Indian investors looking to buy UCITS ETFs are often confused about the platform they should use, and the pros and cons of the available options.
This guide explores all you need to know about the platforms you can use to buy UCITS ETFs from India, including how they differ and the India specific features and support on offer.
Table of contents
- Why Indian investors are choosing UCITS ETFs
- How can Indians buy UCITS ETFs
- Paasa vs. IBKR
- How to buy UCITS ETFs using Paasa
- Understanding taxation on UCITS ETFs
- About Paasa
Why Indian investors are choosing UCITS ETFs
Indian investors are choosing UCITS ETFs over US ETFs because they give access to global markets (including the US) while providing tax and structural advantages that directly impact net returns.
Here are the two main reasons Indians are opting for UCITS ETFs:
1. Safeguarding against the US Estate Tax
This is the primary driver for Indian investors. If you hold US-domiciled assets (like US-listed stocks or ETFs) worth more than $60,000, you are subject to up to 40% US Estate Tax upon your death.
Since UCITS funds are legally domiciled in Europe (typically Ireland), they are not considered US-situated assets and are not subject to the US estate tax.
2. Tax deferral via accumulating structures
US-listed ETFs distribute dividends to shareholders. For an Indian investor, this payout triggers a taxable event every quarter, taxed at your income slab rate.
UCITS ETFs offer "Accumulating" classes. These funds automatically reinvest dividends internally without paying them out. This prevents a taxable event in India, allowing your capital to compound tax-free until you eventually sell the ETF.
For a deep dive into the advantages of UCITS, read our guide on Why Indian Investors Should Choose UCITS Over US ETFs.
How can Indians buy UCITS ETFs
Indians can buy UCITS ETFs using any international brokerage account that provides direct access to European stock exchanges, where these funds are legally domiciled and listed.
Currently, Interactive Brokers (IBKR) and Paasa are the two main platforms that provide Indian investors with this necessary access to European markets, allowing you to seamlessly invest in global UCITS funds.

Paasa vs IBKR
Interactive Brokers (IBKR) is built for institutional users and advanced traders. It operates on a do-it-yourself model, offering no India-specific tax documents or dedicated customer support.
Paasa is built for regular investors and family offices. Paasa uses IBKR as the underlying broker, and offers everything that IBKR does; along with India specific features like preferential INR USD conversion rates and tax and compliance support built for Indian regulations.
Here’s a quick tabular comparison to help you visualize the differences better:
Infrastructure
| Feature | IBKR | Paasa |
|---|---|---|
| Account Setup | Free | Free |
| Custody of assets under client's name | ✅ | ✅ |
| FEMA & LRS Support | ❌ | ✅ |
| Tax Reporting (India) | ❌ | ✅ |
| INR-based Returns & Analytics | ❌ | ✅ |
| Human Advisory | ❌ | ✅ |
| Onboarding Support | ❌ | ✅ |
| Remittance Integration | ❌ | ✅ |
| SIPC Insurance | ✅ | ✅ |
Note: With Paasa, accounts are held under your name at IBKR, ensuring full ownership, SIPC protection, and institutional-grade security.
Features
| Feature | IBKR | Paasa | |
|---|---|---|---|
| Direct trading | ✅ | ✅ | |
| Real-time execution | ✅ | ✅ | |
| Product Universe | Stocks | ✅ | ✅ |
| ETFs | ✅ | ✅ | |
| Managed Portfolios | ✅ | ✅ | |
| UCITS portfolios | ❌ | ✅ | |
| AIFs | ❌ | ❌ | |
| Interest on uninvested cash | ✅ | ✅ | |
Note: Brokerage fees remain the same as IBKR, Paasa does not charge any additional commission.
FEMA Compliance
| Feature | IBKR | Paasa | |
|---|---|---|---|
| Digital remittance under LRS | Self-declaration templates for Indian banks | ✅ | ✅ |
| Preferential FX rates | ❌ | ✅ | |
| Bank formalities & Holding Declaration | ❌ | ✅ | |
| Tracking and Confirmation | ❌ | ✅ | |
| Compliance queries | ❌ | ✅ | |
Tax Reporting
| Attribute | IBKR | Paasa | |
|---|---|---|---|
| Tax Analytics | Dividend Tax Tracking | ❌ | ✅ |
| Capital Gains Tax Calculation (STCG/LTCG) | ❌ | ✅ | |
| Accumulating ETFs | ✅ | ✅ | |
| Tax Loss Harvesting | ❌ | ✅ | |
| Year-End Tax Statement for Indian Investors | ✅ | ✅ | |
| UCITS portfolios for tax savings | ❌ | ✅ | |
Note: Global investing comes with added tax responsibilities for Indian investors, and platforms approach this differently. Paasa includes tools designed to support Indian tax reporting.
Technology Features
| Feature | IBKR | Paasa |
|---|---|---|
| Market and Limit | ✅ | ✅ |
| Stop loss, Trailing stop loss | ✅ | ✅ |
| Withdraw funds to any bank account | ✅ | ✅ |
| Mutual funds tracking | ❌ | ✅ |
| XIRR calculation for position | ❌ | ✅ |
| Benchmarking & Backtesting | ❌ | ✅ |
| INR gain/loss computation (blended FX) | ❌ | ✅ |
| Web dashboard for reporting | ✅ | ✅ |
| Trader Workstation (TWS) for advanced traders | ✅ | ❌ |
Client Support
| Feature | IBKR | Paasa |
|---|---|---|
| Dedicated relationship manager | ❌ | ✅ |
| Expert concierge (FEMA, Tax) | ❌ | ✅ |
| Customize features on request | ❌ | ✅ |
How to buy UCITS ETFs using Paasa
Paasa provides direct access to over 10 global exchanges, including the London Stock Exchange (LSE), Swiss Stock Exchange, German Stock Exchange, and French Stock Exchange.
Paasa also allows you to buy UCITS ETFs denominated in multiple currencies like USD, GBP, EUR, CHF, etc.
Here is the exact step-by-step process to get started:
- Download and Register: Download the Paasa app and create your account.
- Complete KYC: Complete your Know Your Customer (KYC) verification.
- Remit Your Funds: Use your Indian bank account to remit funds to your Paasa brokerage account under the RBI's Liberalised Remittance Scheme (LRS).
- Search and Buy: Once your funds reflect in your account, simply search for the specific UCITS ETF you want.
- Execute the Trade: Enter the amount you wish to invest and execute the trade. You can buy and sell ETFs and stocks directly through the app.
Understanding taxation on UCITS ETFs
When investing in UCITS ETFs, you should know how your returns are taxed both in the fund's home country and back in India.
Capital Gains Tax
When you sell your UCITS ETF units, the profit you make is your capital gain. Because you are buying these ETFs directly on a foreign exchange, they are classified as "unlisted foreign assets" under Indian tax laws.
Here is how your capital gains are taxed:
1. Taxation in the Country of Domicile
| Jurisdiction | Capital Gains Tax Rate | Note |
|---|---|---|
| Ireland / Luxembourg | 0% | Non-resident investors are completely exempt from local capital gains taxes in the fund's home country. |
2. Taxation in India
In India, the tax rate depends on how long you have held the asset before selling it.
| Capital Gain Type | Holding Period | Tax Rate in India |
|---|---|---|
| Short-Term Capital Gains (STCG) | Up to 24 months | Taxed at your applicable Income Tax Slab Rate. |
| Long-Term Capital Gains (LTCG) | More than 24 months | 12.5% (Flat rate, without indexation benefits). |
Dividend Withholding Tax (DWT)
If you invest in a Distributing (Dist) UCITS ETF, the fund will pay out dividends to your brokerage account. Here is how those dividend payouts are taxed:
| Jurisdiction | Dividend Withholding Tax | Details |
|---|---|---|
| Country of Domicile (Ireland) | 0% | Irish UCITS ETFs do not levy any dividend withholding tax on payouts to non-resident Indian investors. |
| India | Slab Rate | The dividend received is considered "Income from Other Sources" and is fully taxable at your applicable Indian income tax slab rate. |
Why Accumulating ETFs are Better:
While Ireland does not deduct any tax before sending you the dividend money, receiving that dividend still triggers a taxable event in India every time there is a payout.
If you choose an Accumulating (Acc) UCITS ETF instead, the fund automatically reinvests those dividends internally. Because the money never actually hits your brokerage account, it does not trigger any personal dividend tax liability in India. This allows your capital to compound completely tax-deferred until the day you finally decide to sell your shares.
About Paasa
Paasa is a global investing platform built specifically for Indian investors and powered by IBKR. It takes the institutional-grade engine of Interactive Brokers and wraps it in a user-friendly, locally compliant experience.
Here is why Indian investors prefer buying UCITS ETFs through Paasa:
- Zero Extra Cost: Paasa passes on IBKR’s transparent, low-cost brokerage fees directly to you. You get a significantly better experience without paying a single rupee in extra markups or platform fees.
- India-Specific Tax & FEMA Support: Investing globally requires navigating the RBI's Liberalised Remittance Scheme (LRS) and complex Indian tax laws. Paasa provides end-to-end support, including ready-to-use tax calculation documents that you can simply hand over to your CA at the end of the financial year.
- Best-in-Market FX Rates: Currency conversion eats into your returns if not managed properly. Paasa ensures you get institutional foreign exchange rates, maximizing the capital you actually deploy into the market.
- Dedicated Advisory and Support: Unlike standard global brokers where you are left to figure things out alone, Paasa offers dedicated relationship managers and advisory services tailored to the needs of Indian High Net Worth Individuals (HNWIs) and NRIs.
- Simplified Interface: You do not need to learn how to navigate a professional trading terminal. Paasa’s app makes finding and buying UCITS ETFs on European Stock Exchanges as intuitive as buying a domestic mutual fund.


