Private markets · Access · India
Can resident Indians invest in US pre-IPO companies?
Resident individuals invest abroad through the Liberalised Remittance Scheme (up to USD 250,000 a financial year) and the Overseas Investment Rules 2022. Buying unlisted foreign shares counts as overseas direct investment (ODI) whatever the stake, with conditions; investing through a foreign fund or SPV depends on whether it is a regulated overseas fund. Companies, LLPs and AIFs have separate routes.
Facts checked 7 Oct 2026 · By Dipankar Sarkar · Education only — not an offer
LRS limit
Resident individuals may remit up to USD 250,000 per financial year for permitted current and capital account transactions. LRS is not available to companies, partnerships, HUFs or trusts. Reserve Bank of India
Unlisted foreign shares are ODI
Under the 2022 regime, acquiring unlisted equity of a foreign company is overseas direct investment regardless of size. An individual may make ODI only in an operating company that is not engaged in financial services and has no subsidiary the individual controls, and not in prohibited sectors such as real estate or gambling. Economic Laws Practice
Overseas funds can be portfolio investment
Since a June 2024 RBI amendment, units or other instruments of an overseas investment fund that is regulated, or whose manager is regulated, in its home jurisdiction count as overseas portfolio investment within LRS. Whether a particular single-company US SPV qualifies is unsettled and needs advice and confirmation from your authorised dealer bank. Economic Laws Practice
TCS on LRS remittances
From 1 April 2026, remittances for investment carry no tax collected at source up to ₹10 lakh per financial year per PAN, and 20% above that. TCS can be credited against income tax. HDFC Bank
Companies and family-office entities
An Indian company or LLP may commit up to 400% of its net worth in ODI. Portfolio investment by Indian entities is capped at 50% of net worth and is largely limited to listed companies. IndiaCorpLaw
AIFs
Indian AIFs may invest in unlisted foreign companies within SEBI's overseas framework: up to 25% of a scheme's investable funds, within an industry-wide USD 1.5 billion limit allocated by SEBI. Treelife
This is a general summary of the rules as published, not legal or tax advice, and it does not tell you whether any particular investment is available or suitable for you. Rules change and turn on detail; take advice from a professional licensed in India.
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Frequently asked questions
- Can a resident Indian buy pre-IPO shares of a US company?
- Buying unlisted foreign shares is overseas direct investment, allowed within the USD 250,000 LRS limit only if the company is an operating business outside financial services, the individual does not control a subsidiary of it, and it is not in a prohibited sector. The authorised dealer bank handles reporting.
- Can an Indian investor use a US SPV instead?
- Possibly, if the SPV counts as a regulated overseas investment fund for portfolio investment under the June 2024 amendment. Many single-company SPVs may not, so get advice and your bank's confirmation first.
- Can a family office or HUF use LRS?
- No. LRS is for individuals. Family offices structured as companies or LLPs use the Indian-entity ODI and portfolio-investment routes.
Sources
- Reserve Bank of India — LRS FAQs (6 Apr 2023)
- Economic Laws Practice — Overseas Investment Rules 2022 (22 Aug 2022)
- Economic Laws Practice — RBI circular irons out two kinks in the overseas investment regime
- HDFC Bank — Revision in TCS on LRS transactions
- IndiaCorpLaw — What the ODI/OPI regime holds for Indian entities (5 Dec 2022)
- Treelife — SEBI AIF master circular, June 2026 (3 Jun 2026)
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