Show HN: Digital KYC and Investing for Indian Expats by Inri (YC W23) | Hacker News Reader

Show HN: Digital KYC and Investing for Indian Expats by Inri (YC W23)

1 pointnish934 comments

There are many Indians living abroad, getting started and taking care of their Indian finances while abroad has been tricky and labor intensive.

We solve that problem through a wealth management platform only for Indian expats - https://www.goinri.com/

Our Launch HN post for more context - https://news.ycombinator.com/item?id=35389110

One of the trickiest parts for investors in this process has been KYC - Know Your Customer requirements by Indian financial institutions. For the longest time, Indians abroad were either required to submit physical paperwork or required to be in India to complete KYC to get started.

We have made this 100% online - You submit your docs in less than 5 mins and your KYC gets done in 3-4 working days.

The other problem for Indians abroad who have wanted to invest in India is not knowing where to start. For that, we curate investment options based on cross-border compliances (e.g. Not all mutual funds are open for US / Canada residents) and make the entire investment journey simple and personalized to your investment goals, like Wealthfront. Additionally, the platform also offers support for cross-border tax reporting and repatriation to solve for the full journey in a self-serve manner.

We know this is a bit of a niche product for HN but we saw a lot of great comments in our launch last time, so we would love to get your feedback on the product! Thank you!

This is a real problem, and you should take it as a vote in your favor.

There is a serious and large amount of ambiguous tax complications (form 8621) when an NRI tries to do this. I'd love to see more commentary on this on your landing page. Are you addressing it or is that your customer's responsibility?

After factoring in taxation on foreign assets by US gov and leakage due to weak INR, a repatriation situation looks very underwhelming. A 7% yield is more likely 3%. One is better of just putting $ in an index fund in the US unless one has decided to relocate to India in the long term and want to hold assets there. How do you folks think about this?

Yes we have written about 8621 in our blogs, we help in the documentation that individuals require to be compliant for FBAR and PFIC.

Post the zero interest rate regime, it's unlikely US will give that much return as it has in the last decade. AT the same time, India is in a better position vs last decade because foreign reserves are stronger, so depreciation probability is lower as well as fundamentals are better - RBI revised its growth forecasts upwards from 6% to 6.8%, capex to GDP has doubled in the last 7 years etc.

Overall, these factors make India a good diversification for X% of your capital, X can be higher if you choose to move to India, and lower if not, but it can be non-zero, provided the friction of investing is removed

Can you expand on how you help in the documentation? Mere guidance is not enough as the real advice afaik in the case of 8621 is to "hire a tax accountant". The trouble is that most tax accountants are not well versed in this as well so one's search is even harder.

Your point on India's growth rate likely to be higher than US is well received, but I want to understand something more tangible. Let's say I invest a dollar in India which grows at 7-8% risk free just using the FD instrument. At the end of each year though, US Gov will tax that growth at 30-40%. Next, If one repatriates that money, one loses even more value due to currency conversion. So in effect, your money grows at 4% most likely.

4% growth + tax paperwork hell seems imprudent. I'd like to learn what am I missing here? Many of my NRI friends don't bother investing in India. There is a serious lack of education in this regard.

8621 is hard because the calculations are complex and there are a lot of edge cases, however, once you codify those, it's just a formula. Hence, we use this formula to generate a filled 8621 (based on your inputs on your tax bracket + our calculations) document that you can attach with your 1099.

We have worked with CPAs exclusively focused on US-India taxes to develop expertise on this. This video from our last webinar may help - https://www.youtube.com/watch?v=InNW3OZY-Ig

Tbh, if you're just looking for FD, 8621 doesn't even apply. But assuming you want to capture india's growth, you would want to invest in index funds giving 12-13% return, for which 8621 will be applicable. An offline process for filing 8621 is truly a nightmare, hence we are making it online and simpler.

Reply on news.ycombinator.com