EN
Investing in international stocks allows Indian investors to diversify their portfolios beyond the domestic market and gain exposure to global companies across sectors such as technology, healthcare, finance, and consumer goods. It also provides an opportunity to participate in the growth of businesses operating in developed and emerging economies.
Resident Indians can invest in international equities through various routes, including overseas brokerage accounts, Indian brokers offering global investing, and international mutual funds or Exchange-Traded Funds (ETFs). However, investors should understand the applicable regulations, taxation, currency risk, and investment costs before investing overseas.
Key Takeaways
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Indian residents can invest in international stocks under the RBI's Liberalised Remittance Scheme (LRS).
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Overseas brokerage accounts and Indian brokers offering global investing provide direct access to foreign markets.
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International mutual funds and ETFs offer indirect exposure to overseas equities.
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Currency fluctuations can increase or reduce investment returns.
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Overseas investments may be subject to tax in both the foreign country and India.
What are International Stocks?
International stocks are shares of companies listed on stock exchanges outside India. These may include businesses listed in countries such as the United States, the United Kingdom, Canada, Japan, Germany, Australia, Singapore, and several emerging markets.
By investing internationally, investors can gain exposure to companies and industries that may not be widely represented in the Indian stock market.
Why Invest in International Stocks?
Investing in international stocks offers several potential benefits.
Portfolio Diversification
International investments reduce dependence on a single country's economy and stock market.
Access to Global Companies
Investors can participate in the growth of multinational companies across industries such as artificial intelligence, semiconductors, cloud computing, pharmaceuticals, and consumer technology.
Exposure to Different Economies
Investing across countries provides exposure to varying economic cycles, industries, and growth opportunities.
Currency Diversification
Holding investments denominated in foreign currencies can help diversify currency exposure over the long term.
Ways to Invest in International Stocks
Open an Overseas Brokerage Account
Many international brokerage firms allow Indian residents to open trading accounts and directly invest in shares listed on overseas exchanges.
Depending on the broker, investors may also be able to purchase fractional shares of high-priced stocks.
Invest Through an Indian Broker
Some Indian brokerage firms partner with international brokers to provide access to overseas markets through a single investment platform.
This route may simplify account opening and portfolio management.
Invest Through International Mutual Funds
International mutual funds invest primarily in foreign companies or overseas equity funds.
These funds provide indirect exposure to international markets without requiring investors to buy individual shares.
Invest Through International ETFs
International ETFs track foreign indices, countries, sectors, or themes.
They provide diversified exposure by investing in a basket of overseas securities.
How to Invest in International Stocks?
Step 1: Select an Investment Platform
Choose a broker or investment platform offering access to the international markets in which you wish to invest.
Compare factors such as:
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Brokerage fees
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Currency conversion charges
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Available markets
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Investment options
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Regulatory compliance
Step 2: Complete KYC
Submit the required documents, which generally include:
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PAN card
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Passport
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Address proof
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Bank account details
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Identity proof
Documentation requirements may vary depending on the investment platform.
Step 3: Complete Tax Documentation
For investments in certain countries, brokers may require tax declarations such as Form W-8BEN for US investments to enable eligible investors to claim tax treaty benefits.
Step 4: Transfer Funds
Transfer money through your bank under the RBI's Liberalised Remittance Scheme (LRS).
The investment amount is converted into the relevant foreign currency before investing.
Step 5: Build Your Portfolio
Choose investments that align with your financial goals, risk appetite, and investment horizon.
RBI Guidelines for Overseas Investments
Resident Indians generally invest overseas under the Liberalised Remittance Scheme (LRS).
Under the scheme:
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Eligible individuals can remit funds abroad for permitted investments.
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Annual remittances are subject to the limits prescribed by the RBI.
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Investments must comply with FEMA regulations.
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Banks may require declarations and supporting documents before processing remittances.
Investors should refer to the latest RBI guidelines before initiating overseas investments.
Costs Involved
When investing internationally, investors should consider the following costs:
Brokerage Charges
Fees charged by the broker for executing transactions.
Currency Conversion Charges
Banks or brokers may charge a spread while converting Indian rupees into foreign currency.
Bank Transfer Charges
International remittances may attract wire transfer or processing fees.
Regulatory Charges
Certain exchanges or regulators may levy transaction-related charges.
Taxation of International Stock Investments
Dividend Income
Dividends received from foreign companies may be subject to withholding tax in the country where the company is listed.
The dividend may also be taxable in India according to the provisions of the Income Tax Act, 1961.
Capital Gains
Capital gains arising from the sale of international stocks may be taxable in India, depending on the applicable tax provisions and the investor's residential status.
Foreign Tax Credit
Where applicable, investors may be eligible to claim a Foreign Tax Credit for taxes paid overseas, subject to the relevant Double Taxation Avoidance Agreement (DTAA) and Indian tax laws.
Risks of Investing in International Stocks
Currency Risk
Exchange rate movements can increase or reduce investment returns when converted into Indian rupees.
Market Risk
Foreign stock markets may experience volatility due to economic, political, or company-specific developments.
Regulatory Risk
Changes in overseas regulations or Indian foreign exchange rules may affect investments.
Tax Risk
Different countries have different tax rules relating to dividends, capital gains, and withholding taxes.
Tips Before Investing Internationally
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Diversify across countries and sectors instead of concentrating investments in a single market.
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Understand the tax implications before investing.
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Consider currency risk while evaluating returns.
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Compare brokerage and remittance charges across platforms.
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Invest based on long-term financial goals rather than short-term market movements.
Conclusion
International stocks offer Indian investors an opportunity to diversify their portfolios and participate in the growth of global businesses. By investing through overseas brokers, Indian brokers, mutual funds, or ETFs, investors can access international markets while complying with RBI regulations. Before investing, it is important to understand the associated costs, taxation, currency risks, and regulatory requirements to make informed investment decisions.
Disclaimer: Access to US securities is offered via IFSCA Global Access route. Angel One Limited is registered with IFSCA as a Global Access Provider. Investment in securities market is subject to market risks, read all the documents carefully before investing. Any reference to securities is indicative and not a recommendation. Angel One Limited claims no right, title or interest therein, and no endorsement or affiliation is implied. Office address: Unit No. 256, Seats 1 to 4 located on the first floor of Pragya Accelerator II, Building -15B, Block – 15, Road No- 1C, Zone-1, GIFT SEZ, GIFT City, Gandhinagar – 382050. IFSCA Broker-Dealer Registration No. CMI2026BDK1061, GAP Registration No. IFSCA/GAP/BD/2026-2027/016.
