Why PMS Makes Sense for NRIs And How to Do It Right?
Own Your Stocks, Not Just Units - A Smarter Way for NRIs to Invest in India
For NRIs, investing in India is not just about opportunity - it’s about efficiency, transparency, and compliance. Portfolio Management Services (PMS) offer a unique way to build long-term wealth in India without the complexity of traditional investment vehicles.
Investing in India comes with multiple hurdles - from KYC compliance to taxation and remittance tracking. PMS bridges these gaps through a more structured and compliant approach, giving investors peace of mind while staying aligned with global tax obligations.
Why PMS with Direct Ownership Isn’t Just a Buzzword
One of the things many NRIs don’t realize is how fundamentally different PMS is from mutual funds or pooled investment vehicles - and direct ownership is at the heart of that difference.
With PMS, you own the actual stocks in your name. If the manager buys 1,000 shares of Reliance, those shares are in your Demat account. You’re the legal owner.
In contrast, mutual funds issue you units; the fund owns the shares. That means less transparency, less control, and - for US NRIs especially - potential PFIC issues.
Having your own shares means you see every transaction, can track positions, corporate actions, dividends, etc.
It also gives you more flexibility in things like tax loss harvesting (where applicable), avoiding stocks you can’t hold (due to employment or insider issues), or corporate actions you may want to accept/decline.
If you’ve been wondering how to move beyond generic exposure and want more clarity, control, and compliance - direct ownership via PMS offers you those benefits.
Special Focus: Why PMS Is a Game-Changer for US NRIs
For NRIs in the US, taxation and compliance often complicate the investment journey. Mutual funds and AIFs typically fall under PFIC (Passive Foreign Investment Company) rules, triggering complex IRS reporting and potentially punitive taxation.
PMS, however, is not classified as PFIC, making it one of the cleanest, most compliant ways to invest in India from the US.
That’s why iNRI and Capitalmind PMS are coming together for an insightful webinar:
🎙 US–India Tax Compliance with Capitalmind PMS
Join us for an engaging and practical conversation on cross-border tax and investment compliance — a critical yet often misunderstood area of financial wellness for NRIs.
Topics we’ll cover
How the US-India DTAA works and how to claim rightful tax credits
IRS reporting: FBAR, FATCA, 8938, and 8621 (PFIC)
Indian compliance: PAN, ITR filing, and TDS on gains and dividends
Why PMS is PFIC-free and tax-efficient
The Capitalmind PMS advantage: transparency, research, and compliance
Is PMS Right for You?
Here are some signals that PMS might be a good fit:
You have a corpus of ₹50 lakhs or more (or equivalent in your currency) to invest.
You prefer owning actual securities rather than fund units.
You want professional management without the day-to-day burden of trading, monitoring, compliance, and paperwork.
You can commit to a medium to long horizon (5-7 years), so the professional management and fee structure work in your favor.
How to Select a PMS Provider and What Sets One Apart
Choosing the right PMS is about more than returns - it’s about alignment with your financial goals, philosophy, and risk appetite.
Here’s what to look for:
Investment philosophy: Understand whether the PMS follows a value, growth, or quant-based approach.
Track record: Review long-term performance, not just short-term numbers.
Transparency: Ensure full visibility on fees, holdings, and trade rationales.
Team credibility: The strength and experience of the fund management team matters deeply.
Tax and reporting support: For NRIs, especially in the US, choose PMS providers who understand cross-border compliance nuances.
Technology & access: Seamless account visibility, regular updates, and clear communication go a long way.
Capitalmind PMS, for instance, combines data-driven investing, low churn, and tax-efficient strategies, designed to grow wealth transparently and sustainably.