- NRI can open DMat and trading account through physical application process.
- NRI can trade only in delivery based transactions
- NRIs/PIOs are allowed to invest in shares of listed Indian companies through recognized Stock Exchanges under the Portfolio Investment Scheme (PIS). It is mandatory to open a PIS (Portfolio Investment Scheme) account through any of RBI’s designated banks for trading in secondary markets/stock exchanges.
- Portfolio Investment Scheme (PIS) is a scheme of the Reserve Bank of India (RBI) defined in Schedule 3 of Foreign Exchange Management Act 2000 under which the ‘Non Resident Indians (NRIs)’ and ‘Person of Indian Origin (PIOs)’ can purchase and sell shares and convertible debentures of Indian Companies on a recognized stock exchange in India by routing all such purchase/sale transactions through their account held with a Designated Bank Branch.
- The account holder can trade online and offline on both NSE (National Stock Exchange of India Limited) & BSE (Bombay Stock Exchange) on repatriable & non-repatriable basis within the overall framework of statutory regulations and guidelines
- For all the Indian companies or companies listed on Indian stock exchanges, there are certain limits which have to be monitored under FEMA regulations. For any company the foreign investment into that company cannot cross certain limit. This limit is different from company to company and sector to sector. Also individually any NRI or a PIO cannot invest more than 5% in any Indian company.
How to Open a Demat Account for NRIs (Non-Resident Indians)
A Demat (Dematerialized) Account is essential for NRIs who want to invest in Indian stock markets. Here’s a step-by-step guide on how to open one:
NRIs need to open a Demat Account with a SEBI-registered Depository Participant (DP), such as:
- Banks
- Brokerage Firms (Mastertrust)
- Financial Institutions
Make sure your chosen DP offers NRI Demat services and supports repatriable or non-repatriable investments.
Before opening a Demat account, you must have:
- NRE (Non-Resident External) Account – For repatriable investments (funds can be transferred abroad).
- NRO (Non-Resident Ordinary) Account – For non-repatriable investments (funds stay in India).
Choose the right account based on your financial goals.
NRIs need to open a Trading Account with a registered broker. This account is linked to the Demat Account and your NRI bank account.
For trading in Equity, an NRI needs a Portfolio Investment Scheme (PIS) approval from the Reserve Bank of India (RBI), which most banks assist with.
For Mutual Funds, PIS approval is NOT required.
To open a Demat & Trading Account, submit:
✅ PAN Card (Mandatory for all financial transactions in India)
✅ Passport & Visa Copy (For identification and nationality proof)
✅ Overseas Address Proof (Utility bill, rental agreement, bank statement, etc.)
✅ Indian Address Proof (If applicable)
✅ NRE/NRO Bank Account Details (Cancelled cheque)
✅ FATCA Declaration (Foreign Account Tax Compliance Act)
✅ PIS Permission Letter (For equity investments)
All documents must be self-attested and notarized by an Indian embassy or authorized bank.
Many brokers require an IPV via a video call or physical verification to confirm identity.
Once verified, your Demat Account will be linked to:
- Trading Account (for buying/selling stocks)
- NRE/NRO Bank Account (for fund transfers)
- PIS Account (for equity trading, if applicable)
After successful activation, you can trade stocks, invest in mutual funds, bonds, IPOs, ETFs, and more in the Indian stock market.
📌 Important Note:
- NRIs can only trade in the secondary market (stocks already listed on stock exchanges).
- Derivative trading (F&O) requires a separate Custodial Participant (CP) Code from SEBI-registered clearing members.
- Intraday trading & short-selling are not allowed for NRIs.
Conclusion
Opening a Demat Account as an NRI is easy with the right approach. Select a reliable DP, complete the documentation, and start your investment journey in India. If you need assistance, most banks and brokerage firms offer dedicated NRI investment services to simplify the process.