Yes, you can really invest overseas and it is completely legal too, under the RBI’s Liberalised Remittance Scheme guidelines (LRS). Reserve Bank of India (RBI) has laid out a set of policies that governs the maximum amount and purposes of remittance. Under LRS, an Indian Resident can annually send or invest upto USD 250000 abroad without seeking approval from RBI. This scheme has simplified it for Indian residents to study abroad, travel and make investments in other countries. For latest up to date information, refer RBI’s website and also see article 6(iii) for specific LRS regulations regarding investment in equity.
Here, the shares are owned by a third party custodian in the ‘street name’ of the broker rather than the underlying investor. This is why you do not receive direct emails from the custodian regarding your holdings. Also, if you need to confirm ownership of your shares, then as per SEC (Securities & Exchange Commission) guidelines, you can contact our broker partner, Drivewealth directly at email@example.com
Its very easy to transfer and withdraw funds. All you need to do is to use the netbanking facility of your respective bank account. Also the maximum amount that you are allowed to fund your demat account with under RBI’s Liberalised Remittance Scheme is USD 250000.
On our platform you can invest in either full or fractional shares. If the investment is in full shares, then our broker partner, Drivewealth will route the orders to market centers on an agency basis. If the investment is in fractional shares, our broker partner, Drivewealth will satisfy the order from on its own account on a principal basis, at the National Best Bid or Offer. NBBO means that the broker partner cannot add margin to the price. So, any order for both full or fractional shares will be executed via both methods, part as agent and part as principle.
Taxes - For our users there are two types of taxation events: (1) Taxation of Investment Gains in India - Foreign shares held by an individual for more than 24 months are treated as long-term capital assets and others are treated as short-term capital assets. Capital gain from sale of long-term capital assets would be taxed at 20% with the indexation benefit on purchase price or at 10% without such indexation benefit. Indexation is applied to adjust for inflation over the period of holding the asset. Capital gains from sale of short-term capital assets would be taxed at the slab rates applicable for the individual.
(2) Taxes on dividends - Unlike investment gain, dividend income is taxable in the US at a flat rate of 25%. Fortunately, the US and India have a Double Taxation Avoidance Agreement (DTAA), which allows taxpayers to offset income tax already paid in the US. The 25% tax you pay in the US is made available as Foreign Tax Credit to you and can be used to offset your income tax payable in India.
At max, it takes only 1-2 business days to get your account opened with us.