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Are OCIs eligible to invest in Indian Share Market?
Posted on 17/09/2010 2:01 pm
Are OCIs eligible to invest in Indian Share Market?
Dear Friends,
I have searched the forum but didnt find an answer and so, posting a new question here.
I would like to know whether OCI Holders(Overseas Citizen of India) eligible to invest in Indian stock exchange. Anybody had experience in it? Please share. I have googled and i see only NRIs can invest in Stock Market but nowhere mentioned about OCI Holders.
If you have any links, please post.
Many Thanks,
Mohan.
meetmohan
Member since 24/11/2008
Posted on 17/09/2010 3:17 pm
Re: Are OCIs eligible to invest in Indian Share Market?
Yes you can.
raj
Member since 27/01/2004
Posted on 20/09/2010 6:42 am
Re: Are OCIs eligible to invest in Indian Share Market?
Investment for Non Indians depend on the sectors they are investing and also the formalities might be different.
In my case one of my German counterpart wanted to invest in my company and we had to get the RBI's permission for it.
savion
Member since 23/04/2004
Posted on 20/09/2010 12:13 pm
Re: Are OCIs eligible to invest in Indian Share Market?
@savion
does your german counterpart hold OCI ?
matrix
Member since 16/05/2005
Posted on 20/09/2010 12:36 pm
Re: Are OCIs eligible to invest in Indian Share Market?
No. He is a German-French by birth.
But i also feel OCI are as good as non indians even though they possess a OCI.
savion
Member since 23/04/2004
Posted on 20/09/2010 4:15 pm
Re: Are OCIs eligible to invest in Indian Share Market?
@savion
What you are talking about is investing in a company and/or take management control of a company registered in India. Yes, for such purposes one needs to get RBI's permission. But then, AFAIK this has been eased for most, if not all, industries. If I'm not wrong the same rules apply to FIIs too.
@meetmohan
Yes, you can invest in Indian stock market directly as an individual. OCI is in effect nothing but NRI but only called differently and it gives you the same set of entitlements that NRIs get.
Though, there is a problem I see here. For investing in India you should have a PAN Card + DEMAT account which has a prerequisite of local address and a proof of it, which you do not have. OCI doesn't have an Indian address on it! but only your German address.
Unfortunately, OCI is a very expensive tourist visa to visit India all your life, anytime you want, without any hassles. Effectively, you can't get a SIM card with this in India because you won't be able to prove your residence in India. No official process in India has been updated to accept this ID as a valid ID. Banks too do not accept it as a sole ID proof.
It looks like all this was not thought through before this new visa was introduced. Shouldn't all the OCI holders in Germany lodge a RTI request to get a clarification from the Govt. of India about this? Or is there any other way to get this thing sorted out?
Regards,
Rohith
Rohith
Member since 06/05/2005
Posted on 23/09/2010 8:57 pm
Re: Are OCIs eligible to invest in Indian Share Market?
@Rohith,
You wrote "OCI is in effect nothing but NRI" - NO. With OCI, it is almost impossible to invest in Share Market. I have called 2 Brokerage houses to get a Trading and Demat account - Geojit, India bulls. They can open accounts only for NRIs.
Do you know any brokerage house which accepts OCI holders?
As you said, NRIs has to take always permission from RBI to invest in every company as they want to monitor the foreign money flowing into the country.(i dont know how will they verify if suppose i buy shares from a particular company without taking any permission).
Any OCIs who have knowledge on this, please share.
Thanks,
Mohan.
meetmohan
Member since 24/11/2008
Posted on 24/09/2010 9:16 am
Re: Are OCIs eligible to invest in Indian Share Market?
@meetmohan
I guess you did not really understand the problem here, let me try to explain again.
NRIs and OCIs do have the same set of rights and privileges as shown here: http://mha.nic.in/pdfs/oci-chart.pdf
For all practical purposes there is no difference between these two categories. Here I'm quoting from the benefits section "Parity with Non resident Indians (NRIs) in respect of economic, financial and educational fields except in relation
to acquisition of agricultural or plantation
properties. No parity shall be allowed in the
sphere of political rights."
Therefore, any OCI should be able to operate and invest in India without any problem. The problem is with the implementation of the same where financial institutions like banks and brokerage firms have not been informed enough to do this. On the other hand there have been no explicit modifications to the procedures of supplying satisfactory documentation to open an account at these FIs as well.
This is a catch-22 situation for all the parties involved.
Coming to your other question of RBI permission, that is a completely different matter altogether. You as an individual (and most of us in this forum) would be investing in secondary market and sometimes in primary markets. However well you plan your investments you will never be able to gain management control of the company you are investing in. This permission has nothing to do with Forex but for satisfying other legal frameworks like money laundering and FI investment limits in sensitive industries etc.
Of course, this does not hold for those high net-worth individuals who are always looking for better investment opportunities to make their next fortune.
Rohith
Member since 06/05/2005
Posted on 24/09/2010 9:28 am
Re: Are OCIs eligible to invest in Indian Share Market?
BTW, just to clarify again, I too am an OCI holder and have been having these problems ever since. I could not get a SIM card on my own but rather had to rely on my friends and relatives to get me one.
This would be the same for every other walk of life where you would have to present a valid ID and address proof. This is a fundamental problem with the newer IDs.
Rohith
Member since 06/05/2005
Posted on 24/09/2010 10:30 am
Re: Are OCIs eligible to invest in Indian Share Market?
Most of the problem maybe because you dont have a PAN number which is compulsory nowadays. Getting a PAN is easy. Use your permanent address in india, can also be applied online
https://tin.tin.nsdl.com/pan/index.html
or by visiting the office, pay around 100 Rs and the card comes home in 2 weeks. With this one can open a Demat account with most of the banks.
One can get PAN even with a foreign address..see link below
http://www.tin-nsd...itionalguidelines.pdf
Dont see why it is difficult to invest as an OCI
http://www.sbicaps...om/OurNRITrading.aspx
http://www.motilaloswal.com/home/
raj
Member since 27/01/2004
Posted on 24/09/2010 2:20 pm
Re: Are OCIs eligible to invest in Indian Share Market?
For easy access and consolidating all your investments I would recommend using https://www.fundsindia.com/
I am using it and am satisfied. In case you need a financial advisor, just send me a personal note. I am using one and am satisfied with the services provided.
NOTE: I have DEMAT account with SBI, but still chose this to make the process easy.
jackal
Member since 06/09/2004