Indian Expat Investment Options: From NRI Accounts to Offshore Trusts

What are the best investment options for Indian expats?

Indian expat investment options include Indian mutual funds, real estate, fixed deposits, bonds, equities, the National Pension System (NPS), and offshore investment accounts.

Non-Resident Indians (NRIs) can invest in India through NRE/NRO accounts, repatriable mutual funds, and direct equity portfolios. Those seeking diversification may also explore international ETFs and offshore trusts for asset protection and tax efficiency.

Combining local and offshore investing helps Indian expats balance growth, liquidity, and tax efficiency. However, it’s generally smarter to focus more on portable, offshore investments for those who intend to stay abroad long term or for good.

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The information in this article is for general guidance only. It does not constitute financial, legal, or tax advice, and is not a recommendation or solicitation to invest. Some facts may have changed since the time of writing.

Investing as an Indian expat

Expat investing in India offers opportunities for growth across one of the world’s fastest-growing economies.

Non-Resident Indians (NRIs) can maintain Indian bank accounts, invest in local markets, and still benefit from rupee appreciation and solid domestic demand.

However, investment eligibility depends on your residency status under FEMA (Foreign Exchange Management Act) and Indian tax rules.

How to invest as an Indian expat

Indian expats can invest both in India and overseas, but doing so correctly requires structuring accounts and understanding regulatory requirements. Here’s how to get started:

1. Open the Right NRI Bank Account. Set up an NRE (Non-Resident External) or NRO (Non-Resident Ordinary) account with an Indian bank.
   • NRE Account: Use this for foreign income; both principal and interest are tax-free and fully repatriable.
   • NRO Account: Use this for income earned in India, such as rent or dividends; taxable but repatriable within limits.
2. Link Investment Accounts. You’ll need to link your NRE or NRO account to a Portfolio Investment Scheme (PIS) to buy and sell Indian stocks and mutual funds as an NRI. This setup ensures compliance with RBI rules.
3. Choose Your Investment Type.
   • For Indian assets: invest in mutual funds, fixed deposits, NPS, and bonds through your NRI accounts.
   • For global exposure: use offshore investment platforms or licensed international brokers to access global ETFs, mutual funds, and foreign stocks.
4. Review Tax Rules and Repatriation Limit. NRE deposits are tax-free, while NRO income is taxable in India. Before investing large amounts, confirm whether your host country taxes Indian income or if a Double Taxation Avoidance Agreement (DTAA) provides relief.
5. Seek Professional Guidance. Engage an international financial advisor familiar with Indian and cross-border investment rules to structure your assets efficiently and avoid compliance issues.

Is investing in India worth it?

Yes. India offers robust economic growth, a young population, and strong corporate earnings potential. The Indian stock market has outperformed notable benchmarks over the past decade.

But NRIs should balance rupee exposure with foreign assets to mitigate currency risk and ensure liquidity outside India.

Tax and repatriation rules can be complex for NRIs, so professional advice is recommended before committing huge sums.

What are the best investment options in India for expats?

Some of the best Indian expat investment options include a combination of traditional and modern asset classes:

1. Mutual Funds and ETFs: Indian equity and hybrid mutual funds provide access to local growth sectors like technology, banking, and energy. Index-linked ETFs provide diversification and liquidity for NRIs investing in India.
2. Real Estate: Property in cities like Mumbai, Bengaluru, and Hyderabad remains a popular choice, as they offer rental income and capital appreciation. Keep in mind that property management from abroad can be time-consuming.
3. Fixed Deposits and Bonds: NRE Fixed Deposits provide stable, tax-free returns on foreign currency investments. Government and corporate bonds are also attractive for conservative investors.
4. National Pension System (NPS): NRIs can invest in the NPS for retirement planning, enjoying tax benefits while building a long-term corpus.
5. Direct Stocks: Investing in listed Indian companies through the PIS route can yield strong long-term gains, especially in growth sectors such as tech, finance, and manufacturing.

Best investments for Indian residents

For Indian residents, investment options expand further including small-savings schemes, Public Provident Fund (PPF), and Employee Provident Fund (EPF).

These remain stable long-term options for those planning to return to India someday.

What are the investment options for NRIs in India?

NRI investment options in India include:

• NRE/NRO fixed deposits
• Mutual funds through NRE or NRO accounts
• Portfolio Investment Scheme for direct equities
• National Pension System (for long-term savings)
• Real estate and commercial property investments

What are the alternative investments in India?

NRIs seeking higher returns or diversification can explore private equity, venture capital funds, gold ETFs, REITs, or alternative investment funds (AIFs) registered with the Securities and Exchange Board of India.

These can provide access to emerging sectors like fintech and renewable energy, though minimum ticket sizes and risk levels are higher.

Best Offshore Investments for Indian Expats

Offshore investing offers some of the best investments for Indian expats, which include multi-currency offshore accounts, offshore bonds, international pension plans, real estate in developing markets, and offshore trusts for tax efficiency and diversification:

1. Multi-Currency Offshore Investment Accounts: Opening an offshore investment account in a stable jurisdiction allows you to hold assets in USD, GBP, or EUR. This helps hedge against rupee volatility and simplifies future relocation, especially if your family or children settle abroad.
2. Offshore Bonds and Portfolio Bonds: Offshore insurance or portfolio bond structures — often based in Isle of Man, Guernsey, or Luxembourg — allow Indian expats to hold funds, equities, and alternative assets in a single tax-efficient wrapper. These are especially useful for long-term wealth accumulation and succession planning, since assets can grow with deferred taxation and be easily passed on to beneficiaries.
3. International Pension Plans (IPPs): For expats not eligible for India’s National Pension Scheme or Employee Provident Fund, international pension schemes (such as QROPS or international retirement savings plans) offer portability and tax advantages. These are designed for mobile professionals and entrepreneurs who live in multiple countries during their careers.
4. Offshore Real Estate in Growth Markets: Indian expats can invest in property where ownership laws are favorable and yields are stable. Beyond capital growth, these properties can serve as secondary residences or future retirement homes. Selecting markets with bilateral investment treaties with India also provides extra legal protection.
5. Offshore Trusts and Holding Companies: High-net-worth Indian expats often establish offshore trusts or holding companies to manage international assets and trim exposure to potential tax or legal complexities in multiple jurisdictions. Proper structuring ensures compliance with Indian laws while still providing confidentiality and estate planning benefits.

Best Alternative Investments for Indian Expats Abroad

The best alternative investment options for Indian expats include private equity and venture funds, second citizenship programs, hedge funds, collectibles, impact investments, and regulated digital assets.

These options appeal to high-net-worth individuals seeking diversification beyond traditional markets and greater global flexibility.

• Private Equity and Venture Capital. Invest in global PE and VC funds targeting startups or private companies. Indian expats in Dubai and London use regulated offshore platforms for access to these long-term, high-growth opportunities.
• Residency and Citizenship-by-Investment. Programs in Portugal, Greece, Malta, and the Caribbean allow investors to obtain alternative residency or passports through real estate or fund investments — offering mobility, asset protection, and estate planning advantages.
• Hedge Funds and Structured Products. For expats seeking non-correlated returns, hedge funds and structured notes provide diversified access to global strategies and currencies.
• Collectibles and Passion Assets. Fine art, rare watches, vintage cars, and wine appeal to Indian expats who want tangible assets with potential long-term appreciation. These should be acquired through reputable dealers or specialized funds for authenticity and management.
• Impact and ESG Investing. Investments in renewable energy, sustainable infrastructure, or social development funds let expats align financial growth with positive change — increasingly popular among younger professionals abroad.

For Indian expats, these alternatives should complement, not replace, a core portfolio of equities, bonds, and real estate.

Allocating a small portion of a portfolio to alternatives, depending on risk appetite, can improve diversification and long-term resilience.

Offshore Structures for Indian Expats

Some high-net-worth Swedes establish offshore companies or trusts to manage assets efficiently and maintain confidentiality.

These entities can also help streamline estate planning and reduce exposure to Swedish inheritance tax.

However, compliance with OECD reporting standards and Swedish CFC (Controlled Foreign Company) rules is essential.

How to open an offshore company in India?

India does not permit companies to be incorporated offshore within India itself, but Indian expats or NRIs can establish offshore entities abroad to manage international assets. To do so:

1. Choose a jurisdiction with favorable tax treaties, such as Mauritius.
2. Appoint a registered agent or corporate service provider to handle incorporation, licensing, and compliance.
3. Ensure compliance with Foreign Exchange Management Act and OECD reporting standards.
4. Use the offshore company for legitimate purposes, such as holding overseas property, international investments, or business income. Maintain full disclosure to Indian tax authorities if required.

Properly structured, an offshore company can simplify overseas investment, reduce withholding tax, and enable smooth estate transfers, especially for Indian HNWIs managing global portfolios.

Indian Tax Residence

Your tax liability in India depends on how long you’ve stayed during the financial year.

• Resident and Ordinarily Resident (ROR): Taxed on worldwide income.
• Resident but Not Ordinarily Resident (RNOR): Taxed only on Indian and certain foreign income.
• Non-Resident Indian (NRI): Taxed only on Indian-sourced income.

Is an NRI a tax resident of India?

No. A Non-Resident Indian is not a tax resident of India if they spend less than 182 days in India during a financial year, and also do not meet the 365-day rule over the previous four years.

Does India tax foreign income?

India does not tax foreign income for NRIs. Only income earned or received in India is taxable.

You may also claim relief under Double Taxation Avoidance Agreements with your host country to avoid being taxed twice.

Tax relief for Indian expats

India’s DTAA network with more than 90 countries ensures that NRIs are not taxed twice on the same income. If you pay taxes abroad, you can often claim a credit or exemption in India.

Proper documentation and filing through Form 67 are required to claim foreign tax credits.

India tax on investments vs host countries

While Indian investments may be taxed at source, e.g., on dividends or capital gains, your host country may tax them again. The DTAA determines how credits apply.

Expats can utilize offshore accounts or international mutual funds to simplify cross-border taxation.

What happens to your investments when you move abroad from India?

You can retain investments in India, but you’ll need to reclassify your accounts and update your KYC status as an NRI.

Your taxation and repatriation rules will change, especially for mutual funds and fixed deposits.

Review your portfolio with an international financial advisor to maintain compliance with FEMA and Income Tax Act provisions.

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