Is an Indian resident allowed to invest in an offshore fund/security?
Yes, an Indian resident, according to the Liberalized Remittance Scheme (“LRS”) of Reserve Bank of India (“RBI”) is legally allowed to invest in an offshore fund/security.
What is the legal way to route funds for making an offshore investment?
The simplest way to route funds for making an offshore fund/security investment is to comply with the LRS. This scheme sets permissible limits to invest in foreign currencies. You can thus transfer funds directly from your domestic account to the account of the fund.
Those who already have or wish to open foreign currency accounts with a bank outside of India would not necessarily be subject to the limitations of the LRS and can make investments without prior approval of RBI.
What is the permissible limit for offshore investments under the LRS of RBI?
Currently, RBI has set the annual limit per financial year per person to be US$ 250,000.