There is an Indian company listed on the BSE that I am very interested in.They do not have a US ADR or ADS.My brokerage (Fidelity) does not trade BSE stocks.Any ideas on how to buy stocks on the BSE in the US?Thanks!Chris - long TTM
Is it traded on LSE? If so, you can trade it on etrade or Ameritrade, I believe. If you need to have your broker place a trade, it can cost about $70 for 1000 or fewer shares, I think.
Sorrying, amending that, I don't think these brokerages will trade the BSE. But there may be some that will. I'll see if I can find the notes I made about this when I was a member (trial) of Global Gains. Anybody else a member who could look up that discussion item?
I don't believe that non-India citizens can directly invest in an individual equity. Mutual funds is the only option currently.
Hi Chris,Currently, there are no ways for non-indians or non pio (persons of indian origin) to invest DIRECTLY on the sensex or BSE. This is due to the SEBI rules about controlling the hands in which the rupee lands ...if it makes any sense.However, as i am sure you know, you can invest in India through Ishares or Blackstone's closed end fund (INF)Hope that helps.- NRI
Or if you have millions your broker can give you a "promissory note". The broker is a qualified buyer and buys stocks for you and promises you the economic benefits in return for a fee. Worth talking to your broker if have the big bucks.
NRI,Do the prohibitions extend to Americans working and residing in India? I've just recently landed here to begin a 2-year stint in Pune and am interested in possibly investing in the Indian equity market.I'd be curious as to what you know and any links, references you can provide.Separately, what is required for Indian nationals, native or NRI, to invest in the Bombay Stock Exchange?
"Do the prohibitions extend to Americans working and residing in India? I've just recently landed here to begin a 2-year stint in Pune and am interested in possibly investing in the Indian equity market."- NO idea , best to walk into a bank and ask a wealth manager, they can help you, do not buy anything else from then though, there is an icici bank office almost everywhere. Separately, what is required for Indian nationals, native or NRI, to invest in the Bombay Stock Exchange?Nothing except a PAN number - a tax identification numner. If you have a PAN number you can walk into icici bank ( avoid other brokers IMHO, icici wont go bankrupt or disappear with your money like "hometrade"), meet a bank officer to setup a brokerage account and start trading.
mardukkorn,Thanks for the reply! Your second answer give me good indication about the first question.I would guess that if a tax ID number is required then one probably has to earn rupees and pay Indian taxes in order to trade on the BSE.For some expats, I guess that might be the catch. For example, my employer pays me in USD to my Stateside accounts. To my knowledge, I will not require an Indian tax ID. But I'm unsure at this point.In any case, I'll continue to make queries.Separately, I've noticed very attractive terms at ICICI Bank and others for longer-term deposit "schemes" as they're called. I laugh a little each time I see that for scheme in American usage often connotes a sinister element. I've already inquired about these and look forward to earning 9.50% interest on something analogous to a 2-year CD.Any thoughts on these bank vehicles?A
My understanding is that the CD's (or "fixed deposits," as they are called in India) earning 9.5% are in Indian rupees (not USD). Moreover, if the amount of interest earned per year is more than Rupees 5,000, then the holder needs to pay a tax on the interest earned. The tax is generally deducted automatically by the bank (its called TDS -- tax deduction at source). I'm unsure of the tax rate, though. Although the interest rate seems high by U.S. standards, one has to view it in the context of inflation in India. The "official" government figure for inflation is about 5%, but anyone in the big metro's will tell you that in reality it should be much more than that. I visited India in December 2000, and then in December 2006. In these six years, the prices of many products in the market actually more than tripled or quadrupled. There is no "sinister element" in these interest rates. However, Indians make a distinction between public banks (in which the government holds a majority stake) and private banks. The biggest name in the former group is State Bank of India (SBI), whereas the two biggest names in the latter group are ICICI Bank and HDFC Bank. There is a belief among Indians that the public banks are "safer" than the private one's in that the government will not let them (esp. SBI) fail.
Good point about INdian inflation rate. Indeed, interest-bearing investments are always baselined relative to inflation rate.As I'm paid in U.S. dollars and the rupee has been rising, this could be my version of a carry trade where my U.S. dollars earn 9.5% interest on top of currency appreciation.Anyway, there's currently a snafu in my company payroll so I'm lucky just to scare up a few hundred rupees for food!Thanks for the good advice and insight into banking in my new home.A
Hi,You might have to investigate this further. I understand, that the restrictions apply to Americans working and residing in India.For Indian Nationals, assuming they hold an Indian Passport they are completely free to invest in individual equities on BSE.For persons of Indian Origin (PIO - your mom/dad was an Indian passport holder but you were born outside of India and hold another countries' passport/citizenship), you can invest in India through mutual funds that are issued/managed by Indian mutual fund companies but cannot invest directly in Indian equities through BSE.I hope the above helps, sorry for the delay in responding to you.I will get back to you with a few links..one link that has good reliable information for mutual funds in india is mutualfundsindia.com...(I know, original!:)In words of fellow fools, fool on:)- NRI13
Information from sify.com on following question:Can a US citizen have a PAN card?at this link sify.com/finance/fullstory.php?id=14445050And the answer given by Mr. AN Shanbhag is: "You are a person of Indian origin. Even if you were a rank foreigner, you could have applied for PAN."Person asking question was a PIO (person of Indian origin).If an employer is an Indian company then monies paid in US is also liable to be taxed by Income Tax Department of India. In this case US-IRS will have to be informed that since the income is laible to be taxed by India's Income Tax Department under relevant double taxation avoidance treaty you are exempt from paying any tax to US-IRS.If employer is a US company it may split your paycheck into two parts- one, for paying into you US account and the other, to pay for costs of living while in India (called subsistence allowance). The money paid into US account will be liable to be taxed according to US Tax Laws. The subsistence allowance is taxed by neither country. But if you saved some money out of it then you will have to declare that as "income" to US-IRS.(Disclaimer: These statements I am making are all based on my intuitive understanding of how double taxation avoidance treaties are made. The rationale behind these treaties is to let at least one country to tax the earner of an income but also to not force him to pay tax to both countries on same income. You can find out more information about double taxation avoidance treaties that US has with India at IRS website).
To invest directly, you need FII status. Depending on the size of your pocketbook (due to our mandate) you can invest with or through me, but you'll have to contact me privately to discuss details.
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