Last few days left! Options to invest abroad by availing RBI LRS scheme this FY

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March 22, 2021 10:50 AM

After opening an international trading account, the brokerage firm helps you to meet LRS formalities, complete KYC requirements before you can buy top US stocks from India.

buy top US stocks from India, international trading account, the brokerage firm, RBI LRS, send money abroadThe foreign exchange rule come under the RBI's Liberalized Remittance Scheme (LRS) and has a cut-off date as far as maximum remittance is concerned.

Whether you want to send money abroad for the purpose of investing in stocks, buying a home or meeting children’s education needs, there are rules and regulations set by the RBI to be followed by Indian individuals. You will, after all, have to buy US dollars using your Indian currency INR and there are limits and conditions to adhere to before you can do so. The foreign exchange rules come under the RBI’s Liberalized Remittance Scheme (LRS) and have a cut-off date as far as maximum remittance is concerned. Currently, under the LRS rules, any resident individual including a minor ( countersigned by a guardian) is allowed to remit up to 2.5 lakh US dollars (USD 2,50,000 ) in each financial year. So, if you want to avail the limit of the RBI LRS scheme for this FY, make sure you remit by March 31, 2021.

Regardless of whether you are thinking to invest abroad, going on a foreign get-away, sending your kids for education abroad, the RBI’s LRS will be the one-single stop for all your forex needs. As the name suggests, LRS is about remittances and also includes forex facilities to meet any medical expenses while travelling abroad.

And, if you have investments on your mind, there are a plethora of options available in the US stock markets. After converting your INR to dollars, you can bring in diversification to your portfolio of stocks by adding global companies to it. The route is simple and easy and it starts with opening an international trading account sitting here in India. The brokerage firm helps you to meet LRS formalities, complete KYC requirements, and in transferring of funds from your Indian bank to the newly opened foreign bank account. Once done, you are good to go and buy top US stocks from India.

At an exchange rate of Rs 73 to a dollar, the LRS limit to an individual stands at about Rs 1,85,00,000 or Rs 1.85 crore. And after investing abroad in shares and mutual fund schemes, the LRS rules allows the investor ( unless it is an overseas direct investment ) to retain and reinvest the income earned in that country. It is not necessary for the investor to repatriate the accrued interest or dividends on the deposits and investments made abroad.

So, what are the options available to an Indian investor in the American economy? With the aim of diversification, Indian investors can build a global portfolio comprising of individual stocks such as Apple, Tesla to different ETFs and IPOs. The FAANG stocks representing Facebook, Apple, Amazon, Netflix and Google remains the global investors long term winner stocks.

Other than the large-cap stocks, there are mid and small-cap US stocks that can be a part of your portfolio. You can also explore other top US stocks that are a part of the S&P 500, Nasdaq 100, Dow 30 indices or the Russell 2000 Index. From technology to pharmaceutical companies and from large-cap to small-cap stocks, the US stock market has a wide spectrum of top global companies.

For starters, the ETFs listed on US stock exchanges can be a good starting point. ETF’s are low-cost investments and allow one to take exposure in several stocks of the same index at one time.

The SPDR S&P 500 ETF also known as SPY ETF is one such ETF that tracks the S&P 500 index – an index of a diversified group of large-cap U.S. companies across eleven major industries. The Invesco QQQ Trust (QQQ ) is another ETF that gives you access to Nasdaq’s 100 companies in a single investment.

Buying US stocks from India should be to diversify your domestic portfolio. There are global companies listed on US stock exchanges thus giving you global exposure to investing. Any fall in the share prices of established companies may be used as an opportunity to accumulate them for the long term. Build a core portfolio of some of the top US stocks and reap the benefit of equity investing in the world’s largest economy over the long term.

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