As an investment option, non-resident Indians (NRIs) often choose real estate. It is believed that investment in real estate across the globe creates a long-term value and act as a base to set up business in that region. However, there are several other investment options to create a higher alpha, generally ignored for legal, processes, or other reasons.
Before making a decision, it’s vital for NRIs first to understand their goal and risk profile. Likewise, investment instruments like MFs, equity markets, NRE deposits and more have their limitations. As the rules and regulations constantly amend, a close check is needed to avoid excess taxes, lock-in period, etc.
Real Estate
Though the real estate industry has been recording a constant boom, some rules should be considered to make it a profitable investment. Investing in this sector is profitable if you invest with a long-term horizon. Different rules are there for NRIs when it’s about investing in real estate, and these rules differ from country to country. In India, for instance, a buyer is supposed to deduct TDS during buying an immovable asset from an NRI and deposit it with the government.
Mutual Funds
Investment in mutual funds is an ideal vehicle for NRI investors because of several reasons. Mutual funds help build a well-diversified portfolio, tracking the value of the investment is easy, and it also provides liquidity. Based on the investment objective, expected returns and the risk profile, you, as an NRI, can invest in equity, balanced, debt, or liquid funds. You also have the option of investing in MFs via SIP.
Equity Market
The equity market mirrors a country’s economic growth and future growth potential. Investing in equities could be a great way of creating long-term wealth. If you are looking for investment opportunities, you can invest in emerging companies that pay a high dividend in the equity market.
