There are many easy ways to invest in US markets from India now. I have personally been using Winvesta since the last couple of months and have found it to be quite good. It took only a few minutes to sign up and get a US brokerage account. That’s faster than getting a domestic brokerage account!
Being an investment manager in the past, account security was my primary concern. Winvesta team helped me provide all the required information. The account is held with a FINRA regulated broker-dealer in the US, and the money is secured by $500,000 SIPC insurance.
There are a few things to keep in mind when you are looking to invest in the US (good and bad):
- US listed companies have the largest total market cap by far. Many of the big US firms get their revenues from across the world (almost 40% of S&P 500 revenue is from outside US). So you are really getting a global exposure, and not domestic.
- There is a vast universe of stocks available in US markets. Some of those are not compliant with Indian regulations. Winvesta has excluded such stocks and ETFs containing such stocks from their selection so you will not have to worry.
- Investing in the US also means you are investing in USD, so you will get all the upside (or downside) from USD-INR appreciation.
- Think long term, invest consistently and do not panic on brief periods of volatility. Remitting money overseas may cost you 2–3% at the outset, but US markets have outperformed Indian markets by 10–12% annually in INR terms in the last 10 years.
- There is no capital gains tax for foreigners. The dividends are taxed at flat 25% for Indians, and tax is withheld by the broker, so there is no need to file tax in the US. In India, cap gains will be taxed as usual, and dividends will be taxed as ordinary income. You can offset dividend tax withheld in the US against your Indian taxes with foreign tax credits.
- For remitting the money to your brokerage account, you may need to visit your bank branch (depending on the bank, ICICI is fully digital). That is the only physical step required. I had to go to IDFC First branch, but my money was remitted the same day and I was able to start trading the next day after downloading the Winvesta app.
Hope this was useful. Times have changed, and investing in US is not for the wealthy only anymore. Having a global portfolio in today’s global world is both prudent and smart.