For many Indian investors, buying foreign stocks directly is no longer just a preference, it has become the only open option. Mutual funds that invest abroad are bound by a combined industry cap of $7 billion, a limit that has filled up through 2026.
More people are now turning to the Liberalised Remittance Scheme (LRS) to send money abroad and buy US and other foreign stocks directly. Platforms such as Vested, INDmoney, Stockal and Paasa, among others, facilitate this. Investors can also open an account directly with a large global broker such as Interactive Brokers (IBKR).
However, you must evaluate the cost of remitting money abroad and then getting it back and cross-border succession because foreign assets do not pass on to your family the way they do in India. Here is how different options compare.
How platforms operate
Broker intermediaries that facilitate investing abroad for Indian residents tie up with a US broker at the backend like IBKR, DriveWealth and ViewTrade and don't hold your shares. Your trades are executed and held by the foreign broker. The Indian platform handles onboarding, paperwork, transactions and tax statements.
Most platforms are registered in GIFT City and regulated by the International Financial Services Centres Authority (IFSCA). Large brokerages Zerodha, Groww and Upstox recently secured IFSCA licences to operate as intermediaries.
Third-party platforms like Paasa and bank brokerages such as ICICI Direct, HDFC Securities and Kotak Securities are not registered in GIFT City and offer no direct regulatory cover in India. They are regulated only in the US, so an investor has no Indian authority like IFSCA to turn to in a dispute, leaving it to the foreign broker and its US regulator to resolve.
However, your shares are protected by the foreign broker rather than an Indian entity. The US Securities Investor Protection Corporation covers up to $500,000 of assets per customer if the broker goes under. The difference between a GIFT City-registered platform and the one that is not is more for grievance redress than for the safety of your holdings.
Forex spread
There is not much difference in costs and the day-to-day experience either, since the holding broker is a foreign entity and the costs are set by each platform individually.
The single largest cost in global investing is the foreign exchange spread when converting rupees to dollars. The bank decides the markup, though platforms can negotiate cheaper rates with partner banks.
Nitish Sahni, founder of Paasa, said the platform offers a forex spread of ₹0.60 to 0.90 over the mid-market rate with its four partner banks – HDFC Bank, ICICI Bank, Axis Bank and IDFC First Bank, with the exact markup depending on which bank a customer uses. Customers of other banks pay the interbank rate, which also applies when you remit the sale proceeds to India.
Spreads on platforms like Vested and INDmoney are relatively higher – up to ₹1.25, or 1.2% to 1.5%, across their partner banks. GST of 18% applies to the markup in every case, and most platforms fold it into the rate. Viram Shah, co-founder and CEO of Vested Finance, said a customer can spend about 3% on forex spreads for both-side remittances.
When opening an account directly with IBKR, remittance charges turn out to be the biggest cost. The conversion rate is your bank's standard interbank rate, which runs at about 1.8% to 3% over the mid-market rate, roughly 30 to 200 basis points more than what platforms negotiate.
Sahni said people can ask the bank for a lower rate when the transfer amount is large, but that requires a branch visit and filling out LRS compliance forms, which is automatic in the case of net banking. On top of the forex spread, banks levy a flat remittance fee of ₹500 to ₹1,000 plus GST each time money is remitted.
Where IBKR pulls ahead is on the cost of trading. Under its tiered plan, it charges $0.0035 a share on US stocks and exchange traded funds, capped at 1% of the trade value, with a minimum of $0.35 an order. When combined with other smaller charges like pass-through exchange and clearing fees and US regulatory charges when you sell, the total cost works out to 0.03%-0.08% of the trade value.
Third-party platforms charge a brokerage of 0.1% to 0.25% (capped at $25 to $35) plus a withdrawal fee that varies across platforms (see graphics), which makes their trading cost several times higher than IBKR's.
Process of transfer
Since the assets are held outside India, your family will not have easy access to them if something happens to you.
"The heir must satisfy both the Indian broker's process and the foreign custodian's requirements," said Alay Razvi, managing partner at Accord Juris.
There is no concept of a nominee in the US. Some platforms, especially those registered in GIFT City, let you add a beneficiary, the US equivalent of a nominee, but it does not guarantee that your heir receives the shares smoothly. Platforms such as Vested and INDmoney offer an option to add a nominee, and you should do so since it is the single most helpful step you can take.
“In the event of the account holder's death, the nominee is the person through whom control of the account and access to the assets is processed,” said Ashish Kashyap, founder of INDmoney.
When the account holder dies, the beneficiary must contact the platform to start the transfer. Shah of Vested Finance said they ask for proof of identity of the beneficiary along with the account holder’s death certificate.
Tanmay Banthia, a partner at TARAksh Lawyers and Consultants, said the IFSCA framework does not have transmission rules of its own, so most platforms follow the market regulator’s circulars by analogy, adapted to the GIFT City context.
"The nominee will typically be asked for a death certificate, nominee KYC, a succession certificate or probate, and an indemnity bond if required," he said.
The nominee may also be asked to open an account on their platform, so the shares move across as securities rather than be sold and remitted as cash.
"If we send funds from one person's account to be credited into another person's Indian bank account, it becomes tricky under the LRS, and our partner bank prefers not to process such a third-party transfer," said Shah.
The process gets considerably harder without a nominee. Validating a claimant's eligibility is difficult and far more documentation is required, including a legal document proving the right to distribute the estate, a signed letter of instruction from the executor where there is a will, and a duly filled letter of authority.
When a platform does not allow nominees, you can open a joint account with a spouse, parent, adult child or sibling and tell them about your overseas holdings. Sahni said this is the easiest route.
"A joint account carries a rights of survivorship clause, so if anything happens to you, the other holder can withdraw the money or keep operating the account," he said.
Varun Kalsi, director of private client practice at Cyril Amarchand Mangaldas, cautioned that this does not make the surviving holder the legal owner, though it eases transmission compared with the ambiguity of competing heirs.
"The eventual distribution still follows succession law, not whoever is named on the account," he said.
Moreover, a joint account also adds compliance work as the other holder must declare it in Schedule FA (foreign asset) of their tax return.
The only alternative to a joint account is to add a trusted contact, which serves solely as a communication point in an emergency. IBKR does not allow a beneficiary, so one should ensure to at least add a trusted contact.
Also note that US estate tax applies when US-situated assets above $60,000 ( ₹56.6 lakh) are held at death. The heir must file a federal estate tax return within nine months and pay tax of 18% to 40%.
As fintech platforms make cross-border investing easy and cost-efficient, ensuring the money reaches your heirs without a cross-border tangle is the part that customers must get right. Add a beneficiary or a joint holder when allowed, make your holdings accessible to your family and check whether your assets overseas exceed the $60,000 estate tax line.