Tips on Managing Your Investments Before Becoming an NRI

So your new job is goingto take you away from India for the next few years? We are sure there are a lot of preparations on your mind and your to-do list just keeps getting longer. Now that you will be shifting your base to a new country, you need to give a thought to your existing investments as well aside from all other preparations.

All we are saying is now’s the best time to explore NRI investment options in India. Being a NRI makes it a little difficult to manage your investments back home. It, therefore, becomes important to find ways of managing those investments along with your professional responsibilities.

You may ask why. Well, what happens is shifting base to a new country will change your status from ‘Resident Indian’ to ‘Non-Resident Indian’ (NRI).With the new status of an NRI, your existing investments need to be in compliance with the present rules and regulations that govern NRI status.

Here are few points you need to keep in mind while making NRI investments in Indiawith the existing rules and regulations

• Open NRE Account If You have Repatriation Requirements – You will have to convert your existing bank accounts into NRE/NRO accounts. You will be allowed to deposit your earnings in India and transfer money overseas using these accounts. RBI guidelines allow you repatriate an amount of up to USD 1 million per financial year from your NRO account.

• Open an NRO demat account– NRIs face a few investment restrictions particularly in terms of equities. You can either sell off the shares or transfer your sharesfrom your existing demat account into an NRO demat account. You will not be able to sell off shares in your existing demat account beforeyou became an NRI.

• Mutual fund investments – Keep your Asset Management Companies (AMCs) informed about your profile change, including your address and bank accounts through a ‘Know Your Customer’ change form.

• Power of attorney - Give power of attorney to someone in India, maybe a family member or a trusted friend.Mutualfunds allow a power of attorney (PoA) holder to take these decisions on your behalf. Power of attorney is a legal way of giving power to someone to act on your behalf.

• Open a PPF Account –Open a fresh PPF account before you leave India. PPF Account cannot be opened by an NRI. Once you are an NRI, you can always deposit money in your existing PPF account that you opened before leaving India.

• Connect Your Loan Account With Your Bank Account– If you have a home loan running, and you still are paying EMI’s, remember to connect your loan account with your banking account before leaving India and continue with online payment.

• Insurance Policies – All your insurance policies will remain active and you continue paying premiums on it. However, do inform your insurance company about the change.

• Health Insurance – Getting a health insurance would be difficult once you leave India, with additional documentation and visits. It is better to get a health insurance before you leave India.

• Real estate – You can continue to lease/own residential and commercial properties in India.

Considering these important tips before becoming an NRI would help you have a smoother transition and a peaceful time abroad. Managing these tasks before you fly out of the country would help avoid a lot of paperwork and documentation related hassles in the future.

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Kotak Securities is one of India’s largest share broking firm offering demat account, online trading, mutual fund and NRI account along with a research division specializing in Sectoral Research and Company Specific Equity Research. We also provide you with latest updates and news from share market.

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