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How Indians Can Invest in Facebook and Google Shares?

IndianMoney.com Research Team | Posted On Friday, February 07,2020, 04:32 PM

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How Indians Can Invest in Facebook and Google Shares?

 

 

The US economy is doing well and you and many Indians want to be part of the growth story. Indians are looking to buy shares of Google, Facebook and Tesla listed in the US. Sadly, these companies are not listed in India. These are great Companies for their earning potential and attract investors from across the Globe.

So, how can you invest in shares in the US? Well, Indian brokerage houses have tie-ups with Foreign Brokerage Houses to aid investments in the US and other International Markets. You would have to open an overseas trading account to trade in shares in the US/International Market.

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How Indians Can Invest in Facebook and Google Shares?

How Much Can You Invest Abroad?

You can invest in shares outside India through the Liberalised Remittance Scheme or the LRS. The maximum permissible investment abroad through Liberalised Remittance Scheme is $2,50,000. This was introduced by the RBI in 2004. The amount invested abroad can be retained and reinvested in any overseas assets. Now, $1 is Rs 70. This amounts to Rs 1.75 Crores. This is more than $1 Million for a family of four people. That’s quite a sum to invest.

See Also: Foreign portfolio investments in India

Get Ready for High Charges:

If you are investing in International stocks, transaction charges are in dollars. Stock brokerage charges are higher compared to the Indian Stock Market. Annual and Maintenance charges are also higher. You must factor all these costs before investing in Facebook and Google shares in the US.

Profits are Affected by Currency Exchange Rates:

This simple example helps understand what happens if you invest in US stocks. When you bought the US stock the currency exchange rate was $1 = Rs 70. In the following year the currency exchange rate was $1 = Rs 65. You have lost 7.1% just because the rupee gained against the dollar. So, profits are subject to currency exchange rate fluctuations.

See Also: International Capital Markets

How to Invest in Foreign Stocks?

  • You must open an account with an Indian Broker who has a tie-up with a foreign broker. There are several Indian Brokers who have tie-up with foreign brokers.
  • There are popular International brokerage firms which allow Indian citizens to open accounts and trade in US Stocks or Mutual Funds. They have offices where you can open overseas trading accounts and also get queries answered.
  • A number of mutual funds and ETFs invest in the International Market. This is a method of indirectly investing in the International Markets. You don’t require an overseas trading account on investing in ETFs and mutual funds which invest in foreign stocks. You don’t require a heavy investment while investing in these mutual funds or ETFs. For direct investing in foreign stocks you might be asked to maintain a $10,000 deposit.

See Also: All You Need To Know : How Stock Markets Function?

Why Invest in Shares of Facebook, Google, Amazon or Tesla in US?

  • Well you enjoy the diversification benefit. The US economy may be doing well when the Indian economy is not too strong.
  • You widen the investment horizon.
  • You can easily invest across International markets with the internet.

Do note: There are higher expenses and currency exchange rate fluctuations affect earnings.  

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