You can update the existing mutual fund, which was bought under resident Indian tax status, to NRI status. It’s easier to update the KYC through platforms like CAMS or by mailing your respective mutual fund broker. This process is easier when you visit them physically during your next trip to India. Online or IPV (In Personal Verification) is possible, but so far, reviews for these methods haven’t been great.

An European NRI can invest in Indian mutual funds.

Buying and holding a mutual fund will not trigger taxes in India or Sweden. 

However, selling mutual funds may make you liable for taxes in India and Sweden. Your tax residence status and the tax treaty between the countries need to be checked. (It’s better not to sell mutual fund holdings while you are a resident in Sweden.)

Buy direct mutual funds by visiting the AMC (Asset Management Company) websites directly, such as ICICI Prudential Mutual Fund, HDFC Mutual Fund, PPFAS, etc., and purchase the funds directly.

Direct Stock in India for NRI:

We often focus on returns or doubling our money but rarely pay attention to tax planning and investing in a tax-efficient manner.

When I started my investing journey, I had Indian NRE Demat Accounts and NRO Demat Accounts and actively traded and invested. However, when it came to tax filing, reporting in both India and Sweden was extremely complicated.

For stocks held in a Demat account while you were a resident Indian, it’s better to either hold them by converting them to an NRO Demat account or gift them to your parents. This way, you avoid the complexities of tax reporting in both India and Sweden.

I do not recommend anyone to have an NRE or NRO Demat account for trading and F&O (Futures & Options) purposes, as it triggers complex tax reporting requirements in both India and Sweden. The time and effort spent are not worth it unless you are making significant profits (in lakhs or crores).

Many people use their parents’ Demat accounts for trading and F&O, as their parents are resident Indians, limiting tax reporting to India only.

Still, if you want to open an NRE or NRO Demat account, below is a snapshot from ICICI Direct explaining different types of accounts:

Additionally, Zerodha has provided material with a detailed explanation: