under the Liberalised Remittance Scheme (LRS), the Reserve Bank of India (RBI) allows an Indian resident to invest up to USD $250,000 per year in overseas stock markets.
Also read: How to start investing in Mutual Funds
Can NRIs invest in US stocks?
Yes. Any non-US resident NRIs can invest in US stocks if you have proper KYC documents like ID proof and tax documents from the country of your residence.
Where would you have to pay taxes?
There are two types of taxation.
1. Taxes on investment gains: You will be taxed in India for this gain. The tax amount you have to pay in India depends on how long you hold the investment. 24 months is the long-term capital gain threshold and the tax rate is 20% with indexation benefit. Below 24 months is short-term capital gain and is taxed according to your income tax slab.
2. Taxes on dividends: Unlike investment gains, dividends will be taxed in the US at a flat rate of 25%.
Can you invest in US stocks through Indian banks?
Yes. For example, ICICI bank has a tie-up with US bank Saxo and through their trading platform, Indian residents can invest in non-Indian stocks. It’s not a very popular method though, possibly inefficient with high rates. Details below.
There is an account opening fee of Rs.1500.
Brokerage for NASDAQ/NYSE – $.02/per share or $15 whichever is minimum. The minimum transaction value has to be $50.
Related: Best Mutual Funds Apps in India
The easy way to invest in US stocks from India
If you don’t want to invest in another third-party app and still want to invest in US stocks, you can do so through mutual funds. If you’re an Indian resident and already have invested in mutual funds, then buying those stocks that have US stocks is a good idea. Some of the popular American equity mutual funds are (as of 2020 April),
- ICICI Prudential US Bluechip
- Parag Parikh Long Term Equity Fund
- Reliance US Equity Opportunities Fund and the like.
If you have any additional points to add, please share in the comments. Thanks!
All the best!