1. According to US capital market regulator Securities and Exchange Commission (SEC), only US registered and regulated schemes can solicit money from US investors.
2. This rule pertains to everyone who resides in the US - US citizens or NRIs or green card holders.
3. However, if they were physically present in India or Indian territory, they could invest in mutual funds that are registered in India arter signing a declaration that they have invested on their own accord and the Indian fund houses did not solicit money from them.
4. But since self-declaration proved to be unworkable, US government enacted the Foreign Account Tax Compliance Act (Fatca) in 2010 and signed an agreement with more than 50 countries, India being one of them, which means any financial institution, like banks, fund houses, insurance companies, that get investments from anyone residing in the US (even if temporarily living in one of these countries at the time) is supposed to furnish such investment details to the US.
9. US-based NRIs can also utilize their US income, by gifting (remitting) it to their Resident Indian (RI) parents / children / HUF, who can then invest it in Indian MFs in their own names.
2. This rule pertains to everyone who resides in the US - US citizens or NRIs or green card holders.
3. However, if they were physically present in India or Indian territory, they could invest in mutual funds that are registered in India arter signing a declaration that they have invested on their own accord and the Indian fund houses did not solicit money from them.
4. But since self-declaration proved to be unworkable, US government enacted the Foreign Account Tax Compliance Act (Fatca) in 2010 and signed an agreement with more than 50 countries, India being one of them, which means any financial institution, like banks, fund houses, insurance companies, that get investments from anyone residing in the US (even if temporarily living in one of these countries at the time) is supposed to furnish such investment details to the US.
5. If the firms refuse to cooperate, the Act allows the US government to deduct 30% tax from these companies if they are already registered or doing business in the US.
6. Although both laws are not directly related, they are aimed at investor protection and investor disclosure.
7. However, US-based NRIs can still invest in India-focused offshore MFs / ETFs operating in USA, in US dollars, and earnings on them are tax-free in India.
8. These funds invest in a basket of Indian companies, usually with the help of research inputs from their Indian subsidiaries or other Indian fund houses.9. US-based NRIs can also utilize their US income, by gifting (remitting) it to their Resident Indian (RI) parents / children / HUF, who can then invest it in Indian MFs in their own names.
10. In this way, they can help them to build a corpus for their own retirement / education / other goals, besides availing tax benefits as individuals too.