International Investing

If you are looking for US investment then you can invest using ETrade or CharlesSchwab. They do allow international investment accounts with some additional documentation. Tax gets automatically deducted as per US laws. If you want to get it back then you need to do additional documentation.

Hope people are still considering international equities for investment.

I recently opened an account with Danish broker Saxobank. They allow investing in all developed market equities.

I am living in the UAE and have a USD account here. The process was quite straightforward for me and it took just 3 days to get the account open.

I am considering investing in US equities, as a diversification from Indian equities and Indian Rupee. Although, I do not intend to have more than 25-35% of my portfolio in US.

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If you do not mind me offering an advice - Please stick to Indian markets. Indian markets have a long way to go in the long term. We do not need diversification into developed markets. The time to invest in developed markets was in 1980s, not now! Though you can find multi-baggers in any market, broadly Indian markets should outperform US and other markets by a large margin - again on a long term (at least 5 years) basis.

Disclosure: I’m a normal retail guy not an investment professional and not authorised to provide any investment advice.

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I completely agree with you. However, I prefer to have at least 20% of my portfolio in such securities which I can sell in case of urgent needs. The following are some points which made me consider developed/US markets:

  1. I don’t need to pay any short-term capital gain tax in US compared to 17% in India. So freedom to liquidate holdings quickly.
  2. Indian equities are volatile (I agree equally rewarding as well), so I cannot be sure if I will get a good price for my shares or not in the short term.
  3. Currency conversion, other costs to send funds from India back to UAE will be quite high and tedious.
  4. Usually in times of crisis, INR depreciates along with Indian stocks, which basically paralyzes your Indian portfolio for at least 1-2 years. During these periods, a US portfolio will at least not be in such a bad shape. Hence, providing me the opportunity to take some cash out in case of any urgent needs.
  5. I can satisfy my urge to trade due to lower transaction costs!

Honsetly, it is an alternative to keeping my emergency funds in UAE accounts, which give me absolutely no returns.

I understand that I can open an account in India for a family member and take care of most of the issues above, but I prefer not to go that way. My portfolio is increasing significantly due to my ongoing savings (not stock gains :confused: ) so I don’t think it is a good idea to transfer a lot of funds on someone else’s name. That can create needless security and tax issues.

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Also, over years the allocation will go down from 20% to probably less than 10% as I need an absolute amount as emergency funds (like 4 months salary). NOT necessarily 20% of portfolio!

Thanks, please feel free to advice. It is always great to get another perspective!

Different perspectives, needs, necessities make the market!

I agree with your above thinking. It looks like you will now have more money to invest and have a chance to increase portfolio size. Do what makes you feel better and at the same time with the present correction good quality stocks are at good accumulation prices in Indian markets, so invest a bit here too at these prices!

All the best and looks like you could be relatively young and nice to see matured thinking on savings and investment.

Thanks, I am still refining my asset allocation depending on my profile.
Constructive thoughts from others definitely help.

By the way, I am 29, hope that qualifies as young! :smile:
I am a CFA charterholder and working in M&A, Asset management since 5 years, so I believe that also helped me.

Regards

That’s younger than me for sure (33 yrs). Save and invest sensibly a lot now and you will reap disproportionate benefits down the line. With a right to go wrong, stay in equities, no gold, no bonds. Over long term equities will beat other avenues by a long shot. Lynch - I love him.

Looking at your work background - You know a lot better than me!

I agree, 100% equities until I turn 40 at least!

Well background helps but nothing beats Passion!

Cheers!

Bumping up an old thread. Anybody investing in international markets (especially emerging markets). Any good opportunities anywhere? Interactive brokers have started supporting international securities in India it seems.

I am not able to understand why people are doing India is the best here, If you want to invest in
electric car -Tesla ,
Jeff Bezoz - Amazon ,
Search , Deap mind , driverless cars - Google ,
Cryptocurrency proxy - Nvidia
etc then you have no choice in India.

Frankly many IT / Tech companies in U.S are far way better than that of India and ironically they sometimes trade at cheaper valuations too.
For example - Google and Tata Elxsi trades at 30 times earnings.
We have 8k miles trading 20 times earning and Oracle in US trades at 20 times earnings.
Apple trades at 18 times earnings with over 200 billion dollars in cash,
In india it would have been trading around 50 times earnings.

I have similar question, I do invest in U.S markets through my friend over there but would love to know if there is a better way doing that from India.

Thanks,

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Flipping the main question, how do OCIs and foreign nationals invest in India? Our regular brokers have a separate kind of account for them?

Thanks, @donbox5 for the info.

Someone has deleted my post. Well… I had mentioned that I use http://www.drivewealth.com to invest in US securities. Just checkout the website to know about the charges and sign up procedure.

Summary:
No minimum deposit, Upto 2.99$ per trade, or .99$ for buying a fractional share. You will need Govt issued id proof and address proof to sign up, which takes under a week.

Just in case you need a referral code, PM me.

I have few question, I will be thankful if you take out time to answer

  1. Do they connect with Indian bank account?

  2. How does currency conversion work? Do they publish conversion rate everyday?

  3. How does legal system works? Can Indians invest in any country? Do we need some kind of permissions?

You would appreciate from my questions that I am new to this.

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Mohnish Pabrai in his blog

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Here is something for those looking to invest abroad for ‘diversification’ purposes alone:

Keep in mind that by investing abroad, you also take up the unnecessary exchange risk. You may make a wonderful ROI, only to be robbed of your returns by bad central banking policies. In my opinion, an investor can get exposed to pretty much all the major economies in the world just by investing in Indian stocks.

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Hi

If anyone is using Interactive Brokers for investments outside India (I am speaking from a Resident Indian perspective) please could you share your experience or drop me a PM. I have some questions actually.

Other than Interactive Brokers is there any other broker which offers such a facility.

Thanks & Rgds
Deepak

Thought bit old post. But I have exactly the same queries and would appreciate any insight into how IB connects with your Bank account

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I came across this site vested.co.in for US investment. Looks very promising. But not sure how credible they are. I hardly see anyone talk about it. Does anybody use it?. Could you share the feedback?. What are the possible risks. ( I am not talking about risks in US investment. But broker risk).

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Hi all, this is my first post. I had spoken to them to get a sense on how they work. Listened also to their webinar. Am summarising my findings below

Interactive Brokers (INDIA)

Interactive Brokers, are large discount brokers in US, who have been in India for the last 11 years.

They deal with stocks, ETFs, MFs and bonds with cash delivery only. They do not deal with margin accounts which deploy derivative strategies. They offer customer account protection under Securities Investor Protection Corporation (“SIPC”) for a maximum coverage of $500,000 (with a cash sublimit of $250,000).

Indian resident is permitted to remit up to US$ 250,000 every financial year by the Reserve Bank of India under the Liberalised Remittance Scheme

How to open an Overseas Trading Account: The process is online with submission of PAN
Copy and address proof etc. An A2 form also needs to be filled up when money is remitted abroad. Account is opened after 2-3 business days. If you propose to trade in US market, then equivalent US dollars needs to be transferred from the your Indian bank account to Interactive Brokers Account through wire transfer. Please note you will not be able to directly link your trading account at Interactive Brokers directly with your bank account. Please note once the shares are purchased they reside in a pooled account and not in a specific individual Demat account.

Tax implications
30% withdrawal tax on dividends is deducted before being received by the customer. Unclear how the dividends are taxed in the hands of the customer
Capital Gains on overseas investments is treated as Other income head in Income tax and taxed as per your tax slab

Dual Account Structure offered for Indian Residents

This allows an Indian Resident to trade in overseas markets and in India (NSE). These two accounts are not cross marginable that means that they are funded separately and are treated as completely separated accounts and no money or assets can be transferred between these two accounts. A single user name and password can be used for interacting both accounts. The Indian shares are held in NSDL account.

Indian trades (stocks, options and futures) are charged 1 bps upto Rs 10 lakhs /100 lots of options and futures.

About Interactive Brokers

On a consolidated basis, Interactive Brokers Group (IBG LLC) has over $ 6.7 billion in equity capital.

Have reported solidly positive earnings for the past 18 consecutive years.

Interactive Brokers LLC is rated ‘BBB+’; Outlook Stable by Standard & Poor’s.

Watch the webinar to learn more: https://register.gotowebinar.com/register/7829551218080568834

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