What steps should be taken if an Indian Resident becomes an NRI?
If your residency status changes from Resident Indian to Non-Resident Indian (NRI), it is essential to update your investment and account structure to remain compliant with Indian regulations, specifically under the Foreign Exchange Management Act (FEMA).
Required steps upon change of residency status
| Action | What you need to do |
|---|
| Notify your status change | Inform your designated bank (used for investments) and FYERS that your residency status has changed. |
| Open new NRI-compatible accounts | Set up either an NRE (Non-Resident External) or NRO (Non-Resident Ordinary) account based on your repatriation needs. These accounts will be used for all future transactions. |
| Update Demat & trading accounts | Convert your FYERS Demat and trading account to an NRO Non-PIS account. This ensures your trades align with NRI investment rules. |
What happens to existing holdings?
- Retained assets: Securities and mutual fund investments acquired as a Resident Indian can be retained.
- Holding type: These assets will be reclassified and held on a non-repatriable basis.
- Trading restrictions: You may need separate accounts for new investments and cannot continue using resident accounts for trading.
What if...
| Scenario | What you should know |
|---|
| You forget to update your status | Continuing to trade as a resident may lead to regulatory violations under FEMA |
| You want to repatriate funds | You must use an NRE account and follow RBI guidelines on repatriation |
| You only have mutual funds | Even mutual fund folios need to be tagged under NRO/NRE status |
To ensure a seamless transition, consult your bank and contact us for help with account conversion, required documents, and compliance steps.
Last updated: 25 Jun 2025