Goal: Diversify your portfolio by investing in global markets (US stocks, ETFs) while navigating regulations, taxes, and currency risks.

1. Why Invest Internationally?

• Diversification: Reduce reliance on Indian markets.
• Access to Global Giants: Invest in companies like Apple, Tesla, or Amazon.
• Currency Hedge: Benefit from USD/INR fluctuations.

2. Key Investment Avenues

1. Direct Stock Purchases (US Markets)

• Platforms:
  • Vested Finance: Direct access to US stocks/ETFs.
  • INDmoney: Fractional shares in US companies.
  • Interactive Brokers: Global brokerage (higher complexity).
• Steps:
  1. Complete KYC and submit W-8BEN form (for US tax compliance).
  2. Transfer INR via Liberalized Remittance Scheme (LRS) ($250,000/year limit).
  3. Pay 20% TCS (Tax Collected at Source) on remittances >₹7 lakh.
  4. Convert INR to USD and invest.

2. International Mutual Funds/ETFs

• Examples:
  • Motilal Oswal S&P 500 Index Fund: Tracks US large-cap stocks.
  • Invesco EQQQ NASDAQ-100 ETF: Focuses on US tech giants.
  • ICICI Prudential US Bluechip Equity Fund: Active US equity fund.
• Benefits: No LRS hassle; handled by AMCs.

3. Feeder Funds

• Invest in global funds via Indian mutual funds.
  • Axis Global Equity Fund of Funds: Invests in a global parent fund.
  • Edelweiss Greater China Equity Fund: Focuses on Asian markets.

3. Tax Implications

• Dividends: 25% withholding tax in the US; claim credit in India under the Double Taxation Avoidance Agreement (DTAA).
• Capital Gains:
  • Short-Term (STCG): Held <3 years → Taxed at income slab rate.
  • Long-Term (LTCG): Held ≥3 years → 20% with indexation.
• Estate Tax: US imposes up to 40% on assets >$60,000 for non-residents.

4. Currency Risk Management

• Hedged Funds: Opt for currency-hedged mutual funds (e.g., Aditya Birla SL US Equity Fund).
• Natural Hedge: Invest in export-heavy sectors (e.g., Indian IT stocks).

5. Steps to Start
6. Choose a Platform: Compare fees (forex, brokerage) on Vested, INDmoney, etc.
7. Transfer Funds: Use LRS via your bank (Form A2 required).
8. Invest:
   • Beginners: Start with US-focused mutual funds (e.g., Motilal Oswal S&P 500).
   • Advanced: Buy direct stocks (e.g., Google, Microsoft) or ETFs (NASDAQ-100).
9. Track & Rebalance: Monitor currency trends and global market shifts.

6. Risks to Consider

• Regulatory Changes: Shifts in LRS/TCS rules (e.g., 20% TCS post-July 2023).
• Market Volatility: US tech stocks can be highly volatile.
• Liquidity: Some ETFs may have low trading volumes in India.

7. Practical Examples

• Case 1: Invest ₹5L via Motilal Oswal S&P 500 (historical CAGR: 10-12%).
• Case 2: Buy $1,000 in Tesla via INDmoney (fractional shares, 0.5% forex fee).

Key Takeaways

1. Start Simple: Use mutual funds for ease and lower risk.
2. Diversify Geographically: Allocate 10-20% of your portfolio globally.
3. Stay Tax-Compliant: File Form 67 for foreign tax credits.