For years, a non-resident Indian who wanted to open a demat account or update mutual fund records had to complete part of the process while physically in India. On 4 November 2026 the Securities and Exchange Board of India (SEBI) removed that condition for most clients abroad. Its circular on the Know Your Client process for individuals resident outside India lets an NRI, an Overseas Citizen of India (OCI) or a foreign national complete NRI KYC by video from the country where they live, from 3 December 2026.
The change will save many clients a flight, but it moves the advisor's work rather than ending it. KYC proves who the client is and where they live. It does not decide which bank account the money must sit in, which tax declarations a fund house needs, or whether a particular fund will accept a US resident at all. Those questions now become the main source of delay, and an advisor can settle them before the client starts the video call. The same questions shape how an NRI client reaches each investment route, which our guide to GIFT City mutual funds and other global investment routes sets out in detail.
What the new NRI KYC rule changes
Until now, intermediaries had to confirm that an NRI client was located in India during KYC, and onboarding apps enforced this with geo-tagging. Business Standard reported in October 2025 that this created hurdles for investors living abroad, and SEBI's first proposal relaxed it only for the re-KYC of existing NRI clients. The final circular goes further. It covers new onboarding as well as re-KYC, and it extends the relaxation to OCI cardholders and foreign nationals, provided the client is located in a country that the Financial Action Task Force (FATF) treats as compliant.
The circular applies to every SEBI-registered intermediary, so stockbrokers, depository participants, mutual fund houses, portfolio managers and investment advisers all fall within it. It is a permission rather than an obligation. Intermediaries may offer the digital route, so a client should not assume that every platform will accept a video KYC on 3 December. KYC completed before that date stays valid under the earlier rules.
How the video verification works
SEBI calls the process Video In-Person Verification. The client consents on record, responds to random prompts that prove the session is live, and stays on an uninterrupted video that carries live GPS coordinates. The IP address must come from India or from an FATF-compliant country, and it must match the details on the KYC form and identity document. Intermediaries must block VPNs and spoofed locations, and an authorised official of the intermediary must be present during the session.
The client's PAN is checked against the Income Tax Department's database, so no original is needed. The client provides a passport copy, an OCI card where it applies, and one officially valid document that shows the current overseas address. Copies can be verified through DigiLocker, through Aadhaar authentication, or by attestation from a notary, an overseas branch of an Indian bank or the Indian embassy or consulate. An international mobile number is accepted once it is verified by OTP, and the intermediary must upload the completed record to a KYC registration agency within three working days.
Who stays on the old process
Clients who live in a country that is not FATF-compliant remain on the existing process, which still expects them to be in India. The circular decides compliance by reference to FATF's published material and does not name any country. Transclew noted on 5 November that it also does not say how countries on the FATF's list of jurisdictions under increased monitoring will be treated, so intermediaries may draw that line differently.
The relaxation is limited to individuals, so a family company, trust or partnership based abroad does not benefit from it. Foreign nationals who register as foreign portfolio investors also fall outside this circular and follow SEBI's separate FPI rules.
What KYC does not settle
The most common delay for NRI clients is not identity but residential status. When a resident moves abroad, the change has to be reported with a KYC change request, and AMFI notes that each intermediary must be updated separately. A mutual fund folio opened as a resident does not update itself. Clients who skip this step can find a transaction rejected later, often at the moment they want to redeem.
Bank accounts sit outside SEBI's change. NRE and NRO accounts are governed by the RBI's Master Direction on deposits and accounts, issued under the Foreign Exchange Management (Deposit) Regulations, 2016, and nothing in the KYC circular alters them. A client who wants to buy listed shares on a repatriable basis still needs a portfolio investment scheme permission from the bank, according to SEBI's investor education material on NRI investment.
Tax declarations also remain. Every new mutual fund account needs a combined FATCA and CRS self-certification that states the client's tax residence, foreign tax identification number, country of birth and nationality, as AMFI explains. For clients resident in the US or Canada, this declaration is where many applications stop, because many fund houses have chosen not to accept investments from those residents. Finally, the KYC record carries a status. According to HDFC Mutual Fund's KYC guidance, a record marked validated works across fund houses, while one marked registered or on hold can force the client to submit documents again or block payments until it is fixed.
Investments outside India follow their own checks
Many NRI clients ask the same advisor about investing outside India, and here the SEBI circular does not apply at all. The Liberalised Remittance Scheme is a facility for resident Indians, so it does not limit an NRI who invests abroad from overseas income, a point covered in our note on NRO repatriation for NRI clients in the UAE.
A US real estate offering runs its own onboarding. For an NRI client living outside the US, an investment in US commercial real estate typically sits under Regulation S, the SEC rule for offerings made outside the United States. The client completes the platform's KYC, signs the subscription documents and gives Form W-8BEN, which certifies foreign status for US tax. Indian clients invest through a US corporation, known as a blocker, that holds the property interest, and they typically receive Form 1042-S showing the US tax withheld. Raveum handles KYC, agreements and US tax forms on its platform, while the client's Indian tax position stays with the client and their CA.
None of this makes an investment safer. Private US real estate can lose capital, it is illiquid and usually cannot be sold before the property exits, distributions can be reduced or stopped, and property values, tenants leaving, leverage and the rupee-dollar rate all affect what the client ends up with. A smoother KYC removes friction from paperwork only, so the suitability conversation should come before any onboarding begins.
What advisors should do before 3 December
The practical work is to clear the questions that KYC leaves open, so that the video session becomes the last step rather than the first. Advisors who introduce eligible clients through Raveum's partner page will recognise the pattern, because every platform asks for the same identity facts but applies its own account and tax checks.
- Confirm each client's country of residence, and ask each platform whether it treats that country as FATF-compliant for the new process.
- Update residential status with every intermediary and fund house where the client holds a folio or demat account, and check that each KYC record shows as validated.
- Match each investment to the right account, NRE or NRO, and confirm that the bank's portfolio investment scheme permission is in place for listed shares.
- Prepare a fresh FATCA and CRS self-certification, and for US or Canada residents confirm in advance which fund houses will accept the client.
The circular removes a cost that had nothing to do with investing, and that is a real gain for families spread across countries. Identity is now the easy part, and the advisor's value lies in the residency, account and tax checks that decide where a client's money can go and on what terms. Our guide to GIFT City mutual funds and other global investment routes shows how those checks play out across each route an NRI client may consider.
Frequently asked questions
Can an NRI complete KYC without visiting India?
Yes, from 3 December 2026, if the client lives in an FATF-compliant country and the intermediary offers the digital route. SEBI's circular of 4 November 2026 allows KYC by video from abroad, with live GPS, IP checks and an authorised official present. Clients in other countries remain on the older process, which expects them to be in India.
What documents does an NRI need for KYC?
An NRI typically needs a PAN, a passport copy, proof of the current overseas address and a photograph, plus an OCI card where relevant. Copies can be verified through DigiLocker, Aadhaar or attestation by a notary, an Indian bank's overseas branch or the Indian embassy. Mutual funds also require a FATCA and CRS declaration.
Does the new SEBI KYC rule apply to OCI cardholders?
Yes. The circular covers non-resident Indians, Overseas Citizens of India and foreign nationals, provided they are individuals living in an FATF-compliant country. An OCI cardholder gives a passport copy and the OCI card. Foreign nationals who register as foreign portfolio investors follow SEBI's separate FPI rules instead of this process.
How should a client update mutual fund KYC after becoming an NRI?
The client should file a KYC change request to update residential status from resident to NRI, then inform every fund house and intermediary separately, because folios do not update automatically. A new FATCA and CRS declaration and the correct NRE or NRO bank details are usually needed. Skipping this can lead to rejected transactions later.
Can NRIs in the US or Canada invest in Indian mutual funds?
Some can, but many fund houses do not accept investments from US or Canadian residents because of FATCA reporting, and others accept them only through certain channels or with extra declarations. Policies change, so an advisor should confirm each fund house's current position before the client completes KYC or moves any money.
Does easier KYC change the risks of investing abroad?
No. KYC confirms identity and address and says nothing about suitability. An investment in private US real estate still carries the risk of losing capital, illiquidity, falling property values, tenants leaving, reduced or paused distributions, leverage and currency movements. Advisors should complete the suitability discussion before a client begins any onboarding process.
This article is for general education and is not tax, legal or investment advice. Rules change and depend on individual circumstances. All investing involves risk, including loss of capital, illiquidity and currency movements. Offerings on Raveum are available to eligible investors only and are not open to the general public.
