Investing in Foreign Stocks: How To Invest In Foreign Stocks From India?

Sushree Sangeeta Behera Sushree Sangeeta Behera
Sep 10, 2021 6 min read
Investing in Foreign Stocks: How To Invest In Foreign Stocks From India?

There's a well-said quote that "When money speaks, no one in the entire universe checks the grammar". That's true, no doubt, and the whole world acknowledges this truth right now.

If in the foreign stock market, the value of the share a person has bought increases, the financial profit out of it gets unimaginable hype. Just as an example, Warren Buffet, at the age of 11, had made a profit of 40* times than his investment. His twenty-dollar investment turned into 800 dollars at the end when he withdrew his earnings. One needs to put money into the perfect hole if they want to surpass other competitors in the league. For that, the best place is no doubt 'The Stock Market'.

Why Should We Invest In Foreign Stocks?
How To Invest In Foreign Stocks?
How Much To Invest In Foreign Stocks?
Taxation On Foreign Stocks Investment?
Conclusion
FAQs

How to trade in foreign stocks from India?

Why Should We Invest In Foreign Stocks?

Have a look at your daily life. You will notice, being in any corner of the country, you have been using so many international brands. Some brands are so integrated into our lives that it becomes difficult to imagine a day without them.

Products of Apple, Google, Amazon, Netflix are flourishing every second. These international brands have competitive skills and can never let their brand down. By imagining the growth and market value of these brands, you can imagine how gigantic these foreign stocks can skyrocket your investment.

As these brands have significant uses in our daily life, and if these uses gain a massive profit for you, then it will be a wiser choice to invest in these foreign stocks.

How To Invest In Foreign Stocks?

How to invest in Foreign Stocks
How to invest in Foreign Stocks

Stock investment is now becoming easier. Many agencies and brokerage houses are flourishing all over the world. The international stock investment is now connecting its network everywhere.

One crucial thing everybody should understand before going with any brokerage house. Many scams and fraud brokerage houses are also settled in the market. The bunch of crooks can engulf your entire investment and leave you with a considerable loss.

If you are new in stock investment or have little knowledge, then you might have heard about Karvy Stock Broking. This particular brokerage house did a massive scam of 2800 crores. It reduces the trust of many future investors. The Karvy investors bear a massive loss due to this scam. The vital lesson we have learned here is "to follow the big names". It would help if you stuck with a big brokerage house providing these services with years of experience. They must have delivered a decent amount of profit to its wide users.

You may belong from any country, some big brokerage houses must be there. Do healthy research, talk to different experiences in esters, and then decide on a good brokerage house. In India, some big names include ICICI Direct, HDFC Securities, Axis securities. They have tied up with foreign brokerage houses. You can prefer any one of these. Some of the most famous apps are Groww, Upstox, and Angel Broking.


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How Much To Invest In Foreign Stocks?

This is one of the most asked questions. The direct answer of this amount varies with the brokerage house. Along with that, your investment amount also decides your transaction rate. You could see the compulsory transaction charges in almost every brokerage house. The transaction charges, at a minimum, can be from 5 US dollars to $15. At maximum, it can go up to $50 in the same cases. It depends upon the stock you choose from which country. You can invest in more than 18,000 stocks as per their presentation and explanation webinar and seminars. Better it would help if you compared all the charges and commissions of all the brokerage houses.

Another necessary charge that can be applied to cases of investment is the currency conversion rate. Depending on the company's stocks based on which country, the invested money needs to be converted according to the currency of the respective country. A small charge may be there by the respective banks for the currency conversion. Some mobile apps also provide investment services with similar, maybe lesser charges, and some have zero transaction charges. The services which provide zero transaction charges will ultimately cut some commissions from the investment returns.


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Taxation On Foreign Stocks Investment?

If you're gaining some capital gain, then taxation is no doubt terminology. You must be paying taxes to the respective country's government, according to Indian taxation rules. Whatever investment you are going to do that will be according to the debt fund taxation. The fund withdrawal is divided into 2 set periods.

  • Short-term capital gain
  • Long-term capital gain

The taxes will vary with your withdrawal period.

One is the short-term capital gain which is a period of fewer than 3 years. If within your investment period you withdraw your amount before 3 years, then taxation will be according to your tax slab. According to the 2nd withdrawal rate, if you withdraw your amount after 3 years, the taxation will be 20 percent with indexation benefits. This will be your long-term capital gain. One important thing you should consider is that if you're gaining some dividends in such cases, it will be added to your normal income. You have to pay tax for it; it will be more complex in such cases. You need the required documents to show the government for significant clarifications.


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Conclusion

These were the most prominent ways to invest in the foreign stock market and extract your money from it. But with the international market, the probability of risk rises too and that, in turn, raises the chance of heavy loss if the Sensex crashes. Keeping the risks aside, the above three ways are the easiest ways to access the International market from India without mobilizing. The ways are all legit and can serve the right person with the tastiest profits.

To make more significant profits from foreign stocks, one must, in the first place, do a complete analysis of how the market there is and what can be the possible pros and cons of investing in their market. The amount of profit from the share market always lies on how good a person can foresight the market value keeping in mind all the current affairs. That's the best way to make profits from the equity market.

FAQs

Can we invest in foreign stock markets from India?

Yes, we can invest in foreign stock markets from India.

How much can we invest in foreign stocks from India?

As per the RBI notification in the Liberalised Remittance Scheme (LRS), an Indian resident individual can only invest up to $250,000 in foreign stocks per year.

Yes, Stock trading is legal in India. Securities and Exchange Board of India (SEBI) manages the rules, regulation and supervision of the stock markets in India.

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