How to invest in foreign stocks from India?
We all want to invest in foreign stocks and globalisation of the market ensures this. You also want to grow your portfolio by buying into foreign stocks and gain higher returns from foreign markets.
What are Foreign stocks?
Foreign stocks are the stock of foreign companies or the companies which are based on out of India. These companies which are non-domestic make for a great investment option want to know how to invest in foreign stocks in India. Here are the 3 best ways investors in India can invest in foreign stocks.
There are many ways to invest in foreign stocks from India. You can select any method at your convenience. We are discussing 3 best ways to invest in foreign stocks in India :
1. Open an account with Indian brokers having a tie-up with foreign brokers:
This is the best and comfort way of investing in foreign companies. There is a list of full-service Indian brokers such as ICICI Direct, Reliance Money, etc. having tie-up with foreign brokers. The good thing about this way is that you would not have to take any stress if taking permission abroad. Using their full-service brokers, You can easily invest with them.
2. Exchange-Traded Funds
The second option for foreign share trading is to invest in exchange-traded funds. It’s prices fluctuate all day. Everyday it’s bought and sold. This is totally different from mutual funds — which are sold or bought about once per day after the market closes. You can purchase ET funds available on international indices which gives requisite exposure into a basket of international stocks. You do not need to have exposure to foreign markets to access these funds. Indian brokers also offer ET funds as investment options directly from a local market.
Be sure that the ETF you choose to invest in is registered with the Securities and Exchange Board of India. To invest in ETFs you must have a brokerage account with either an Indian company or an international one.
3. Direct Investment:
Direct but complicated way to foreign share trading. Indian residents can invest up to $250,000 per financial year without any permission as per RBI. Also, you have to ensure that the international market should have no cap on investments before investing on that market. After picking the country, open an account with international Demat and trading companies where you need to invest. There are many companies which provides investment directly:
- Interactive Brokers: The brokerage charges are a bit high here. You would have to pay $10,000 for a month as brokerage charge and the minimum deposit they require is $5000. They have an office in India where you can visit and open your account.