How do I invest in the US market?
Just create account on Nivesh Mitr's Global Investing Platform, powered by Stockal. We will have your brokerage account created with DriveWealth - our US partner for clearing services. It will take 2 business days for your account to get approved if all your information is correct. Once approved, you will have to fund the account by transferring money into the brokerage account from your bank account.
Once the funds become available in your brokerage account, you will be able to make investments. Feel free to use the extensive research and support available on the platform. After selling any of your investments, whenever you want to get your money back, just click on "Withdraw and all your available cash will be sent over to your domestic bank account.
What are the documents required to transfer money to invest out of India?
The following documents are needed:
1. Form A2 along with a declaration form: As per FEMA, required every time the money is sent abroad to declare the sum amount that is to be transferred. Your bank will file this for you within the LRS filings. Stockal automatically fills this for you - all you need to do is, make sure that the information is correct, then download the filled-in form, sign and upload it back for your bank to file.
2. Bank KYC documents: PAN card and your address proof.
How do I fund my account?
Just click on the "Add funds" button available in many places post sign-up and enter the amount you want to send to your brokerage account.
If you are an Indian Resident, you will be remitting money under RBI's Liberalised Remittance Scheme (LRS). Currently, ICICI, IDFC, and HDFC Bank account holders can complete the LRS process online by signing into our platform and following the steps mentioned for fund transfer. It's likely that Stockal already has a tie-up with your bank - we have tied-up with most domestic banks to get our clients good forex rates and to help with fund transfers.
How do fractional shares work?
One of the unique things about the US stock markets is that investors can own fractions of stocks. Unlike in countries like India. So you could own 0.05 of Apple stock. Our brokerage partner DriveWealth allows you to own as low as 0.0001 share of any stock. And this is great for 2 reasons:
You don't have to think in terms of "how many shares should I buy?". You can simply decide to invest a certain amount of money and the number of units to be allocated to you gets automatically calculated and would get credited to your account. For instance, if a stock is valued at $27 and you decide to invest $100 in it, you will get 3.70 shares.
Many popular US stocks are more expensive than typical Indian stocks. While a single Apple stock is valued at over $200 as of this writing, Google costs over $1,000 and Amazon costs more than $2,000. Pepsi, Nike, Coke - all between $100 and $200. As of this writing. So, with fractional stocks you could effectively build a pretty diversified portfolio with small amounts of money.
Which Stock Markets are available on Nivesh MItr's Global Investing Platform?
Currently, we help you invest in US stock markets.
In another three months, we will have multiple other markets available - Germany, Japan, India, UK and Hong Kong. Over time, we will make investing totally ubiquitous - if you have an idea or come across a company you want to invest in, you will be able to make that investment without having to think if that stock is listed domestically or in some other country.
Interestingly, many large global companies have US listed ADRs which are available on Stockal. From Chinese giants like Alibaba to many Indian and European companies are all available.
Is there any tax implication on transfer / remittance of funds for making investment in foreign securities?
Transfer of funds into an external platform would not result in any profit/gain as it involves only transfer of funds to self. Further no transaction has been undertaken / executed resulting in any transfer of any asset.
However, w.e.f. 1st October 2020, any foreign remittance by resident individuals under Liberalised Remittance Scheme framed by RBI may trigger TCS (Tax Collection at Source) provisions which requires collection of tax by an authorised dealer at 5% (10% in case of non-PAN / Aadhar cases) where the total foreign remittance including transfer of funds exceeds INR 7,00,000 per annum. In this regard, transfer of funds into Stockal platform by way of foreign remittance may attract TCS. However, it is pertinent to note that AD would be liable to collect TCS @ 5% on the amount exceeding INR 7,00,000