NRI: Tips for Investing in India

• NRI's who want to invest in India will now need to adhere to various guidelines applicable to them for trading as issued by the Reserve bank of India and Securities and Exchange Board of India.

• NRIs should always check RBI notifications for scrips in which further investment is disallowed.
  

• Each NRI is permitted to invest up to five percent of the paid up capital of the company.
  

• There is an overall ceiling of 10 percent of paid-up equity share capital of the company/paid-up value of each series of convertible debentures for purchase by NRIs.
  

• The overall ceiling can be raised to 30 percent if the company concerned passes a special resolution to that effect in its general body meeting and a board resolution.

• In case orders are placed in such scrips which are under the Restrict List / Watch List of RBI, the investor may be required to place a square off order. Loss on such square will be debited to his account whereas profit on such square off will not be credited.
  

• As per RBI guidelines, NRIs are not permitted to square-off trades during same settlement period. In case he transacts a square up, any loss incurred will be borne by him. However, profits will not be credited to his account.
  

• NRIs should always place hold on funds while placing a buy order and at the time of selling shares.

Follow these so that your investment in India remain clear and there are no hassels in trading and you are not in the clutches of law.