Areas to consider, while becoming an NRI

Let’s start with the question, “Why should one even bother to consider, if any change is required when they become a Non-Resident Indian?”

To answer this question, we must first consider what the underlying changes are, that comes along, when you become a Non-Resident Indian.

Firstly, your financial situation changes; i.e. your income/expenses, your goals & objectives etc. need to align to your new way of life;

Secondly, you now come under the rules & policies of two countries (or more, for some cases); i.e. the country of origin, and the new country of residence.

Look at some of the fundamental areas to be considered, while making this switchover from a Resident to Non-Resident Indian.

Personal Financial Plan:

At this stage, your financial plan will be in its most dynamic structure. And it should be, while you settle with your new routine, in an overseas location. You need to ensure having excess liquidity, to meet for any unexpected cash-flow; and avoid making any investments in haste during this period.

You may visit the plan quarterly to reconcile your cash flows, till they become stable; before making further long-term plans.

Transaction Accounts:

 While moving to a new country; it may take a while for you to open a bank account. You may check for authorised app-based platforms (these also issue VISA enabled cards) and equip yourself to handle bills and other local payments; till you get an address proof to open bank accounts.

While for India, as you have become an NRI under FEMA (assuming you went overseas for employment), you need to convert your Savings Account to NRO, and open NRE A/c (once you have an overseas address) to hold freely repatriable funds in INR.

Investment Accounts:

 All your investments in India should be converted to a Non-Resident status. Some investments may continue, while few may require your exit (depending on their policy and your country of residence now). You also need to update your records with the Permanent Account Number (PAN). All of these will need an overseas address proof.

In the new country, you may wait for a while before making investments; till your cash flows attain some stability. Ensuring adequate liquidity holds key at this stage.

 Tax Matters:

 Each country has their own unique tax codes, and ways for treating earnings from capital assets as well as employment. You need to be familiar with these, for each of the jurisdictions. This will not only help you avoid getting on the wrong side of the taxman, it will also help you devise ways to effectively manage your incomes and savings.

Cross-border matters:

 Following policies and abiding by them in each country in isolation, is simple; although process oriented. The critical requirement here, is to be aware of the financial implications on one country, for the decisions taken in another; and vice-versa. Managing this cross-border entanglement well, shall define if you have the required financial independence.

 Clearly, this is not an exhaustive list, and each of the areas above is just a glimpse to the deeper subject matter. There may be a pattern to a Non-Resident individual’s scenarios; however, your journey through life is unique, just like your fingerprint. Hence, you deserve a customised solution.