Yes, an Overseas Citizen of India (OCI) can invest in Indian stock market. Let’s know ways how an OCI can start investing in Indian stocks from another country.
OCI India
OCI is an abbreviation for Overseas Citizens of India. A person is eligible to become an OCI of India
- If a person was born in India and is under the definition of the Government of India Act 1935.
- If he or she was born in India and is under the definition of the Government of India Act 1935.
- A person who was residing outside India and had the eligibility to be an Indian citizen on 26/01/1950.
A spouse of an OCI can become an OCI online if he/she passes the eligibility in his/her own capacity. An OCI gets a card issued by the Ministry of External Affairs. Let us explore if an OCI can also invest in Indian stock markets like a citizen or a Non-resident does.
Can OCI invest in the Indian stock market?
- An OCI has access to the Indian stock markets. For them to invest in the markets, they need to follow the steps listed below:
- Open a bank account of your choice. It can be a Non-resident external account (NRE) or a Non-resident ordinary account (NRO) or a Foreign Currency Non-resident account (FCNR).
- Remit funds in any of the above-mentioned bank accounts.
- Lodge Foreign Inward Remittance Certificate (FICR), to prove that the money deposited in clean and to pass the anti-money laundering rules is cleared.
- Choose a service provider/ trading platform.
- Open a demilitarized account.
- Open a trading account and link it with the demat account and your bank account.
- Clear Know Your Customer (KYC) rules set out by your preferred service provider. You might have to submit documents such as your foreign passport, proof of residence in foreign currency, address in your residing country etc.,
- Once done, you can start owning, investing and trading the financial instruments listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
An OCI investing in the Indian stock market
As an overseas citizen of India, you cannot directly invest in shares, rather you have to go via a stock broker. You can also invest via a proxy. A proxy is a person – a friend or a blood related family member who acts on your behalf.
You need to give the power of attorney to this proxy and have this person authorized through a public notary. Once done, this person can invest in the Indian stock markets on your behalf.