International Equities Compare

Additional Useful Information

• An investor can buy “Shares” of these stocks. These shares can be purchased at a price which is called the “Share Price”. The price of these shares keeps changing daily.

• The investor can sell these shares anytime at the share price prevailing on the day of the sale.            

• Total Purchase Amount	=	Number of Shares X Share Price as on the day of purchase
  Total Sale Amount	=	Number of Shares X Share Price as on the day of sale
  Total Gain	=	Total Sale Amount – Total Purchase Amount

• Overseas investment by Indian residents is regulated by the Indian exchange control regulations.

• Indian residents can invest in shares of foreign companies listed on international stock exchanges, provided their ownership in these companies stays below 10%.

Returns *

• International Equities do not guarantee any returns. They are subject to market risks.

• Investment in international equities can generate returns for the investors in two forms –
• The first source - When investors sell their securities, the difference between the Sale Amount and Purchase Amount is typically called “Capital Gain” or “Capital Loss” (if sale amount is lesser than the purchase amount).
• The second source - Dividend payments.

• International Equities have the potential to generate above average returns over a long holding period.

• Returns depend on and vary between individual stocks.

Risk Level

• International Equities are categorized as very high-risk investments.

• A significant risk lies in currency exchange fluctuations. Variations in the Indian rupee’s value against the U.S. dollar can directly affect your investment returns.

• Stock prices can be affected by economic downturns or market instability in foreign countries, while investment performance is influenced by varying market cycles and regulations.

• Changes in regulation and legal system of that country can impact any investments made in international stocks.

Liquidity

• When an investor sells shares of these stocks, the sale amount will take up to 7 working days to be credited to the investor.

Interesting Facts

• When investing in international stocks, it’s crucial to understand different markets.
• Developed markets offer stability and lower risk. (e.g. US, UK, Germany)
• Emerging markets provide higher growth potential with increased risk. (e.g. Brazil, India)
• Frontier markets present high risk and high reward with limited liquidity. (e.g. Colombia, Indonesia)

• Investing in International Stocks gives exposure to many of the world's largest and most well-known companies, like Apple, Google, Amazon, and Tesla.

• Trading hours for international markets differ from Indian markets, providing opportunities for around-the-clock trading. For instance, the US markets normal trading operates from 7 PM to 1:30 AM IST. The London Markets are open from 1:30PM to 10:00 PM.

• Many brokerage platforms provide an option to buy fractional shares of US stocks. This allows you to invest in expensive stocks with smaller amounts of money, making it easier to diversify your portfolio and access a wider range of investment opportunities in the US market.

Tax Implications

• Earnings received from International Equities are taxable.

• When investors sell their International Equity Shares, the difference between the Sale Amount and Purchase Amount is typically called “Capital Gain” or “Capital Loss” (if sale amount is lesser than the purchase amount).

• The tax that the investor must pay on Capital Gain is –
• Situation 1 – If the international equities are sold within a period of 2 years from investment, the Capital Gains earned (called Short Term Capital Gains) are added to the taxable income of the investor and taxes are required to be paid based on the applicable income slab.
• Situation 2 - If the International equities are sold after a period of 2 years from investment, the Capital Gains earned (called Long Term Capital Gains) are taxed at 12.5% of the gain.

• There is no tax in case of “Capital Loss”.

• India has Double Taxation Avoidance Agreement (DTAA) with several countries to avoid double taxation on income. This means that if you have paid taxes in the country where the stocks are held, you can claim a tax credit in India for the taxes paid abroad, reducing your overall tax liability.

Where To Invest

• https://www.indmoney.com/us-stocks