Can NRIs Invest in PMS in India? FEMA and SEBI Rules for 2026

If you typed "can NRI invest in PMS" into a search bar, the answer is yes. An NRI or an OCI cardholder can sign up for portfolio management services with a SEBI-registered manager, and the minimum is the same Rs 50 lakh a resident pays.

The longer answer is that "yes" comes with conditions, and almost none of them sit in the PMS rulebook. They sit in the FEMA rules, India's foreign exchange law. Those rules decide which securities your manager may buy for you, how much of one company you may own, and whether the money can go abroad again.

This guide covers those rules and nothing else. Documents, the NRE versus NRO decision, the detailed tax computation and treaty claims are separate subjects and get only a pointer here.

One caution applies throughout. Regulation sets the outer boundary. A portfolio manager, its custodian and your bank may each apply stricter house rules.

Non-residents have long been able to buy listed Indian shares through RBI's Portfolio Investment Scheme, under which an authorised dealer bank issues a permission letter and routes trades through a designated branch. What has changed is who qualifies and how much they may hold.

• 9 January 2015: PIO cardholders were deemed to be OCI cardholders.
• January 2016: a FATCA self-declaration became mandatory for every investor in Indian securities.
• 2019: the FEMA (Non-Debt Instruments) Rules took over. Schedule III covered stock-exchange purchases on a repatriation basis and capped an individual NRI or OCI at 5% of a company and all of them together at 10%, which a company could raise to 24% by special resolution. Schedule IV covered the non-repatriation basis.
• 16 January 2020: SEBI notified the SEBI (Portfolio Managers) Regulations, 2020, with a Rs 50 lakh minimum.
• 12 June 2026: following a Union Budget 2026-27 proposal, the Ministry of Finance opened Schedule III to every individual living outside India and raised the limits. RBI issued its circular to banks on 15 June 2026.
• 7 October 2026: SEBI notified the SEBI (Portfolio Managers) Regulations, 2026, effective 1 April 2027.

The direction is toward wider access and lighter mechanics. RBI's updated Master Direction says accounts earlier labelled NRO (PIS) are simply re-designated NRO.

Most confusion about PMS for NRIs disappears once you see that two regulators answer two different questions. SEBI regulates the portfolio manager. RBI and the Ministry of Finance, through FEMA, regulate you.

Very little, and that is the point. A full-text search of the SEBI (Portfolio Managers) Regulations, 2020 finds no reference to NRIs, non-residents or FEMA. The only cross-border clause is regulation 25, which says foreign portfolio investors may use a portfolio manager. Regulation 23(2) bars a manager from accepting funds or securities worth less than fifty lakh rupees from "the client", whoever the client is. SEBI's own FAQ on portfolio managers, dated 20 September 2024, states the minimum the same way.

So a non-resident Indian gets the same protections as any other client. The manager must keep each client's securities in separate accounts, may not hold them in its own name and may not borrow on the client's behalf. The one place SEBI singles out non-residents is timing: its Investor Charter gives the manager 14 days to open a non-resident client's PMS account once all documents are in, against 7 days for residents.

The SEBI (Portfolio Managers) Regulations, 2026 were notified on 7 October 2026. Regulation 1(2) brings them into effect from 1 April 2027, when they repeal the 2020 Regulations. Until then the 2020 text and the July 2025 Master Circular govern your account.

For an NRI the new text changes little. Regulation 16(3) keeps the Rs 50 lakh minimum, regulation 16(4) keeps the exemption for accredited investors, and a new mutual-fund-only route called PRIM carries a Rs 25 lakh minimum. The 2026 Regulations also say nothing specific about NRIs, so the FEMA rules remain where the conditions live.

"NRI" means two different things in Indian law, and you can be one without being the other.

RBI's Master Direction defines a non-resident Indian as an individual resident outside India who is a citizen of India, and an OCI as an individual resident outside India registered as an Overseas Citizen of India cardholder under section 7A of the Citizenship Act, 1955. SEBI's investor material says OCI investments are treated on par with those of NRIs.

Tax residence is arithmetic. The Income Tax Department's guidance for non-resident individuals says you are resident if you are in India for 182 days or more in the year, or for 60 days in the year and 365 days over the four preceding years. For Indian citizens and persons of Indian origin who are visiting, the 60 becomes 182, or 120 if Indian-source income exceeds Rs 15 lakh.

The two statuses can diverge. Someone who moved to Singapore in January is a non-resident for FEMA from departure but may still be tax-resident in India for that financial year. Your PMS account type follows FEMA. Your tax rate follows the Income-tax Act.

Since June 2026 there is a third group. Schedule III covers every individual resident outside India, so a foreign citizen of Indian origin without an OCI card is no longer shut out of the listed-equity route. Whether a given manager will onboard such a client is a separate question.

Every rupee a non-resident invests in India carries one of two labels, and the label decides most of what follows. RBI's Master Direction on Foreign Investment in India defines investment on a repatriation basis as one whose sale proceeds, net of taxes, are eligible to be sent abroad. Everything else is investment on a non-repatriation basis.

The repatriation basis keeps your exit open and narrows what the manager can buy. The non-repatriation basis widens the menu and removes the caps, but RBI's direction says the amount invested and its appreciation cannot be repatriated as such; what leaves India later does so under the general NRO limit.

Which bank account sits behind each label, and whether your mandate needs Portfolio Investment Scheme permission at all, belongs to a separate guide on NRE versus NRO funding. For eligibility the point is simpler: both routes are open, and you choose before you fund.

The caps apply only to the repatriation route, and they were rewritten on 12 June 2026.

Before that date the limits were 5% for an individual NRI or OCI and 10% for all of them together. SEBI's investor presentation on NRIs, dated September 2022, still shows those older figures.

The amended Schedule III, as reflected in RBI's Master Direction updated to 15 June 2026, says an individual's holding shall be less than ten percent of the total paid-up equity capital on a fully diluted basis, and the holdings of all individual persons resident outside India put together shall not exceed twenty-four percent. Holdings the same person has under other foreign-investment routes are counted together against the individual limit.

For a PMS investor the individual cap is academic; a Rs 50 lakh or Rs 5 crore portfolio will not approach 10% of a listed company. The aggregate cap matters, because it is shared with every other non-resident individual. When a company reaches it, your manager's model portfolio has to do without that stock in your account.

The amended rules give a short correction window. The excess must be sold within five trading days of settlement of the trades that caused the breach. If it is not, the investor's entire holding in that company is treated as foreign direct investment, no further portfolio purchases in it are allowed, and the depositories and the company must be informed within seven trading days.

You do not track this yourself. RBI's circular of 15 June 2026 says monitoring follows the existing process for NRI and OCI investments. SEBI's investor material describes it: depositories publish a breach list and a red-flag list of companies at or near their ceilings, and the broker must check them before a buy order. One large custodian bank describes computing tax and settling an NRI's secondary-market trades on the next trading day.

These restrictions explain why an NRI's portfolio can differ from the same strategy run for a resident.

• No intraday trades and no short selling. SEBI's investor presentation on NRI investments says only delivery-based transactions are allowed for NRIs: you take delivery of what you buy and give delivery of what you sell.
• Derivatives only on a non-repatriation basis. The same material says NRIs may trade futures and options on a non-repatriation basis only. A strategy that hedges with index futures cannot be replicated in a repatriable account.
• No unlisted shares on the stock-exchange route. Schedule III covers listed equity bought on a recognised exchange. A non-discretionary PMS may place up to 25% of a client's assets in unlisted securities under SEBI's rules, but for a non-resident that portion would sit on the non-repatriation side or under the separate foreign direct investment rules.
• No Nidhi companies, farm or plantation businesses, or real estate trading. On a non-repatriation basis, RBI bars NRIs and OCIs from equity of a Nidhi company and of companies engaged in agricultural or plantation activities, real estate business, construction of farm houses or dealing in transferable development rights.
• No stock that has hit its aggregate ceiling.
• No borrowing and no leverage for derivatives. This is a SEBI rule for every PMS client.

Many managers run one listed-equity model for all clients, in which case most of these never arise. Ask, because the answer decides whether you get the strategy in the factsheet or a trimmed version.

SEBI's monthly PMS statistics show 511 portfolio managers reporting about Rs 44.35 lakh crore of assets as on 31 August 2026, across roughly 2.26 lakh client accounts. SEBI does not publish how many are non-residents. For those who are, the structure offers several things.

• The law is clear. No SEBI rule bars a non-resident client, and FEMA expressly permits listed-equity investment by individuals resident outside India.
• The entry price is the same. The Rs 50 lakh minimum applies to everyone.
• You own the shares. Securities sit in a demat account in your name, segregated from other clients; the manager cannot hold them in its own name.
• The exit can stay open. On a repatriation basis, sale proceeds net of tax may be remitted abroad.
• There is headroom. The non-repatriation route has no FEMA holding cap, and the repatriable aggregate rose from 10% to 24% in June 2026.
• Someone else does the operations. A discretionary manager places trades, the custodian settles them and the bank handles reporting and tax deduction. For an investor several time zones away, not having to approve trades at Indian market hours is the main convenience.
• There is a service clock. The Investor Charter in SEBI's Master Circular for Portfolio Managers sets 14 days to open a non-resident account once documents are complete.
• For US persons, a PMS holds company shares directly, so the passive foreign investment company test is applied company by company, not to a fund unit.

The rules above tell you whether you may invest. They do not tell you which of several hundred strategies to look at, and that is the part PMS Sahi Hai is built for. The site describes itself as India's first AI-powered PMS and AIF marketplace, and its research tool, Nyra, as an AI-powered research platform for PMS, AIF and GIFT City funds that matches from more than 900 tracked offerings. The same page is clear about the limit: Nyra is an analytical tool, not a SEBI-registered investment adviser, and its output is informational, not personalised advice.

For a non-resident working through the eligibility question, four parts of the site are relevant.

• A direct answer. The site's FAQ says NRIs can invest in PMS through NRE or NRO accounts, subject to FEMA and FATCA compliance, and that the team filters for NRI-eligible managers. That is the "ask the manager" step from this guide, done across managers.
• Side-by-side comparison. The PMS comparison view filters strategies by category, fund house, benchmark, size and style and sets up to four side by side. It has no NRI-eligibility filter on the page itself, so treat a shortlist as the start of the acceptance question.
• The US and Canada question. The site's PFIC page makes the same structural point as this article, that a PMS is direct ownership of shares, not units of a pooled fund, and says the position is confirmed against each client's facts. It is general information, not US or Canadian tax advice.
• Related reading. The NRI hub leads with the GIFT City alternative. The site's guides on what a PIS account is and the route from overseas funds to an Indian demat account pick up where this one stops.

One thing should be said plainly. The site does not publish the FEMA holding caps, the list of what a non-resident mandate cannot buy, or which managers accept which countries, and nothing on it says Nyra checks FEMA eligibility. Eligibility is confirmed by your authorised dealer bank and the portfolio manager. What the firm offers is a person to ask: its contact page promises a first reply within two business hours and a 15-minute conversation, with no upfront fees. PMS Sahi Hai operates through Nyra Capital Partners Consultancy Pvt Limited, an APMI-registered distributor (APRN08358).

Nothing in SEBI's or RBI's rules bars an NRI because they live in the United States or Canada. The friction is at the level of the individual manager, and it has three sources.

FATCA reporting. Every investor in Indian securities has filed a FATCA self-declaration since January 2016, and US citizens and green card holders must list the USA as a country of residence even if they have moved. SEBI's own investor presentation notes that some fund houses do not accept applications from US and Canada based NRIs. That statement is about mutual funds; distributor commentary says the same of some portfolio managers, though the most cited list dates from 2020.

US adviser registration. A portfolio manager is an investment adviser in US terms. The US Securities and Exchange Commission's rules on the foreign private adviser exemption spare a non-US adviser from registration only if it has no place of business in the United States, fewer than 15 clients and investors there, and less than USD 25 million of assets attributable to them. A manager near those thresholds has a reason to cap or decline US-resident clients.

PFIC. US tax law treats a foreign corporation as a passive foreign investment company if 75% or more of its income is passive or at least 50% of its assets produce passive income, and the IRS instructions for Form 8621 require a US person holding one to file that form each year. Pooled funds generally fall on the wrong side of that test. Shares of operating companies held directly in a PMS are tested company by company and usually do not. Two cautions: liquid fund or ETF units parked inside a PMS are still fund units, and the determination belongs to a US tax adviser, not an Indian manager.

So the first question to a manager is plain: do you accept clients resident in my country, and on what conditions? Ask before sending a single document.

A PMS is not a taxable entity. Each sale in your account is your own transaction, so you are taxed as if you had traded the shares yourself. The Income-tax Act, 2025 has applied since 1 April 2026.

• Listed shares sold within 12 months: short-term capital gains at 20%.
• Listed shares sold after 12 months: long-term capital gains at 12.5% on gains above Rs 1.25 lakh in a year.
• Dividends: 20% for non-residents under domestic law, subject to any lower treaty rate.

Surcharge and cess are added. Two features are specific to non-residents. Tax is deducted before you see the money: SEBI's investor material describes the bank crediting sale proceeds only after deducting the applicable tax. And a treaty rarely removes Indian tax on share gains; India's treaties with the US, the UK and the UAE all let India tax gains on shares of Indian companies.

Set-off of losses, refunds and treaty paperwork belong to the separate guides on NRI capital gains tax and treaty claims. Outcomes depend on your country of residence and personal facts, so confirm yours with a qualified tax adviser.

Coming back to India to stay changes your FEMA status, and the account has to follow.

SEBI's investor material puts the duty on you: an NRI who becomes resident must inform the designated authorised dealer branch and the depository participant. The demat account is converted to resident status, and the non-resident trading account is closed and a resident one opened. RBI's FAQ on accounts of NRIs and PIOs says NRE accounts should be re-designated as resident accounts on return, or the funds moved to a Resident Foreign Currency account.

For the portfolio, three things change.

1. The FEMA restrictions fall away. Holding caps and delivery-only limits apply to non-residents; as a resident you can be given the unrestricted strategy.
2. The repatriation right ends with the status. Sending the money abroad later comes under the rules for residents.
3. Tax follows your day count, not your account label. Once you are tax-resident, resident rules apply; have a tax adviser map the transition.

The PMS agreement normally continues, but tell the manager promptly so that KYC records, the bank mapping and tax deduction are updated.

The reverse case matters too. If you opened a PMS as a resident and then moved abroad, RBI's Master Direction says the existing investment is treated as held on a non-repatriation basis, and your resident bank account must be re-designated as NRO.

This article stops at eligibility. The steps that follow are summarised so you can see the whole path.

The list of drawbacks is short but real.

• The ticket is large. Rs 50 lakh in one mandate is a concentrated commitment.
• The toolkit is narrower. Without intraday trades, short sales or, on the repatriable side, derivatives, some hedged strategies cannot be offered in full.
• The aggregate cap is outside your control. A stock can become unavailable because other non-resident individuals already hold 24% of it.
• Non-repatriation money is sticky. Proceeds go only to an NRO account, and remittance abroad is limited to USD 1 million a financial year.
• Your country can narrow the field. US and Canada residents should expect some managers to say no.
• Tax is withheld first, which reduces cash for reinvestment until any refund arrives.
• Official material lags. SEBI's investor presentation and many bank pages still show the pre-June-2026 limits. Check the date on anything you read.

Can NRI invest in PMS? Yes, and the rules behind the answer fit in one paragraph.

SEBI regulates the manager and sets a Rs 50 lakh minimum that does not vary with residence. FEMA regulates you. If you want the freedom to take the money abroad, you invest on a repatriation basis, your mandate is listed equity bought on an exchange, and no stock can be bought once non-resident individuals together hold 24% of it. If the money can stay in India, the non-repatriation route removes the caps at the cost of an NRO-only exit. Either way there is no intraday trading or short selling, and tax is deducted before proceeds reach you.

Then work through four questions, ideally before you compare strategies on PMS Sahi Hai or put structural questions to Nyra. Am I a non-resident under FEMA today, and what is my tax residence this year? Which route fits the money I plan to invest? Does this manager accept clients from my country, and is the strategy I am shown the one I will get? What would change if I moved back?

Two dates matter. The June 2026 FEMA changes are in force, so any page quoting 5% and 10% is out of date. The SEBI (Portfolio Managers) Regulations, 2026 start on 1 April 2027 and keep the Rs 50 lakh minimum.

This article is general information, not legal, FEMA or tax advice. Confirm your position with your authorised dealer bank, your portfolio manager and a qualified tax adviser before acting.

Write down three facts: your country of residence, whether you hold an Indian passport or an OCI card, and whether the money needs to be able to leave India again. Those answers decide your route and narrow the list of managers who can take you.

Then put two questions to any manager you are considering. Do you accept clients resident in my country? Is the portfolio you will run for me the same as the one in your factsheet, and if not, what is left out for a non-resident? Proceed to paperwork only when both answers are clear.

If you would like help getting those answers across more than one manager, book a 15-minute call with PMS Sahi Hai and say where you live and which route you plan to use. While you wait, use Nyra to compare the strategies on your list with their peers.