STEPS FOR THE SHORT-TERM
Redesignate all existing bank accounts from their resident status to non-resident ordinary (NRO) accounts which helps credit local funds like rents, dividends, etc. Also, open a non-resident external (NRE) bank account through which money can be freely moved in and out of the country without any restrictions. Also, redesignate your mutual fund portfolios and demat accounts as non resident and link them to your NRO account.
If you wish to continue to buy and sell equity shares whilst overseas, open a portfolio investment scheme (PIS) account.
You can retain or give up your health coverage depending on how long you wish to stay abroad. Since most life insurance covers are global in nature, they can be continued. However, remember that term insurance in many developed countries are cheaper than those in India, so you can consider buying a fresh policy when you move.
You can set up electronic instructions for automatic debits of your monthly loan repayments and and other utility payments.
It is pertinent to point out that different countries have different taxation and investment rules and that the country you move to may or may not have double tax avoidance arrangements with India. Your investment strategies may need to be aligned accordingly and hence, it will be wise to seek professional tax advice from an advisor. For example the returns on NRE deposits are tax free in India, and thus if you are based in the UAE which also does not have tax to be paid, the returns are truly tax free.
In addition to the tax treatment, you may also need to report assets held internationally to tax authorities in India as noncompliance could create complications.
Depending on where you wish to settle, revisit your financial goals so that your investment portfolio is aligned to your goals both in the short term and longer term. While making a decision, choose the asset class and investment product carefully. Remember that as a non-resident, you cannot invest everywhere. For example, as a non-resident you cannot purchase agricultural land or farmhouses. A large number of mutual funds do not allow investments from US and Canadian residents.
Also, make sure your succession planning is prepared with succession laws in India and your country of residence in mind. Be extra vigilant on how your country of residence treats guardianship of young children and ensure that you have created a robust estate plan.
Founder, Plan Ahead Wealth Advisors