Yes, non-resident individuals who have been allotted shares under an Employee Stock Option Plan (ESOP) by listed Indian companies are eligible to open a trading account in India. This facility allows such individuals to sell shares acquired through ESOPs, even if they currently reside outside the country.
Who is eligible?
- Employees of Indian listed companies
- Employees of joint ventures or wholly owned subsidiaries abroad
- Indian citizens or individuals of Indian origin allotted shares via ESOP
Important: This facility is not available to citizens of Pakistan as per RBI and FEMA guidelines.
Key points to note:
- Purpose limitation: The trading account opened under this provision is restricted to the sale of ESOP shares only. Shares are credited to the Demat account but can be sold only after listing and lock-in completion.
- For unlisted shares, clients must check the listing date with the RTA (Registrar and Transfer Agent) or issuing company.
- Once eligible, shares can be sold, transferred, or gifted if the ISIN (International Securities Identification Number) is active.
- Type of account: Typically, this is treated as a non-repatriable account unless approved otherwise by the Reserve Bank of India (RBI).
- Document requirement: Valid proof of ESOP allotment and residency status is required at the time of account opening.
What if...
| Scenario | What you should know |
|---|
| You want to buy additional stocks | Not permitted; the account is strictly for selling ESOP shares only |
| You are a Pakistani citizen | You are ineligible under current RBI guidelines |
| You already have an NRI account | A separate account may be required specifically for ESOP sales |
To simplify the process, keep your ESOP allotment documents and identity/residency proofs ready when initiating the trading account setup.
Last updated: 25 Jun 2025