How to Buy Mutual Funds in India as an NRI (2026 Guide)

Last month, Ravi from Dubai messaged us on our WhatsApp community: "I've been trying to invest in Indian mutual funds for three weeks. Downloaded four apps. Started KYC on two. Got rejected on one. I'm lost."

His frustration is common. We hear this almost daily at Belong.

NRIs face unique challenges that resident Indians never encounter. Most investment apps designed for Indian residents simply don't work abroad. Some reject you during KYC. Others accept your application but freeze your account later.

This guide will save you weeks of trial and error. By the end, you'll know exactly how to buy mutual funds from the UAE, UK, US, Singapore, or anywhere else. No jargon. No confusion. Just a clear path from zero to your first investment.

Can NRIs Buy Mutual Funds in India?

Yes. NRIs, OCIs (Overseas Citizens of India), and PIOs (Persons of Indian Origin) can legally invest in Indian mutual funds.

This is governed by the Foreign Exchange Management Act (FEMA) and SEBI regulations. You can invest in equity funds, debt funds, hybrid funds, ELSS (tax-saving funds), and even sectoral or thematic funds.

But there's a catch: you cannot invest in foreign currency.

All investments must be made in Indian Rupees (INR) through an NRE or NRO account. You cannot wire money directly from your UAE bank account to a mutual fund house.

👉 Tip: Before you start, check if your country has any restrictions. US and Canada NRIs face FATCA compliance issues that limit their AMC choices.

What You Need Before Buying

Think of this as your checklist. Without these four things, you cannot buy a single unit of any mutual fund in India.

1. NRE or NRO Bank Account

This is non-negotiable. Regular resident savings accounts don't work for NRIs.

If you're investing your UAE salary and want flexibility to bring money back, choose NRE. If you're investing rental income from Indian property, use NRO.

Most banks with NRI services offer online account opening. HDFC, ICICI, SBI, and Axis have dedicated NRI portals.

Learn more: NRE vs NRO vs FCNR: Which Account to Choose

2. PAN Card

A Permanent Account Number is mandatory for all financial transactions in India, including mutual fund investments.

If you don't have one, apply through NSDL or UTIITSL. Processing takes 15-20 days. Some platforms like Belong also help NRIs get their PAN card.

Already have a PAN from when you lived in India? Make sure it's linked to your Aadhaar and updated with your NRI status.

👉 Tip: Your PAN card name must exactly match your passport name. Even a minor mismatch (Rajesh vs Rajesh Kumar) can cause KYC rejection.

3. KYC Compliance

KYC stands for Know Your Customer. It's a one-time verification process mandated by SEBI.

Here's the good news: KYC is centralized. Once you complete it with one AMC or platform, you don't need to repeat it with others. Your KYC data is stored with KRAs (KYC Registration Agencies) like CVL, CAMS, KFintech, and NDML.

We'll cover the full KYC process in detail below.

4. FATCA/CRS Declaration

If you live outside India, you must declare your tax residency under FATCA (Foreign Account Tax Compliance Act) and CRS (Common Reporting Standard).

This is a simple self-declaration form. It tells Indian authorities where you pay taxes. For UAE residents, this is straightforward since UAE has no income tax.

The FATCA declaration is usually part of the KYC form. You don't need to fill separate paperwork.

Step-by-Step: How to Buy Your First Mutual Fund

Now let's get to the actual buying process. Here's exactly what you need to do.

Step 1: Open an NRE/NRO Account

If you already have one, skip to Step 2.

If not, choose a bank with good NRI services. Here's what to look for:

• Online account opening from abroad
• Video KYC option
• Reasonable forex conversion rates
• Good mobile app for international transactions

Top choices: HDFC NRI Account, ICICI NRI Account, Axis NRI Account

Processing time: 5-15 business days depending on the bank.

Step 2: Get Your PAN Card

Apply online if you don't have one. You'll need:

• Passport copy
• Overseas address proof
• Passport-size photograph

Cost: Around ₹107 for online applications. Delivery to overseas address costs extra.

Read more: PAN Card for NRIs: Complete Guide

Step 3: Complete Your KYC

This is where most NRIs get stuck. Let's break it down.

Documents Required:

• Valid passport (pages with photo, address, and visa)
• PAN card
• Overseas address proof (utility bill, bank statement, or driving license from your country of residence)
• Passport-size photograph
• Cancelled cheque or bank statement of NRE/NRO account
• FATCA/CRS self-declaration

Two Ways to Complete KYC:

Option A: Online (Video KYC)

Most platforms now offer video KYC. Here's how it works:

1. Visit CVL KRA (cvlkra.com) or your chosen platform
2. Fill the online KYC form
3. Upload scanned documents
4. Complete In-Person Verification (IPV) via video call
5. Wait for approval (7-10 business days)

Platforms like Kuvera, Zerodha Coin, and INDmoney offer seamless online KYC for NRIs.

Option B: Offline (Physical Forms)

1. Download KYC form from CAMS or KFintech
2. Fill and sign all pages
3. Get documents attested by Indian Embassy/Consulate, Notary Public, or authorized bank official
4. Courier to the KRA's registered address

Processing time: 10-15 business days after receipt.

👉 Tip: If you're visiting India, complete your KYC in person at any CAMS or KFintech office. It's faster and eliminates attestation requirements.

Step 4: Choose Your Investment Platform

You have three options:

1. Direct AMC Websites

Go directly to the mutual fund house's website. Examples:

• HDFC Mutual Fund
• ICICI Prudential
• SBI Mutual Fund

Pros: No intermediary, direct plans with lower expense ratios Cons: Each AMC requires separate registration

2. Bank-Linked Platforms

If you have an NRI account with HDFC, ICICI, or Axis, their wealth management arms offer mutual fund services.

Pros: Integrated with your bank account, single dashboard Cons: May push regular plans (higher expense ratio), limited fund selection

3. Independent Aggregator Platforms

These let you invest across multiple AMCs from one place:

• Kuvera
• Zerodha Coin
• Groww
• INDmoney

Pros: Wide fund selection, unified portfolio view, usually direct plans Cons: Some don't accept NRIs from all countries

See our detailed comparison: Best Investment Platforms for NRIs

Step 5: Fund Your Account

Transfer money from your UAE/UK/US bank to your NRE or NRO account.

For NRE accounts, use:

• Wire transfer (SWIFT)
• Remittance services (Wise, Remitly, UAE Exchange)

Compare rates before transferring. A 0.5% difference on a ₹10 lakh transfer is ₹5,000.

Learn more: Best Ways to Send Money from UAE to India

Step 6: Select Your Mutual Fund

Now comes the exciting part. Based on your goals, choose:

We recommend starting with a diversified fund like a flexi-cap or large-cap index fund if you're new to mutual fund investing.

Explore options: Best Mutual Funds for NRIs

Step 7: Place Your Order

Two ways to invest:

Lump Sum: Invest a large amount at once. Good when markets are low or you have idle cash.

SIP (Systematic Investment Plan): Invest fixed amount monthly. Better for disciplined, long-term investing. Reduces market timing risk.

Read our comparison: SIP vs Lump Sum: Which is Better for NRIs

To place an order:

1. Log into your platform
2. Search for the fund
3. Choose Growth (reinvest profits) or IDCW (dividends paid out)
4. Enter amount
5. Confirm payment from NRE/NRO account

Units are typically allotted within 2-3 business days at the applicable NAV.

Setting Up a SIP: The Auto-Debit Process

SIPs are the smartest way for NRIs to invest. Here's how to set one up:

Bank Mandate Registration

A mandate authorizes your bank to auto-debit a fixed amount on a specific date each month.

Process:

1. Choose your SIP amount and date (1st, 5th, 10th, etc.)
2. Select your NRE/NRO account for auto-debit
3. Complete e-mandate registration (UPI or NACH)
4. First SIP typically debits manually, subsequent ones are automatic

Processing Time:

• UPI autopay: Instant setup
• NACH mandate: 3-5 business days for registration

👉 Tip: Choose a SIP date that's 3-4 days after your salary credit. This ensures sufficient balance and avoids failed debits.

Minimum SIP Amounts

Most AMCs allow SIPs starting at ₹500 per month. Some large-cap and index funds have minimums as low as ₹100.

According to AMFI data, SIP accounts crossed 10.5 crore in September 2025 with monthly inflows exceeding ₹29,000 crore. NRIs contribute a growing share of this flow.

Buying Process for US and Canada NRIs

If you're based in the United States or Canada, your process is slightly different.

Why the Restrictions?

FATCA (Foreign Account Tax Compliance Act) requires Indian financial institutions to report US persons' accounts to the IRS. This compliance burden has led many AMCs to reject US/Canada NRI investments entirely.

AMCs That Accept US/Canada NRIs

As of 2025, approximately 20-25 AMCs accept investments from US/Canada NRIs. Here's the current status:

Online Access (No India Visit Required):

• UTI Mutual Fund
• Nippon India Mutual Fund
• Aditya Birla Sun Life
• PPFAS Mutual Fund
• L\&T Mutual Fund
• Sundaram Mutual Fund

Physical Presence in India Required:

• HDFC Mutual Fund
• ICICI Prudential
• SBI Mutual Fund
• DSP Mutual Fund
• Edelweiss Mutual Fund

US-Only (Not Canada):

• Bajaj Finserv Mutual Fund
• Bandhan Mutual Fund

Source: Zerodha Z-Connect

👉 Tip: Policies change frequently. Always verify with the AMC directly before starting your application.

PFIC Tax Implications for US NRIs

For US-based NRIs, Indian mutual funds are classified as PFICs (Passive Foreign Investment Companies) under IRS rules. This has complex tax implications:

• Mark-to-market accounting required
• Higher tax rates on gains
• Form 8621 filing mandatory

Many US NRIs avoid Indian mutual funds altogether due to PFIC complexity and instead invest in:

• Indian stocks directly (not PFICs)
• GIFT City mutual funds (simpler structure)
• US-listed India ETFs

Consult a cross-border tax advisor before investing.

The Power of Attorney (PoA) Route

Don't want to handle investments yourself? You can appoint a trusted person in India to manage your mutual fund portfolio.

How PoA Works

1. Create a Power of Attorney document specifying mutual fund transaction rights
2. Get it notarized and attested by Indian Embassy/Consulate
3. Both you and the PoA holder sign KYC documents
4. PoA holder can then buy, sell, and switch funds on your behalf

Who Should Use PoA?

• NRIs who prefer offline transactions
• Those uncomfortable with online platforms
• US/Canada NRIs who need physical presence for certain AMCs

Risks to Consider

• PoA holder has transaction authority
• Regular monitoring recommended
• Revoke PoA if relationship changes

We generally recommend using online platforms if possible. They give you direct control and transaction visibility.

Direct vs Regular Plans: Which to Choose?

Every mutual fund scheme has two variants:

Direct Plan: You invest directly with the AMC. No distributor commission. Lower expense ratio.

Regular Plan: You invest through a distributor (bank, advisor, broker). Higher expense ratio includes distributor commission.

The Cost Difference

The difference compounds significantly over time. On a 20-year SIP of ₹25,000/month, choosing direct over regular can mean ₹15-20 lakh more in your pocket.

👉 Tip: Always choose Direct plans unless you need hand-holding from an advisor. Platforms like Kuvera, Zerodha Coin, and Belong offer only direct plans.

How Mutual Fund Transactions Work

Understanding the mechanics helps you plan better.

NAV and Cut-Off Times

NAV (Net Asset Value) is the price per unit of a mutual fund. It's calculated at the end of each trading day.

Cut-off times for equity funds:

• Order placed before 3:00 PM IST: Same day NAV
• Order placed after 3:00 PM IST: Next business day NAV

For liquid and overnight funds:

• Cut-off is typically 1:30 PM IST

Settlement Timeline

T = Transaction day

Tracking Your Investments

After your first purchase, you'll receive:

• Folio number (unique account number with each AMC)
• Transaction confirmation via email
• CAS (Consolidated Account Statement) from CAMS/KFintech monthly

You can also check holdings on:

• MFCentral (mfcentral.com)
• Individual AMC websites
• Your investment platform

How to Redeem (Sell) Your Mutual Funds

Selling is straightforward:

1. Log into your platform/AMC website
2. Go to portfolio/holdings
3. Select the fund to redeem
4. Enter units or amount to sell
5. Confirm the transaction

Where Does the Money Go?

• NRE account investment → Redemption to NRE or NRO account
• NRO account investment → Redemption only to NRO account

TDS Deduction:

AMCs deduct TDS (Tax Deducted at Source) before crediting redemption proceeds:

You can claim refund of excess TDS when filing your ITR in India.

Common Mistakes NRIs Make

We've seen these errors hundreds of times. Avoid them:

1. Not Updating NRI Status

If you became an NRI after opening mutual fund accounts, you must:

• Convert savings account to NRO
• Update KYC with new status and overseas address
• Inform all AMCs about status change

Failure to update violates FEMA regulations. Penalties can be ₹1.5-2 lakhs plus up to 3x the transaction amount.

2. Using Resident Savings Account

You cannot invest through a regular savings account after becoming an NRI. All transactions must go through NRE/NRO accounts.

3. Ignoring Tax Implications

Mutual fund gains are taxable in India. TDS is deducted at source. If you don't file ITR, you forfeit refund claims.

Read: Taxation of Mutual Funds for NRIs

4. Chasing Past Returns

A fund that gave 40% last year won't necessarily repeat. Look at:

• 5-year and 10-year returns
• Risk-adjusted returns (Sharpe ratio)
• Fund manager track record
• Expense ratio

5. Not Checking FATCA Compliance

US/Canada NRIs who invest with non-compliant AMCs face regulatory issues later. Always verify before investing.

6. Missing KYC Updates

SEBI requires KYC to be "Validated" status by April 2026. Check your status at CVL KRA and update if needed.

The GIFT City Alternative

If you want to avoid rupee conversion, TDS complications, and currency risk, consider GIFT City mutual funds.

What's Different?

Who Should Consider GIFT City?

• UAE/GCC NRIs wanting tax-free returns
• Those worried about rupee depreciation
• NRIs planning to keep wealth in USD
• US NRIs seeking simpler tax treatment (no PFIC)

Explore GIFT City Mutual Funds on Belong. We offer funds like DSP Global Equity Fund and Tata India Dynamic Equity Fund with minimum investment of just $500.

Quick 7-Day Action Plan

Here's how to go from zero to invested in one week:

Day 1-2: Open NRE/NRO account if you don't have one. Apply for PAN card if needed.

Day 3-4: Complete KYC online through your chosen platform.

Day 5: Transfer funds from UAE to your NRE/NRO account.

Day 6: Research and shortlist 2-3 funds based on your goals.

Day 7: Make your first investment. Even ₹5,000 is a start.

The best time to start was 10 years ago. The second-best time is today.

What's Next?

Buying mutual funds as an NRI isn't complicated once you understand the process. The key steps are:

1. Open NRE/NRO account
2. Get PAN card
3. Complete KYC
4. Choose platform and funds
5. Start investing

If you want to avoid the TDS headache and currency risk, explore GIFT City investments. They're designed specifically for NRIs who want tax-efficient, USD-denominated exposure to Indian markets.

Join our community of NRIs making smarter financial decisions. Ask questions, share experiences, and get answers from fellow NRIs and our team of experts.

Join Belong WhatsApp Community

Download Belong App

Sources

1. Reserve Bank of India - FEMA Guidelines: rbi.org.in
2. SEBI - Mutual Fund Regulations: sebi.gov.in
3. AMFI - Monthly SIP Data: amfiindia.com
4. Income Tax Department - NRI Taxation: incometaxindia.gov.in
5. CVL KRA - KYC Portal: cvlkra.com
6. ICICI Bank NRI Banking: icicibank.com
7. Zerodha - US/Canada NRI Guide: zerodha.com

Disclaimer: This article is for informational purposes only and should not be considered as financial advice. Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully before investing. Consult a qualified financial advisor for personalized guidance.