Invest in Japan & Taiwan: 5 LRS Rules You Must Know
Indian investors can legally put money into Japan, South Korea, and Taiwan stock markets using the RBI's LRS route. But the tax rules, currency risk, and account setup steps are things most people get wrong before they start.
Japan's Nikkei 225 has doubled since 2020 — your FD gave you maybe 30% in the same time.
Your LRS limit to invest abroad — most Indians never use it
Key Takeaways
Start with an international fund of funds (FOF) on any Indian MF platform — no overseas account, no forex wire, no paperwork needed.
Check your LRS usage for the financial year on your bank's net banking portal before initiating any direct overseas remittance for stocks.
Declare all foreign assets and income in Schedule FA and Schedule FSI of your ITR every year — non-disclosure attracts penalties under FEMA and the Black Money Act.
Indian investors can legally put money into Japan, South Korea, and Taiwan stock markets using the RBI's LRS route. But the tax rules, currency risk, and account setup steps are things most people get wrong before they start.
Here's what happened: RBI's Liberalised Remittance Scheme (LRS) allows every Indian resident to send up to $250,000 (~₹2.08 crore) abroad per financial year for investments.. Indian mutual funds now offer Japan, South Korea, and Taiwan-focused funds of funds, making direct foreign account setup unnecessary for most retail investors.. Gains from international mutual funds are taxed as debt funds in India — held under 24 months means slab rate tax; over 24 months means 12.5% LTCG without indexation..
What you should do: Start with an international fund of funds (FOF) on any Indian MF platform — no overseas account, no forex wire, no paperwork needed.. Check your LRS usage for the financial year on your bank's net banking portal before initiating any direct overseas remittance for stocks.. Declare all foreign assets and income in Schedule FA and Schedule FSI of your ITR every year — non-disclosure attracts penalties under FEMA and the Black Money Act..
TCS of 20% is collected by your bank on LRS remittances above ₹7 lakh in a year — but you can claim it back as a credit when you file your ITR, so keep the bank challan safe.
Explore TARA — Your Financial Co-Pilot
Retirement, tax, EMI, refinance and savings calculators — all free. Get a plan aligned to YOUR income, goals and CIBIL.
Try TARA — Free →References
- [1]“How can Indians invest in Japan, South Korea and Taiwan markets? Key risks and tax rules explained” mint - money · 25 Jun 2026
This article is reported by GoCredit's Editorial Team based on the source above. GoCredit synthesises, contextualises, and adds India-borrower-relevant analysis. We are not the original publisher.