How to Invest in Facebook, Google, Amazon, Apple, Microsoft Stocks from India?
Investing in top US stocks has become straightforward for individuals in India owing to various brokerage firms and the rise of online investment platforms.
Here, we’ll be providing you with a detailed guide on how to invest in shares of leading US-based companies without any hassle.
How to Buy Amazon, Facebook, Apple Shares?
There are two ways that individuals can consider if they’re looking to park funds in the US equity market. Let’s take a look at them.
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Direct Investment
Through Domestic Brokers
Individuals can invest directly in stocks, such as Apple, Microsoft and Google, by opening an overseas trading account with a brokerage firm based in India.
That said, it is crucial for one to note that there might be certain limitations in relation to the services offered by the domestic brokerage firm. For example, there might be restrictions regarding the number of buy or sell orders you can place.
Various Indian brokerage firms work with stockbroking companies in the US. These companies act as intermediaries and assist in executing these trades. You can open an overseas trading account with any such domestic brokerage firm to invest in US stocks.
Through Foreign Brokers
Alternatively, individuals residing in India may consider opening a trading account with a foreign stockbroking company that operates in India. Once they open the account successfully, they can invest in shares of the leading companies in the US. That said, before opening such an account, make sure that you’re aware of all the associated costs.
For individuals who are wondering how buy US stocks in India, the process has become less intricate than before. National Stock Exchange Ltd. (NSE) revealed that individuals can trade in shares of certain companies in the US via its subsidiary, NSE IFSC.
Individuals can start investing in US stocks on the NSE IFSC platform by following the steps mentioned below:
Step 1: Open a trading account with a stockbroker registered with NSE IFSC. You can do this conveniently by availing of online services offered by the brokerage firm.
Step 2: Complete the KYC process by submitting the necessary documents, for example, your PAN and Aadhaar Card.
Step 3: Once you’ve successfully opened the account, add funds to your account to purchase the stocks you wish to, and add them to your portfolio. Note that the regulations allow you to use the funds for derivative trading or for speculation purposes.
Step 4: You can invest in any of the best US-based companies, such as Microsoft, Amazon or Facebook, after opening an account. However, remember that this arrangement allows fractional investing. In other words, you can have fractional ownership of any US stock.
Apart from this, investors may consider the indirect way of investing in US stock investing.
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Indirect Investment
Various mutual funds in India allow individuals to invest in the US equity market indirectly. This is a cost-effective way of investing in shares of Apple, Amazon and Google. This is because investors do not need to open a trading account or pay an amount as a deposit.
Individuals can also consider investing in US Exchange Traded Funds (ETFs) via domestic or foreign brokers. Alternatively, they may purchase units of any of the Indian ETFs that track US stock market indices.
Important Tips Before You Go for US Stocks Investment
Make sure to keep these things in mind before buying US stocks from India:
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RBI Regulations
When investing in the US equity market, individuals must make sure that they strictly adhere to the rules and regulations of the Central Bank of India.
As per RBI norms, Indian investors cannot remit more than $2.5 lakh in a financial year. Furthermore, investors must ensure to complete the documentation for the Liberalised Remittance Scheme (LRS) successfully.
You may also want to know Everything You Need to Know About 20% TCS on Foreign Remittance Transactions under LRS
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Transact in USD
To buy shares of Apple, Google and other top US companies from India, one needs to transact in dollars. Indian investors cannot purchase shares of these companies with Indian Rupees. As an Indian, you must buy US dollars from authorised currency exchange points in India.
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Foreign Exchange Rates
When transferring Indian Rupees from your bank account in India to a trading account in the US, one must take the exchange rate into account.
Various international brokerage firms have collaborations with top nationalised banks to help Indian investors get favourable foreign exchange rates.
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Fractional Shares
Indian investors have the option to buy fractional shares of US-based companies besides buying in whole numbers. In other words, you may buy 1.5 shares of Amazon or a single share.
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Tax on Dividends
Similar to Indian stocks, US stocks offer dividends to shareholders. A tax rate of 25% is applicable on such income. Thus, let’s say a company announces a dividend of $200. Your net dividend income will be $150.
Nevertheless, the dividend you receive in cash or choose to reinvest is taxed in India as per the income tax slab rate that is applicable. That said, note that the tax retained in the US can be set off against the tax to be paid in India.
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Capital Gains Tax
LTCG tax of 20% is applicable on the returns earned from the sale of shares post-completion of 2 years from the date of purchase. However, if you sell a stock in less than 2 years, the returns earned are taxed as per your income tax slab rate.
Also Read FAANG Stocks: A Look at Their Performance in the Last Decade
The Bottom Line
Now that you know how to invest in US stocks, you can fulfil your dream of owning shares of Apple and Google today. However, before allocating your funds, make sure to consider various essential aspects, which include your investment objective and risk appetite.
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5 Things to Keep in Mind Before Investing in US Stocks |
Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.