Demat Account for NRI

This guide walks you through the entire setup, soup to nuts. What PIS is, how to get it, which Demat account type you need, and the exact steps to open one with the most popular NRI brokers.

PIS stands for Portfolio Investment Scheme. Think of it as the RBI's tracking system for NRI money flowing into Indian stocks.

Every share you buy or sell as an NRI gets routed through a single designated bank account that has PIS permission. This account must be linked to your Demat account. The bank reports every transaction to RBI. Why? So RBI can monitor foreign investment flows and enforce repatriation limits.

Without PIS permission on your bank account, no broker will let you trade Indian equities. It's mandatory. Not optional. The only exception: if someone gifts you shares or you inherit them, those can sit in a non-PIS Demat account, but you still can't buy or sell more without PIS.

Here's what this means for you: before you open a Demat account, you need a bank account in India with PIS permission attached to it.

You have two bank account types as an NRI: NRE (Non-Resident External) and NRO (Non-Resident Ordinary). Your Demat account follows the same split.

NRE Demat is linked to your NRE savings account. Money you send from abroad (repatriable funds) goes here. Stocks you buy through this account are repatriable — meaning you can sell them, and the sale proceeds can be sent back to your foreign bank account without restriction. You fund purchases with foreign currency you've remitted to India.

NRO Demat is linked to your NRO savings account. This account holds money you earned in India — salary from an old job, rental income from a flat in Pune, dividends, interest. Stocks bought through NRO Demat are non-repatriable. You can sell them, but getting the money out of India is capped at one million dollars per financial year after taxes.

Picture this: you remit fifty thousand dollars from your US salary to buy Infosys shares. That goes through NRE Demat. You also earn two lakh rupees annual rent from a property in Bangalore. You use that to buy Reliance shares. That goes through NRO Demat.

Most NRIs open both. The broker setup allows you to link one NRE savings account and one NRO savings account to a single trading account. You pick which route you want for each purchase.

So what does this mean for you? If you plan to bring the money back abroad eventually, use NRE Demat and fund it with money you send from overseas. If you're investing Indian-earned income and don't need to repatriate soon, NRO Demat works fine.

You get PIS permission from a bank, not from RBI directly. RBI delegates this to authorized dealer banks — essentially every major bank in India.

Walk through the process:

Step one: Open an NRE or NRO savings account if you don't have one already. You'll need your passport, visa copy, overseas address proof, PAN card, and a cancelled cheque from your foreign bank account. Most banks let NRIs open accounts online now — ICICI, HDFC, Axis all have full digital journeys.

Step two: Apply for PIS permission on that account. You submit a single-page form to the bank. The form is called the PIS application form. Each bank has its own version, but the content is identical: your name, account number, PAN, a declaration that you'll follow RBI rules.

ICICI calls it the "PIS Permission Request Form". HDFC calls it "Application for Portfolio Investment Scheme". Same thing. You'll find it on the bank's NRI services page or in your net banking portal under Requests.

Step three: The bank processes it in three to five working days. No RBI approval step. The bank itself grants permission and assigns you a PIS code. This code is your account number with a prefix — for example, if your account number is 123456789, your PIS code becomes something like ICICI123456789PIS. The exact format varies by bank.

Step four: The bank emails you a PIS permission letter. This letter states that account number [X] is approved for stock trading under PIS. You'll need to upload this letter when opening your Demat account.

Now, this is where it gets interesting: you can only have PIS permission on one bank account at a time. If you have accounts at both ICICI and HDFC, pick one for PIS. You can change it later by surrendering the old PIS and applying fresh at the other bank, but you cannot hold two active PIS permissions simultaneously.

Cost? Zero. Banks don't charge for granting PIS permission. Some banks charge an annual maintenance fee for the NRE or NRO account itself, but the PIS overlay is free.

So what does this mean for you? Open your NRE or NRO account first, get PIS permission on it, then approach a broker. The broker will ask for the PIS letter during Demat account opening.

Not all brokers accept NRI clients. The big five that do, with full online account opening:

Zerodha NRI — Flat Rs 20 per trade, no percentage brokerage. Clean platform. Most popular among tech-savvy NRIs. Supports both NRE and NRO Demat. Requires POA (more on this below).

ICICI Direct NRI — Brokerage is 0.55% per trade, higher than Zerodha but you get a relationship manager and phone support. Good if you also bank with ICICI. Integrated PIS setup if you have an ICICI NRE account. POA optional.

HDFC Securities NRI — Similar to ICICI Direct. 0.50% brokerage. Strong research reports. Seamless if you have an HDFC NRE account. POA optional.

Kotak Securities NRI — 0.49% brokerage for NRI accounts. Good mobile app. Tight integration with Kotak Bank NRE accounts. POA optional.

Angel One NRI — Rs 20 per trade flat fee, competing with Zerodha. Smaller user base among NRIs but platform is solid. Requires POA.

Let me put this in perspective: if you trade frequently, Zerodha or Angel One saves you money. If you want hand-holding and phone support, ICICI or HDFC is better. If you already have an NRE account at one of these banks, start there — integration is smoother.

Power of Attorney is a legal document where you authorize the broker to move shares in and out of your Demat account on your behalf.

Here's why it matters: when you buy shares, the broker needs to credit them to your Demat. When you sell, the broker needs to debit them. Normally, every debit requires you to manually submit a Delivery Instruction Slip (DIS) — a physical form with your signature. You'd have to courier a signed form from Dubai to Mumbai every time you sell a stock. Not practical.

POA lets the broker handle this automatically. You sign it once during account opening, get it notarized, and from then on, the broker can debit shares when you place a sell order.

Zerodha and Angel One require POA for NRI accounts. No POA, no account. ICICI, HDFC, and Kotak make it optional. If you skip POA with them, you'll use CDSL's online TPIN system to authorize each sell transaction digitally. Less convenient, but it works.

The POA document is broker-specific. Zerodha provides a PDF. You print it, sign it, get it notarized at an Indian consulate or a local notary in your country of residence, and courier it to Zerodha's Bangalore office. Turnaround is five to seven days.

Notarization costs vary. At an Indian consulate in the US, it's around thirty dollars. Some NRIs notarize with a local notary and then get an apostille — an international certification that Indian authorities accept. Apostille costs fifty to hundred dollars depending on the state.

So what does this mean for you? Budget a week and a hundred dollars for POA if you go with Zerodha or Angel One. If you want to avoid the hassle, pick ICICI or HDFC and use TPIN instead.

Zerodha is the most common choice, so let's walk through their exact process.

Step one: Go to https://zerodha.com/open-account/nri. Click "Open an NRI Account".

Step two: Enter your mobile number and email. You'll get an OTP. Verify.

Step three: Fill the online form. Fields: full name, date of birth, PAN number, father's name, current residential address (your overseas address), tax residency country.

Step four: Upload documents. You need:

All uploads are JPG or PDF, max two MB per file.

Step five: Choose account type. You'll see checkboxes for NRE Demat, NRO Demat, or both. Tick both unless you have a specific reason to use only one.

Step six: Enter bank account details. Account number, IFSC code, bank name. This is the PIS-enabled account. Zerodha will verify it by checking the MICR code on your cancelled cheque against the PIS letter.

Step seven: Download the POA form. It's a two-page PDF Zerodha generates with your name pre-filled. Print it, sign on the marked spaces, get it notarized.

Step eight: Courier the notarized POA to Zerodha's Bangalore office. The address is printed on the form itself: "153/154, 4th Cross, J.P. Nagar 4th Phase, Bangalore - 560078".

Step nine: Complete in-person verification (IPV). Zerodha does this via video call. They'll email you a link to schedule a ten-minute video session. Keep your original passport and PAN card handy. The agent verifies your face, checks the documents, asks your residential address. Done.

Step ten: Wait for approval. Zerodha's backend team checks your PIS letter against their RBI guidelines. If everything matches, you get an email with your Demat account number and trading login credentials. Timeline: seven to ten working days after they receive your notarized POA.

Step eleven: Transfer money. Send dollars from your foreign bank to your Indian NRE account using wire transfer or an app like Wise. Once the money lands in your NRE account, move it to your Zerodha trading account via net banking. Zerodha's trading account is a virtual account number linked to your Demat — you'll see it in your Zerodha dashboard. Transfer from your NRE savings to that Zerodha account number.

Step twelve: Start trading. Log in to Kite (Zerodha's platform), place orders. Stocks you buy get credited to your NRE Demat within T+1 day (one day after purchase).

So what does this mean for you? Budget two weeks from application to first trade. The POA courier step is the longest delay. Some NRIs courier the POA before even starting the online application to save time — you can request the blank form from Zerodha support, notarize it, send it, and then complete the online form.

You can buy as many Indian stocks as you want through NRE Demat — no upper limit on investment amount. But RBI does have overall caps:

Repatriation cap: If you sell stocks in NRE Demat, you can send the full sale proceeds abroad without limit. No cap. This is the advantage of the NRE route.

NRO repatriation cap: If you sell stocks in NRO Demat, you can repatriate up to one million US dollars per financial year. Financial year means April 1 to March 31. This one million includes all NRO repatriations — not just stock sales, but also rental income, fixed deposit interest, anything you send out from NRO accounts.

Example: you sell NRO stocks worth two million dollars in June 2025. You can send one million out immediately. The remaining one million must wait until April 1, 2026 (start of the next financial year). Or you leave it in India and reinvest.

Tax deducted at source (TDS): When you repatriate from NRO, the bank withholds tax before sending the money out. The rate depends on your income type. For long-term capital gains on stocks (shares held over a year), TDS is 10% on gains exceeding one lakh rupees. For short-term capital gains, TDS is 15%. These are the same rates resident Indians pay, but as an NRI, the bank deducts it upfront.

Let me put this in perspective: if you invest Indian-earned money, go NRO and accept the one million per year cap. If you're investing remitted foreign money and want full freedom to withdraw, go NRE.

Mistake one: Opening a Demat account before getting PIS permission. The broker will reject your application if your bank account doesn't have PIS. Do the bank step first.

Mistake two: Trying to trade without linking the PIS account. Some NRIs have one bank account with PIS and another without, and they link the wrong one to the broker. The broker's system checks the PIS code during your first trade. If it doesn't match RBI's records, the trade fails.

Mistake three: Using LRS (Liberalised Remittance Scheme) funds to invest in stocks. LRS is the two hundred fifty thousand dollar per year limit for general remittances — buying property, sending money to kids, vacation spending. Stock purchases under PIS do not count against LRS. They're a separate, unlimited route. So you don't "use up" your LRS by buying stocks. But NRIs often confuse this and think they're limited to $250,000 per year in stocks. Not true.

Mistake four: Forgetting to file taxes in both India and your resident country. India taxes your capital gains. The US (if you're a US NRI) also taxes your global income. You'll need to report Indian stock gains on your US tax return and claim foreign tax credit for the Indian tax you paid. Not doing this leads to double taxation without relief.

So what does this mean for you? Get PIS first, link the right account, ignore LRS confusion, and plan for dual tax filing.

Here's your sequence:

The whole process, start to finish, takes two weeks if you move fast. Four weeks if you're casual about the POA courier.

You're now set up to invest in India as an NRI the official, legal, RBI-compliant way. The system looks complex from the outside, but once you're inside, trading works exactly like it does for resident Indians. Same stocks, same market hours, same settlement cycle. The only difference is the paperwork upfront.

And that upfront paperwork — PIS, NRE Demat, POA — is the price of keeping RBI happy and your money repatriable. Pay it once, benefit forever.