Over the last few months, I’ve noticed a surprising trend—foreign companies, LPs, LLCs, and VC funds are struggling to open Demat accounts in India, even though the actual process is quite straightforward.
Here’s the real issue
Not the regulations. Not the compliances. Not the PAN requirement.
The real problem is lack of clarity and coordination.
Despite the process being simple, almost everyone involved—big law firms, consultants, and even dedicated Demat professionals—is working with assumptions instead of standard documentation requirements.
Instead of following the established process, people start creating their own document lists, adding unnecessary layers, and confusing foreign investors even more. As a result:
- Work that can be completed quickly ends up taking weeks or months
- Teams wait 10 days to respond to a simple query
- Foreign investors get stuck in paperwork loops
- The whole purpose of “ease of doing business” gets defeated
The truth is
Opening a Demat account for a foreign entity is not difficult. It only needs:
- The correct set of documents
- Proper sequencing
- Timely coordination
- Clear instructions
Nothing more.
A straightforward workflow
If we follow the standard process, the workflow is smooth:
- Apply for PAN
- Submit the required documents
- Demat account opens
- Shares get dematerialized
That’s it. No complications. No guesswork. No reinventing processes.
My view
The process isn’t broken—the communication is.
Clarity + responsiveness = efficiency.
Foreign firms don’t need complications; they need guidance rooted in simplicity.
As India moves toward full dematerialization and increased foreign participation, it’s important that we simplify the experience, not make it harder.