A Quick Guide on how to invest in Foreign Stocks from India: Apple, Google (Alphabet), Intel, Facebook (Meta Now), Amazon, Netflix, Microsoft, Samsung, Tesla, Twitter… These are some well-known companies in the world. We all have grown up using the products/services offered by these companies.
Moreover, these companies are global leaders in their respective businesses, as well as innovators, who are likely to benefit in the future. But along with using their products, can we also own some shares of these companies?
Wait, these are not Indian companies, right? Therefore, they won’t be listed on the Indian stock exchanges. Even if you have a Demat and trading account in India, you can trade/invest only in companies listed on Indian stock exchanges (BSE/NSE).
But these companies will be listed in their respective country’s stock exchanges like US stock exchanges. Then, how to buy shares of a company that are not registered in India, but trades in the foreign stock exchanges?
Don’t worry, if you really want to buy these stocks- you’ll get it. In this post, we are going to discuss three simple ways through which you can invest in foreign stocks. Let’s get started.
Table of Contents
Why should you invest in foreign stocks?
Before we start this post, let us first discuss why should you invest in foreign stocks? Are they better than Indian companies? Here, you need to make up your mind why you want to invest in foreign companies.
There are over 5,500 listed companies in the Indian stock market. Aren’t they enough? Why do you need to invest in alternative stocks? Further, which one is better to invest in- Indian companies or foreign companies?
Well, We are not really in a position to answer the second question. It won’t do justice if a guy in his 20s sitting on the comfort of his couch judges these Indian vs MNC companies and choose which one is better.
These are giant multi-billionaire companies that we are talking about here. Google, Apple, Facebook, Amazon, Samsung, Cisco, Tesla, etc are too big companies to comment upon. These companies have lots of cash, highly qualified professionals, employees in their management team and they are big innovators in their industry.
Anyway, there are even many big Indian companies that can give competitions to many foreign companies. Now, let us answer the first question i.e. why invest in foreign stocks. Here are my personal learnings on this question.
Top reasons why many Indian invests in the US
Here are my top reasons why many Indians invests in the US or other foreign stock exchanges:
1. People want to invest in their favorite companies
Apple, Google, Twitter, Facebook, Amazon, Tesla, etc. are the darlings of this generation. And of course, many people want to invest in these companies.
2. Diversification with Global Investments
Investing in foreign stocks helps in diversification. Let’s assume that the Indian equity market starts falling due to some local region. However, investing in foreign stocks can mitigate the risk in your portfolio as the local reason may not have a significant effect on the international markets.
3. To seize bigger opportunities
Once you start to invest in foreign stocks, there are no boundaries anymore. You can hunt for better (profitable) opportunities in the international markets.
Besides the above-mentioned points, few investors believe that foreign companies have better resources, facilities, government cooperation, and standards. That’s why they invest in these foreign companies, compared to Indian companies.
Nevertheless, while deciding to invest in foreign stocks, you should also remember that India is one of the fastest-growing economies in the world. On the other hand, most of the international markets are a little saturated. Therefore, growth-wise, India has better potential.
Overall, it totally depends on your preference regarding where and how much to invest. As already discussed, there are both pros and cons to trade in international stocks.
Cons of Investing in Foreign Stocks
There are two sides to every coin. Here are a few critical points to know before you invest in foreign stocks:
1. Be ready for the high charges
While investing in international stocks, you’ll be transacting in foreign currencies. For example, if you are trading in the US stock market, you have to pay the brokerages in the US dollar.
And hence, the stock brokerages may be a little higher compared to the charges in the Indian stock market. Similarly, the annual/monthly maintenance charges may also be higher compared to domestic accounts.
2. Profits are subjected to the currency exchange rate
When you invest in foreign stocks, there’s always currency risk involved. Let us understand this with the help of an example.
Let’s assume that you are investing in the US stock market. When you bought the US stock, the currency exchange rate was $1= Rs 68. However, next year- when you sold the US stock, let say the Indian currency got stronger, and the currency exchange rate becomes $1 = Rs 62.
In such a case, you have already lost 8.8% due to the change in the exchange rate. That’s why when you invest in foreign stocks, profits are always subjected to the currency exchange rate.
3. Up to $250,000 can be invested overseas by the Indian residents
As per the RBI notification in the Liberalised Remittance Scheme (LRS), an Indian resident individual can only invest up to $250,000 overseas per year. With the current exchange rate of ($1= Rs 68), this amount turns out to be over 1.7 Crores. Anyways, if you have a family of four, you can invest 4 x $250,000 = $ 1 Million. That’s enough money to invest, right?
Quick Note: Besides the above factors, you also need to keep in mind the foreign stock risks. As these stocks will be listed on foreign stock exchanges – the environment and the factors (like local government policies, local trends, etc) will affect the share price of those companies.
How to invest in foreign stocks?
Now that you have learned the basic concept of investing in the international stock exchanges, here are three simple ways to invest in foreign stocks—
1. An account with Indian Brokers having a tie-up with a foreign broker
Many full-service Indian brokers like ICICI Direct, HDFC Securities, Kotak Sec, Axis Securities, Reliance money, etc has a tie-up with the foreign brokers. They have made it very simple to open your overseas trading account with their partner (foreign) brokers. You can invest in foreign stocks using these full-service brokers.
For example, if you have an account with ICICI direct, you can invest in global markets using their broker partner Interactive Brokers LLC.
(Source: ICICI Direct)
2. Open an account with the foreign brokers
A few international brokerage firms like Interactive Brokers,TD Ameritrade,Charles Schwab International Account, etc permit Indian citizens to set up an account and trade in US stocks, mutual funds, etc.
In fact, US-based brokerage like ‘Interactive brokers’ also has an office in India where you can visit, get your queries answered, and open your overseas trading account.
3. Investing in Foreign stocks through new startups Apps
In the past few years, many new starts have been launched in India and abroad that helps Indians to invest in foreign stocks. For example, GROWW, Vested Finance, Webull app, etc help Indians to invest in US stocks.
Startups like Vested Finance are a US Securities and Exchange Commission (SEC) registered investment advisor. Similarly, you can also invest in foreign stocks using the Webull app, another popular startup company that is also committed to building the best investing and trading experience for India and Global stock markets.
Extra: Buying Indian MF/ETFs with global equities
There are a number of mutual funds/ETFs that invest in international markets (global market, emerging market, etc). You can invest in those mutual funds/ETFs to indirectly invest in foreign equities.
This is the easiest approach to invest in foreign stocks. An advantage of investing through mutual funds is that you won’t need to open any overseas trading account. Further, you won’t also require to invest a hefty amount.
Compared to direct investing in foreign stocks (where you might be asked to maintain a minimum of $10,000 deposit), investing in mutual funds/ETFs are cheap.
For example, Motilal Oswal recently started its subscription for its Motilal Oswal S&P 500 Index Fund. It is an open-ended scheme replicating the S&P 500 Index, which consists of leading 500 companies listed in the US. A few of the popular of popular mutual funds that trade in global equities are—
- ICICI Pru US Bluechip Equity – D (G)
- Motilal MOSt Oswal NASDAQ 100 ETF
- Reliance US Equity Opp. Fund DP (G)
- Edelweiss Greater China Eqty-Direct
- Kotak US Equity Fund – Direct (G)
Quick Note: Many other Indian stockbrokers are also planning to offer their clients a facility to invest in the US and foreign stocks. For example, Zerodha is planning to offer option to invest in US stocks with no minimum investment.
However, these features are yet to be launched. Nevertheless, these stockbrokers internally working on these features is a good sign for the Indian retail investors who are enthusiastic about investing in foreign companies.(Video) Gordon Ramsay Cooks Street Food In India | Gordon's Great Escape
FAQs on Investing in Foreign Stocks from India
1) Can I invest in foreign stocks from India?
Yes, you can invest in foreign stocks from India. Global companies like Apple, Amazon, Microsoft, Google, Tesla, etc are listed on the US/ foreign stock exchanges and Indians can legally buy foreign stocks.
According to the RBI’s Liberalized Remittance Scheme (LRS) guidelines, an Indian resident can annually send up to USD $250,000 abroad without seeking approval from the RBI. The LRS has made it easier for Indian residents to make investments in other countries.
2) What is the easiest way to invest in foreign stock?
You can invest in foreign stocks from India by opening an account with Indian brokers that allow investment in foreign stock or might have a tie-up with the foreign brokers. Else, you can directly open an account with foreign stockbrokers like Interactive Brokers,TD Ameritrade,Webull, Charles Schwab International Account, etc, and start investing in international stocks.
Another easy way to invest in foreign stocks is through the mutual fund’s route where investors can buy Indian mutual funds or ETFs with global equity holdings.
3) Can I own foreign stocks?
Yes, you can own foreign stocks. Instituted by the RBI, the Liberalized Remittance Scheme (LRS) is a set of policies that governs the maximum amount and purposes of remittance. Under the LRS, an Indian resident can annually send up to USD $250,000 abroad. In short, you can invest in international companies and own foreign stocks.
4) How can I invest in Nasdaq from India?
Nasdaq is an American Stock Exchange based in New York. Indians can invest in companies listed on Nasdaq from India. Nasdaq” also refers to theNasdaq Composite, an index of more than 3,000 stocks listed on the Nasdaq Exchangethat includes Apple, Google, Microsoft, Meta (formerly Facebook), Amazon, and Intel, and more. India investors can invest in Nasdaq from India.
5) Can you buy stocks listed in other countries?
Yes, you can buy stocks listed in other countries like the United States, South Korea, Australia, Japan, Europe, etc. There are thousands of stocks listed in other countries’ stock exchanges like Nasdaq, Tokyo stock exchange, Korea Exchange, Euronext, and more. Indian investors can buy stocks listed in other countries’ stock exchanges.
6) How to invest in international stocks from India?
You can invest in international stocks from India by opening an account with Indian brokers that allow investment in foreign stock or might have a tie-up with the foreign brokers, directly opening an account with foreign stockbrokers or through a global mutual funds route.
7) What are Foreign stock brokers in India?
A few top international brokerage firms that permit Indian citizens to set up an account and trade in US stocks areInteractive Brokers,TD Ameritrade,Charles Schwab International Account, Webull, etc. In addition, many Indian stockbrokers have a tie-up with foreign brokers to facilitate international investments like ICICI Direct, Kotak Securities, etc.
8) What is the taxation rate on foreign stocks?
While investing in foreign stocks, Long term capital gains arising from the sale of foreign stocks attract tax at the rate of 20% plus surcharge and health and education cess along with the benefit of indexation. On the other hand, Short-term capital gains arising from the sale of foreign shares are taxed at the slab rate applicable to taxpayers.
10) Can I do intraday trading for foreign stocks?
Several brokers and startup apps offer investment in foreign stocks from India. However, an intraday trading facility in most foreign stocks is not available due to regulatory requirements. To carry out your intraday trading, you will need an overseas trading account.
In this article, we discussed three easy ways to invest in foreign stocks from India, along with the fourth way of mutual funds route. We also covered the advantages and disadvantages of investing in foreign stocks.
Investing in the foreign market will help you widen your investment horizon. Here, you can invest without boundaries in your favorite companies. Moreover, in the era of the internet- it’s not much difficult to invest in the international market.
The most significant advantage is that it helps in diversifying your portfolio. However, the obstacles are higher expense charges and currency exchange rates.
That’s all for this article on different ways to invest in foreign stocks. Let us know what you think about investing in international stocks in the comment section below. Further, if you’ve got any questions on this topic, feel free to mention them below. Have a great day and Happy investing.
Kritesh (Tweet here) is the Founder & CEO of Trade Brains & FinGrad. He is an NSE Certified Equity Fundamental Analyst with +7 Years of Experience in Share Market Investing. Kritesh frequently writes about Share Market Investing and IPOs and publishes his personal insights on the market.
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- Buy individual stocks directly on international exchanges. To do this, however, your brokerage account must give you access to these exchanges—and not all brokerages do. ...
- Access international stocks via American Depository Receipts (ADRs). ...
- Invest internationally through ETFs and/or mutual funds.
- Here are 5 ways to invest in the US stock market.
- International brokerages. ...
- International mutual funds. ...
- Exchange-traded funds. ...
- NSE IFSC. ...
- India INX Global Access.
Investors can access foreign stocks via ADRs, GDRs, direct investing, mutual funds, ETFs, and MNCs.What are three ways that companies can invest in foreign countries? ›
There are three ways you can invest internationally: through mutual funds, American Depositary Receipts, or direct investments in foreign markets. Mutual funds are, by far, the easiest way to invest and offer a number of choices.How can I invest in foreign countries? ›
A simple way to invest internationally is through a mutual fund that holds foreign securities. You get the benefit of professional management and the option to choose from stock, bond or money market funds in several categories.How do I invest in foreign trade? ›
Foreign Bond Funds
- Nasdaq. "Forex Market Overview."
- CME Group. "FX futures and options."
- TIAA Bank. "New World Energy CD Basket."
If you're wondering, Can I Invest in the US Stock Market or how to invest in US stocks from India, the answer is, yes you easily can! There are two distinct ways of investing in the US stock market from India: Direct investment in stocks. Indirect investment in stocks via mutual funds or ETFs.How can I invest in Canada stocks from India? ›
You can invest in international stocks from India by opening an account with Indian brokers that allow investment in foreign stock or might have a tie-up with the foreign brokers, directly opening an account with foreign stockbrokers or through a global mutual funds route. 7) What are Foreign stock brokers in India?How can I invest in China from India? ›
One just needs to open a trading account with a broker who facilitates trading in foreign stocks and they can then invest directly in foreign stocks of their choice. Besides, one can also choose to invest in foreign exchange-traded funds (ETFs) tracking a particular index.What is the 3 stock method? ›
A three-fund portfolio is an approach to portfolio management that focuses on using three funds to invest in three asset types, typically U.S. stocks, international stocks, and bonds. This strategy is popular among the “Boglehead” community, who follow investing principles championed by Vanguard founder John Bogle. 1.
- Create a tailored investment plan.
- Invest at the right level of risk.
- Manage your plan.
- The Stock Market. The most common and arguably most beneficial place for an investor to put their money is into the stock market. ...
- Investment Bonds. Investment bonds are one of the lesser understood types of investments. ...
- Mutual Funds. ...
- Physical Commodities. ...
- Savings Accounts.
From pharmaceuticals to automobiles, textiles to railways, nearly every sector has received significant sums as foreign investment.
The three types of investment companies are mutual funds, closed-end funds, and unit investment trusts.Why should I invest in foreign stocks? ›
Despite that lackluster performance, you should probably be investing overseas anyway. The reason? Diversification, which refers to the investment strategy of owning a mix of different types of assets — stocks, bonds and more — to avoid the risk of being overly exposed to any single one.How can I invest in US stocks from India Zerodha? ›
No, presently investing in stocks listed in foreign stock exchanges is not possible through Zerodha. If you wish to invest in US stocks such as Apple, Google, Facebook, Amazon etc or just have some exposure to global markets then, international mutual funds is the easiest way.Which app is best for foreign investment? ›
- Groww. Groww is an online investing platform that allows users to trade in mutual funds and equities. ...
- Vested Finance. Vested Finance is a registered investment advisor with the Securities and Exchange Commission (SEC) in the United States. ...
How to Buy Japanese Stock
- Open a Trading Account. ...
- Fund your Trading Account. ...
- Start Trading.
Open a trading account: To invest in foreign stock market you need to open trading account with brokerage house that provide overseas trading facility. There are few popular brokerage houses that provide service for overseas trading: ICICI Direct , Kotak Securities, HDFC Securities, Reliance Money, etc.How can I buy international stocks from India Quora? ›
- IND Money is an app that helps you with all your investment needs. ...
- IND Money is a free app that makes it easy to invest in international stocks. ...
- IND Money is a mobile app that provides investors with easy and fast access to foreign stocks.
How to start?
- Decide the platforms you prefer and sign up.
- Find a deal that you want to invest in. Do your due-diligence.
- Fund the deal through your Winvesta MCA account.
If you want to buy shares, you must first approach a SEBI-registered member, or broker, of a stock exchange. You need to then register as an investor before you begin investing; to do so, follow these steps: Find a SEBI Registered Member : Click here. Find out which stock exchange they are registered with.How can I buy Dubai stock from India? ›
No matter where you are based, you can apply to trade both DFM and Nasdaq Dubai listed securities in a few simple steps. You will first need to Apply for a DFM Investor Number (NIN), you can receive one through our DFM mobile app, or through a DFM licensed brokerage.Can I invest in Dubai from India? ›
Can Indian nationals buy a property in Dubai? Yes, Indian nationals can buy property in Dubai.How can I invest in Apple in India? ›
AAPL is traded on the NSE IFSC and can be bought or sold between 9:15 a.m. and 3:30 p.m. IST Monday through Friday. However, NSE does have pre-hours and after-hours trading, which you may be able to access through your online brokerage.Is it easy to invest in China? ›
Investing in China is not always easy, but there is no other country that can replace it. Companies that ignore the market risk falling behind their competitors. Foreign investors in China have faced numerous challenges in recent years.Can I buy Hong Kong stocks from India? ›
Investors can also trade Hong Kong stocks by opening an account with a brokerage firm that offers an international trading platform.Is China cheaper in India? ›
India is 44.1% cheaper than China.What are the 4 types of stocks? ›
- Large Cap Stocks. ...
- Mid Cap Stocks. ...
- Small Cap Stocks. ...
- Preferred & common stocks. ...
- Hybrid Stocks. ...
- Stocks with embedded derivative options. ...
- Growth Stocks. ...
- Income Stocks.
- Growth investments. ...
- Shares. ...
- Property. ...
- Defensive investments. ...
- Cash. ...
- Fixed interest.
A fund is a pool of money set aside for a specific purpose. The pool of money in a fund is often invested and professionally managed in order to generate returns for its investors. Some common types of funds include pension funds, insurance funds, foundations, and endowments.What are the Top 5 Ways to invest? ›
- High-yield savings accounts.
- Certificates of deposit (CDs)
- Money market funds.
- Government bonds.
- Corporate bonds.
- Mutual funds.
- Index funds.
- Exchange-traded funds (ETFs)
- Establish a plan Current Section,
- Start saving today.
- Diversify your portfolio.
- Minimize fees.
- Protect against loss.
- Rebalance regularly.
- Ignore the noise.
For example, certificates of deposit (CDs), money market accounts, municipal bonds and Treasury Inflation-Protected Securities (TIPS) are among the safest types of investments.What is the best investment method? ›
Direct equity is considered as one of the best investment options for a long-term period. Even though most of the investors consider direct equity a high-risk investment options, the returns offered by direct equity funds are higher than any other investment options available in the market.What is the easiest and safest way to invest money? ›
- High-yield savings accounts. ...
- Series I savings bonds. ...
- Short-term certificates of deposit. ...
- Money market funds. ...
- Treasury bills, notes, bonds and TIPS. ...
- Corporate bonds. ...
- Dividend-paying stocks. ...
- Preferred stocks.
- Make savings a priority. Each time you're paid, put a portion of it toward savings. ...
- Automate your savings. Most financial institutions allow you to automatically transfer funds online or via mobile apps from checking to savings accounts.
- Find money to save. ...
- Keep the change. ...
- Cancel extra costs.
- 'Investing' is more than building rainy day savings.
- The potential for healthy long term returns.
- Beat inflation.
- Earn additional income.
There are three types of FDI in India: foreign portfolio investment (FPI), foreign institutional investment (FIIs) and automatic approval of applications from foreign companies under the automatic route.What is foreign investment class 10 very short answer? ›
Foreign investment is when a company or individual from one nation invests in assets or ownership stakes of a company based in another nation. As increased globalization in business has occurred, it's become very common for big companies to branch out and invest money in companies located in other countries.
The three most widely followed indexes in the U.S. are the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite.What are the 5 types of investors? ›
- Angel investors.
- Peer-to-peer lenders.
- Venture capitalists.
- Personal investors.
- Busy investors. The busy investors are interested—some might say obsessed—with the markets. ...
- Casual investors. The casual investors are the opposite of the busy investor. ...
- Cautious investors. ...
- Emotional investors. ...
- Informed investors. ...
- Technical investors.
Resident corporate entities and partnership firms registered under the Indian Partnership Act, 1932 are eligible to make investment abroad in Joint Ventures/ Wholly Owned Subsidiaries. Resident individuals may also invest abroad as detailed in Q. 3.Which broker is best for foreign investment? ›
- Best Online Broker for International Trading: Interactive Brokers.
- Best Online Broker for Non-U.S. Investors: Interactive Brokers.
- Best International Trading Platform for Beginners: Fidelity.
Yes, you can invest in foreign stocks from India. Global companies like Apple, Amazon, Microsoft, Google, Tesla, etc are listed on the US/ foreign stock exchanges and Indians can legally buy foreign stocks.In which app we can invest in foreign stocks? ›
GROWW, Vested Finance, and the Webull app, for example, are some of the best apps to assist Indians in investing in International stocks.How can I invest in UK stocks in India? ›
- Open a Demat Account with an Indian broker partnered with a foreign broker.
- Open an account with a foreign broker.
- Exchange-Traded Funds. You can buy US ETFs directly either through an Indian or an international broker. ...
- Mutual funds. ...
- New-age apps.
Indian retail investors can now trade select US stocks through NSE IFSC, which stands for NSE International Financial Services Centre. It is a wholly-owned subsidiary of the National Stock Exchange, NSE. The international exchange operates in the Gujarat International Finance Tech City, or the GIFT city.Who is the No 1 broker? ›
Fidelity Investments: Best Overall, Best Broker for ETFs, and Best Broker for Low Costs. Get $150 when you open a new, eligible Fidelity account with $50 or more.
ICICI Direct is the top most stock broker among all the brokers. ICICI Bank is followed by discount brokers like HDFC Securities, Sharekhan and Kotak Securities.How can I buy Russian stock from India? ›
You can invest in Russian stocks through mutual funds, ETFs, and ADRs that help you avoid the risks of direct investments. Before and during investing in Russian stocks, ensure you're familiar with the economic factors and conditions the country faces.Is Groww app safe? ›
Yes, the Groww app is safe and secure for mutual fund investments. Groww is a registered SEBI broker and, an AMFI registered mutual fund distributor. Hence all its transactions are constantly monitored and reviewed by SEBI, ruling out any foul play.How can I invest in Korean stocks from India? ›
Foreign investors who want to invest in the Korean securities market are required to register under their real names with the Financial Supervisory Service (FSS) to receive investment registration certificates. Application can be made either directly or through a standing proxy.Which app is best to buy US stocks from India? ›
INDmoney makes it easy for anyone wanting to start investing in US stocks from India. Our zero-cost structure allows you to start trading without any account opening fees or commission on buying and selling. It takes less than 3 minutes to open a US stocks account with INDmoney.