If you are looking to diversify your investment portfolio across geographies, the US stock market can be a good starting point. And, if you are wondering as to how to invest in the US stock market from India, you will be pleasantly surprised to know that the process is extremely simple and easy to complete. You can invest in the US stocks from India or trade in Tesla shares, all from the comfort of your home or office.
Owning shares of Amazon, Google or Apple is easier and almost similar to that of buying shares of Indian companies on stock exchanges in India. What gives it a different shade, however, is that the buying process involves an international brokerage house and as an investor one needs to adhere to the RBIs foreign exchange rules. But, to make sure that the investor focus remains on buying US stocks with a click of a mouse, the entire documentation part is handled by the international brokerage firm.
Indian brokers like HDFC Securities, Motilal Oswal, Geojit and fintech platforms like Stockal provide holistic US investing facilities.
What international brokerage platforms ensure is to keep the international investing easy, simple and secure with all paper-work and authorizations from banks being covered under one roof. From getting the RBI clearances to finding the right bank account in the US and opening an account, these international brokerage companies make it a one-stop-shop for you. Once the US stocks account is opened, with a few clicks be ready to trade in international stocks. The process of investing in the US stock market is seamless with all the paper-work with US-based entities is done by the brokerage firms.
A typical global investing platform which could be the best brokerage account for international trading will involve 5 key steps before you can invest in the US stocks from India. Here they are:
1. Account Opening
Once you have identified the best brokerage account in India for buying the US stocks, the online registration of the account is the first step. Its an easy, simple and a quick process. One just needs to enter details such as name, email and mobile number to start. Once the account is created, your brokerage account also gets created automatically.
During the process of opening the account, you will need to furnish certain documents to establish your identity and to provide the address proof. The documentation is bare minimum and that includes a combination of ID proof (with picture) and address proof. For the ID proof, one can furnish (any one) voter ID, PAN card, Valid driver’s license, Passport or Voters registration card and photo. The utility bill or the mobile phone bill or even the bank or credit card statement may be provided as address proof. Alternatively, Valid driver license with address or Government issued Photo ID with address such as Aadhaar card or Passport will suffice.
3. Adding Funds
After your account is approved, you are allowed to add funds to your brokerage account.
4. Forex formalities
Before starting to add funds and invest abroad, you need to be careful with the RBI rules on forex which is what Liberalised Remittance Scheme (LRS) is all about. As an Indian resident, you need to buy dollars ( or any other currency) using Indian rupees (INR) from an authorised dealer (the bank) in India. The dollars can then be spent abroad or remitted abroad for acquiring property or other assets such as equity shares.
Currently, under the LRS rules, any resident individual including a minor ( countersigned by a guardian) is allowed to remit up to 2.5 lakh US dollars (USD 2,50,000 ) in each financial year. At an exchange rate of Rs 73 to a dollar, it is about Rs 1,82,50,000 or Rs 1.82 crore.
So, a bit of paper-work for you. You will require to complete the formalities related to LRS form before starting to trade.
5. Forex Rates
While transferring rupee funds from your Indian bank account to your brokerage account in the US, the foreign exchange rate matters. To help you get a favorable exchange rate, some of the international brokerage platforms where you open the account have tie-ups with leading nationalized banks to get good low forex rates for you. Alternatively, you can contact your banker for transferring funds.
So, now you have the brokerage account in place and funds transferred into it. Whether you want to buy the NASDAQ stocks from India or start trading in international stocks, you are good to go. From the US-listed ADRs to Chinese giants like Alibaba to many Indian and European companies are all available from the comfort of your home. And, what’s more, you can invest in the US stocks with as low as Rs 100!