Investing In Foreign Alternative Assets From India

Think beyond stocks and gold. Investing abroad opens doors to exciting opportunities that most Indian investors never explore. While traditional assets like bank deposits and real estate dominate our portfolios, smart money flows into alternative investments across global markets.

You don't need millions to start. Some platforms let you begin with just $10. This guide shows you how to access foreign alternative assets from India, even on a tight budget.

What are alternative investments?

Alternative investments go beyond the usual suspects. They include:

• Debt financing and peer-to-peer lending
• Private equity and venture capital
• Hedge funds and commodities
• Fractional real estate ownership
• Project financing platforms

These assets behave differently from stocks and bonds. They often provide steady income streams and help spread risk across your portfolio.

Until recently, only wealthy individuals and institutions could access these investments. High minimum amounts and complex regulations kept regular investors out. That's changing fast.

Why invest in foreign countries matters now

Investment in foreign stocks and alternative assets protects you from local market swings. When Indian markets face trouble, your foreign investments can still perform well.

Currency diversification adds another layer of protection. If the rupee weakens, your dollar or euro investments become more valuable in Indian currency.

Foreign markets also offer opportunities that don't exist in India. You can invest in US tech startups, European renewable energy projects, or Latin American real estate - all with small amounts.

How RBI's LRS enables foreign investment

The Reserve Bank of India allows residents to invest up to $250,000 annually abroad through the Liberalized Remittance Scheme (LRS). This covers most alternative investment needs for retail investors.

Here's what you can do under LRS:

• Buy foreign debt securities
• Invest in overseas funds
• Purchase foreign real estate
• Fund international business projects

Direct lending to individuals abroad isn't allowed. But investing in debt securities through platforms is perfectly legal. This opens up peer-to-peer lending and project financing opportunities.

Top foreign alternative asset platforms for Indian investors

Yieldstreet: diversified alternative investments

Yieldstreet launched in 2015 and has become a major player in alternative investments. The platform focuses on generating steady income across different asset classes.

Numbers tell the story:

• Over $1.7 billion in total investments
• More than $1 billion returned to investors as principal and interest
• Minimum investment starts at $1,000

You can choose from their multi-asset class fund or shorter 3-6 month offerings. The platform covers real estate, marine finance, legal, and art investments.

Example: Instead of buying expensive art pieces directly, you can own a fraction of blue-chip artwork for $1,000. When the art sells, you get your share of profits.

Crowdestor: european project financing

This Estonian platform started in 2017 and offers crowd-based funding for real estate and business projects across Europe.

Platform highlights:

• Total investments exceed €54 million
• €23.8 million returned to investors
• Average investor yield of 20.2% per year
• Minimum investment of just €50

Crowdestor's portfolio goes beyond real estate. You'll find energy projects, restaurants, movie production, and tech startups. Each project comes with detailed information about risks and expected returns.

Example: You could invest €100 in a solar farm project in Estonia. The project pays 12% annually over three years. Your €100 becomes €140 by the end.

PeerBerry: accessible european lending

Operating from Latvia since 2017, PeerBerry focuses on peer-to-peer lending across Europe. The platform works with Aventus Group to originate loans.

Key features:

• Start with just €10
• Nearly €600 million in total investment volume
• Auto invest feature for hands-off investing
• Loans across multiple European countries

The Auto Invest tool sets your investment criteria automatically. You choose loan grades, countries, and loan terms. The system invests in suitable loans as they become available.

Example: Set Auto Invest to target a 15% annual return on loans from borrowers with good credit scores. Your €500 gets spread across 50 different €10 loans automatically.

Investment in foreign mutual funds: the stepping stone

Before diving into alternative platforms, consider foreign mutual funds. Several Indian fund houses offer international funds that invest abroad.

Popular options include:

• US equity funds
• Global technology funds
• Emerging market funds
• International bond funds

These funds provide easier access to foreign markets. You invest in rupees, and the fund handles currency conversion and overseas regulations.

Investment in foreign mutual funds teaches you about global markets without the complexity of direct foreign investment. Start here if you're new to international investing.

How to invest in foreign stocks through Indian platforms

Major Indian brokers now offer international investing:

Zerodha Kite Global

• Invest in foreign stocks zerodha platform supports
• No minimum investment amount
• Direct access to US markets
• Transparent pricing structure

ICICI Direct Global

• Trade in the US and other international markets
• Research support for foreign stocks
• Integrated with your Indian trading account

HDFC Securities Global

• Access to major global exchanges
• Advisory services for international investing
• Seamless fund transfers

These platforms make investing abroad activities much simpler. You don't need separate foreign accounts or complex paperwork.

Using multi-currency accounts for seamless investing

European platforms like PeerBerry and Crowdestor need Euro IBAN accounts. US platforms require USD accounts. Opening foreign bank accounts as an Indian resident can be challenging and expensive.

Multi-currency accounts solve this problem. They provide local account details in multiple currencies without needing foreign bank relationships.

Benefits include:

• Euro, GBP, and USD account numbers
• Local banking details for each currency
• Faster fund transfers
• Lower conversion costs
• Single dashboard for all currencies

Example: You want to invest €1,000 in Crowdestor. Your multi-currency account provides German IBAN details. Transfer money from India to your Euro account, then fund Crowdestor directly. When you earn returns, money flows back to your Euro account seamlessly.

Managing risks in foreign alternative investments

Alternative investments carry unique risks:

Platform risk: The investment platform itself might face problems. Choose established platforms with strong track records.

Currency risk: Exchange rate changes affect your returns. A weakening dollar reduces your returns when converted to rupees.

Liquidity risk: Many alternative investments lock your money for fixed periods. Plan your cash flows carefully.

Regulatory risk: Foreign regulations can change, affecting your investments.

Credit risk: In debt investments, borrowers might default on payments.

Spread your investments across multiple platforms and countries. Don't put all your money in one type of alternative investment.

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Tax implications of foreign alternative investments

Foreign investment income faces specific tax rules in India:

Interest income: Taxed at your regular income tax rate. No special treatment.

Capital gains: Long-term gains (over 24 months) are taxed at 20% with indexation. Short-term gains are taxed as regular income.

Currency gains: Exchange rate profits are taxable as capital gains.

Foreign tax credit: You can claim credit for taxes paid abroad against Indian tax liability.

Keep detailed records of all foreign investments, including:

• Investment dates and amounts
• Currency conversion rates
• Income received
• Taxes paid abroad
• Sale proceeds and dates

Consider consulting a tax advisor familiar with international investments.

Building your foreign alternative investment portfolio

Start small and learn as you go. Here's a sample progression:

Beginner level (₹50,000-₹2,00,000):

• 70% in foreign mutual funds
• 20% in established platforms like Yieldstreet
• 10% in smaller platforms like PeerBerry

Intermediate level (₹2,00,000-₹10,00,000):

• 40% in foreign mutual funds
• 30% in direct foreign stocks
• 20% in alternative platforms
• 10% in experimental investments

Advanced level (Above ₹10,00,000):

• 30% in foreign mutual funds
• 30% in foreign stocks
• 25% in alternative platforms
• 15% in specialized investments

Rebalance your portfolio every six months. As you gain experience, gradually increase alternative investment allocation.

Common mistakes to avoid

Chasing high returns: 20 %+ annual returns come with high risks. Understand what you're getting into.

Ignoring platform reputation: Research the platform's history, leadership, and financial backing before investing.

Currency timing: Don't try to time currency movements. Focus on the underlying investment quality.

Overconcentration: Spreading across too few investments increases risk. Diversify within alternative investments, too.

Neglecting due diligence: Read all platform documents, terms, and conditions carefully.

Getting started with your first foreign alternative investment

Ready to begin? Follow these steps:

1. Choose your first platform: Start with established options like Yieldstreet or PeerBerry
2. Set up currency accounts: Open a multi-currency account for smooth operations
3. Start small: Begin with the minimum investment amount
4. Track performance: Monitor your investments regularly
5. Learn and expand: Add new platforms and asset types gradually

Foreign alternative investments open new possibilities for Indian investors. With proper planning and gradual scaling, you can build a truly global investment portfolio that generates steady income and protects against local market volatility.

The key is starting simple, learning continuously, and expanding your comfort zone over time. Your future self will thank you for taking that first step into global alternative investments today.

Frequently asked questions about investing in foreign alternative assets from india?

1) Can I invest in foreign companies from India?

Yes, Indian residents can invest up to USD 250,000 per year in foreign stocks via the RBI’s LRS, using international brokers, Indian brokerages with global tie-ups, or international mutual funds and ETFs.

2) Can AIFs invest outside India?

Yes, Indian AIFs can invest up to 25% of their corpus abroad (within SEBI’s overall cap), but only in approved countries, with SEBI approval, and not in tax havens or FATF-blacklisted countries.

3) How to invest in SIF in India?

SIFs require a minimum ₹10 lakh investment, KYC, and are typically for HNIs or institutions. Invest via an AMC’s SIF platform after reviewing the fund’s strategy and documents.

4) What are the top 5 AIF funds in India?

• CCV Emerging Opportunities Fund-I

• Aarth AIF Growth Fund

• Finideas Growth Fund Scheme-1

• Golden Growth Fund (GGF)

• ICICI Venture Funds

Disclaimer: This blog is for informational purposes only and does not constitute financial or investment advice. Please consult a qualified financial advisor before making any investment decisions, especially regarding foreign assets, as these involve unique risks and regulatory considerations.

Contributed by Denila Lobo

Denila is a content writer at Winvesta. She crafts clear, concise content on international payments, helping freelancers and businesses easily navigate global financial solutions.