How to Invest in German Stocks from India

Germany is home to some of the world’s most established listed companies, including Siemens, SAP, BMW, Mercedes-Benz, BASF, and Allianz.

For Indian investors exploring international markets, Germany represents a developed, regulated ecosystem shaped by transparency, fiscal discipline, and industrial depth. It is a market where performance is often measured by stability and governance rather than momentum.

This guide explains how Indians can invest in the German stock market, the available routes under RBI’s Liberalised Remittance Scheme (LRS), and practical ways to gain exposure through Frankfurt- and Xetra-listed stocks, UCITS ETFs, ADRs, and India-domiciled international funds.

Table of contents

• Can Indians invest in Germany directly?
• Directly buy Frankfurt/Xetra-listed stocks
• US-listed ADRs of German companies
• UCITS ETFs with Germany exposure (LSE / Xetra / Euronext)
• India-domiciled funds & ETFs with Germany or Europe exposure
• Taxation: How Your Returns Are Treated in India
• Why consider investing in Germany?
• Platforms that help Indians invest in Germany
• Conclusion
• FAQs

Can Indians invest in Germany directly?

Yes. Indians can invest directly in Frankfurt Stock Exchange (Xetra)–listed stocks and ETFs through the Liberalised Remittance Scheme (LRS), which allows up to USD 250,000 per person per financial year to be invested abroad.

German blue-chip stocks can be bought directly on Xetra, the electronic platform of the Frankfurt Stock Exchange. Through global brokers like Paasa or Interactive Brokers (IBKR), Indian investors can purchase leading DAX 40 companies such as Siemens, SAP, BMW, Mercedes-Benz, and BASF under the RBI’s Liberalised Remittance Scheme (LRS).

This means an Indian investor can open an account with a global broker like Paasa, remit funds abroad using the correct purpose code for equity investment, and legally purchase Germany-listed equities or ETFs.

The four practical routes to gain exposure to the German market are:

• Directly buy Frankfurt/Xetra-listed stocks
• US-listed ADRs of German companies
• UCITS ETFs with Germany exposure (LSE / Xetra / Euronext)
• India-domiciled funds & ETFs with Germany or Europe exposure

Important to know:

• The annual LRS limit is USD 250,000 per individual.
• Remittances above ₹10 lakh per financial year attract TCS (Tax Collected at Source), tracked PAN-wise and
• collected by your bank when you remit.
• All foreign assets must be disclosed in your Indian Income Tax Return (ITR) under the foreign-asset schedule (FA/FSI).

Directly buy Frankfurt (Xetra)-listed stocks

The Frankfurt Stock Exchange (FSE) is Germany’s primary stock market, operated electronically through Xetra – one of Europe’s most liquid and efficient trading systems.

It includes global blue-chip companies like Siemens, SAP, BMW, Mercedes-Benz, BASF, Allianz, Bayer, and Volkswagen, all part of Germany’s flagship DAX 40 index.

Indian investors can use global brokers such as Paasa or Interactive Brokers (IBKR) under the RBI’s Liberalised Remittance Scheme (LRS) to buy Germany-listed equities directly in euros (EUR).

Key points:

• Dividends: Germany levies a 26.375% withholding tax on dividends paid to non-residents (25% + 5.5% solidarity surcharge). Under the India–Germany tax treaty, this can be reduced to 10% by filing a reclaim with the German Federal Central Tax Office (BZSt) using your Tax Residency Certificate (TRC) and Form 10F.
• Capital gains: Non-residents are not subject to German capital gains tax on disposals of listed shares. Gains are taxable only in India as short- or long-term capital gains depending on the holding period.
• Currency: Shares trade in euros (EUR), giving diversification away from both INR and USD exposure.
• Stamp Duty: There is no stamp duty or financial transaction tax on the purchase of listed German shares, making Germany one of the most cost-efficient markets for direct equity investing.
• Compliance: Investments must be funded under the LRS limit of USD 250,000 per individual per financial year, using the correct purpose code (S0001 – Investment in equity shares abroad).

Pros:

• Direct ownership of Germany’s globally recognised blue-chip companies.
• No German capital gains tax for non-residents.
• Stable, dividend-focused companies with transparent EU regulation.
• No stamp duty or transaction tax on listed equities.
• Fully compliant and recognised under FEMA / LRS.

Cons:

• A 26.375% dividend withholding tax applies upfront (refundable to 10% via treaty).
• Returns are exposed to EUR–INR currency fluctuations.

US-listed Germany ETFs & ADRs

Another practical way for Indian investors to gain exposure to German equities is through ETFs and ADRs listed in the United States.

US-listed Germany ETFs track the performance of the German equity market while trading on American exchanges such as the NYSE or Nasdaq. The most popular examples include the iShares MSCI Germany ETF (EWG), which covers large and mid-cap German companies across sectors like industrials, automotive, financials, and technology, and the Franklin FTSE Germany ETF (FLGR), which offers low-cost access to the broader German market. Investors seeking to reduce currency risk can also use the iShares Currency Hedged MSCI Germany ETF (HEWG), which offsets euro–dollar volatility.

ADRs (American Depositary Receipts) represent shares of German companies traded in the United States. These instruments give indirect access to Germany’s largest corporates such as SAP (SAP), Siemens (SIEGY), Allianz (ALIZY), BASF (BASFY), BMW (BMWYY), and Volkswagen (VWAGY), without trading directly on the Frankfurt Stock Exchange or converting 
INR to EUR.

For Indian investors, US-listed ETFs and ADRs offer a simple, liquid, and USD-denominated way to participate in the German market under the Liberalised Remittance Scheme (LRS).

Popular examples include:

ETFs

• iShares MSCI Germany ETF (EWG)
• Franklin FTSE Germany ETF (FLGR)
• iShares Currency Hedged MSCI Germany ETF (HEWG)

ADRs

• SAP (SAP)
• Siemens (SIEGY)
• Allianz (ALIZY)
• BMW (BMWYY)
• Volkswagen (VWAGY)

Key points:

• Regulation: US-domiciled ETFs and ADRs are regulated by the U.S. Securities and Exchange Commission (SEC) and trade in USD on major American exchanges.
• Accessibility: Available through most global brokerage platforms such as Paasa, Interactive Brokers (IBKR), or Charles Schwab International; no need for EUR accounts or Frankfurt/Xetra access.
• Dividends: Subject to 26.375% German withholding tax, reduced to 10% for Indian residents under the India–Germany Double Taxation Avoidance Agreement (DTAA) when the required documents (TRC and Form 10F) are filed.
• Capital gains: Not taxed in Germany or the U.S. for non-resident investors, unless they hold at least 1% of the company or the company derives more than 50% of its value from German real estate; taxable in India as short-term or long-term capital gains depending on the holding period.
• Currency: All trades, dividends, and settlements occur in USD, simplifying cross-border transactions and removing euro exposure.

Pros:

• High liquidity and global recognition on U.S. exchanges.
• Simplified access for Indian investors already participating in U.S. markets.
• ETF diversification across German industrial, auto, and tech leaders.
• USD-denominated instruments under a familiar regulatory environment.

Cons:

• 26.375% dividend withholding tax applies at source, reclaimable to 10% via DTAA.
• Expense ratios of ETFs (0.09%–0.50%) slightly lower net returns over time.
• ADRs of smaller companies may have lower trading volumes and wider spreads.

UCITS ETFs with Germany exposure (Europe-listed)

Another practical way for Indians to gain exposure to the German market is through UCITS (Undertakings for Collective Investment in Transferable Securities) ETFs domiciled in Ireland or Luxembourg.

UCITS ETFs are Europe-domiciled funds that allow investors to access international equities while being regulated under the UCITS framework. They trade on major exchanges such as the London Stock Exchange (LSE), Xetra (Germany), and Euronext (France/Amsterdam), and are designed for global investors seeking diversified, tax-efficient exposure to German and European markets.

For Indian investors, UCITS ETFs are often the cleanest and most tax-efficient way to invest in Germany. They handle dividend withholding at the fund level, provide broad exposure through single-country Germany ETFs or regional Europe-focused portfolios, and avoid complexities associated with U.S.-domiciled products.

Popular examples include:

• iShares Core DAX UCITS ETF (EXS1) – tracks the DAX 40 Index, offering exposure to Germany’s largest blue-chip companies.
• Xtrackers DAX UCITS ETF 1C (XDAX) – low-cost Ireland-domiciled ETF mirroring the DAX 40 Index.
• Amundi DAX UCITS ETF (DAXC) – provides diversified exposure to leading German industrial and consumer sectors.
• Lyxor MSCI Germany UCITS ETF (GER) – tracks the MSCI Germany Index for broader mid-cap inclusion.
• iShares MSCI Germany UCITS ETF (CSNDX) – Ireland-domiciled ETF offering EUR and USD share classes.

Key points:

• Domicile and regulation: Typically domiciled in Ireland or Luxembourg, regulated under the UCITS Directive, and listed on LSE/Xetra/Euronext in EUR, USD, or GBP.
• Availability on Paasa: UCITS ETFs are accessible under the RBI’s LRS via Paasa, offering seamless onboarding, consolidated reporting, and custody under top-tier European exchanges.
• Underlying German dividends: Dividends from German holdings are subject to 26.375% German withholding tax at the fund level. The ETF handles this internally, so Indian investors receive distributions (if any) net of this deduction.
• Tax in India: Dividends received from UCITS ETFs are taxable at the investor’s slab rate, while capital gains are taxed in India based on the holding period (short-term or long-term).
• Estate tax: UCITS ETFs have no U.S. estate-tax exposure, since they are EU-domiciled and not considered U.S.-situs assets.

Pros:

• Tax efficiency: UCITS structures avoid U.S. estate tax and manage withholding taxes internally.
• Diversification: Access to Germany’s DAX 40 or MSCI Germany indices through global issuers like iShares, Xtrackers, and Amundi.
• Regulatory credibility: UCITS funds follow strict EU investor-protection standards.
• Currency flexibility: Many ETFs offer EUR, USD, or GBP share classes.

Cons:

• Accessibility: Some Indian platforms focus on U.S. markets and don’t provide direct UCITS access. Paasa enables this with full compliance and reporting.
• Liquidity: On-exchange liquidity can be lower than U.S.-listed ETFs, particularly on Euronext or Xetra.
• Currency exposure: UCITS ETFs trade in EUR, USD, or GBP, so FX fluctuations can affect INR returns.

India-domiciled funds & ETFs with Germany or Europe exposure

A fourth route for Indians to gain exposure to the German market is through India-domiciled international mutual funds and ETFs that invest in overseas master funds holding German or broader European equities.

These schemes are SEBI-regulated and denominated in INR, allowing investors to participate without using the RBI’s Liberalised Remittance Scheme (LRS). The Indian Asset Management Company (AMC) collects investments in rupees and channels them to a foreign feeder or master fund, which then invests in underlying German and European securities.

For many investors, this is the simplest, fully domestic route to participate in developed-market equities while remaining within India’s regulatory system.

Popular examples include:

• Edelweiss Europe Dynamic Equity Offshore Fund – invests in the JPMorgan Funds – Europe Dynamic Fund (includes around 20–25% exposure to Germany).
• PGIM India Global Equity Opportunities Fund – feeder fund investing in the PGIM Jennison Global Equity Fund with allocations to German industrials and financials.
• ICICI Prudential Global Advantage Fund (FoF) – invests across global markets including Europe and Germany through multiple international equity funds.
• Franklin Asian Equity Fund – provides partial exposure to European markets including Germany through diversified regional holdings.

Key points:

• Structure: SEBI-registered feeder or fund-of-fund schemes that invest in overseas master funds under RBI’s overseas investment limits for AMCs.
• Currency: Investors subscribe and redeem in INR; the AMC manages all foreign exchange conversions and cross-border compliance internally.
• Taxation: Returns are taxed in India as domestic mutual funds, capital gains depend on holding period (long-term > 36 months = 20% with indexation; short-term = slab rate). Dividends, if any, are taxed at the investor’s slab rate.
• Convenience: No LRS paperwork, no foreign broker account, and eligibility for SIP or STP investment modes.
• Exposure: Underlying allocation to Germany may vary by fund; most “Europe” or “Global” schemes typically hold 15–25% in German equities.

Pros:

• No LRS remittance or foreign-broker setup required.
• Rupee-denominated; easier tax reporting and SIP flexibility.
• SEBI oversight and Indian investor-protection framework.

Cons:

• Indirect exposure: Fund managers allocate dynamically; Germany weighting may change over time.
• Higher expense ratios due to dual management layers (domestic + master fund).

Taxation: How Your Returns Are Treated in India

When investing in Germany from India, returns are subject to two layers of taxation: foreign-side taxes, which include any withholding or capital gains taxes levied by Germany or the fund’s domicile country, and Indian taxation, which is the final liability when you file your Income Tax Return (ITR) in India. This structured comparison mirrors the Paasa layout and covers the four practical routes.

Foreign-side taxes

Indian Taxation and Compliance
Assuming the investor is a resident individual in India (FY 2025–26 rules):

Why consider investing in Germany?

Global industrial backbone
Germany is home to some of the world’s most respected industrial and technology companies such as Siemens, BMW, Mercedes-Benz, Volkswagen, SAP, BASF, and Allianz. Its economy is driven by engineering excellence, export strength, and leadership in advanced manufacturing and automation.

Dividend consistency
While yields are moderate compared to the UK, Germany maintains a steady dividend culture. DAX 40 companies typically offer 2–4% yields, with consistent payouts from blue-chip names like Siemens, BASF, and Allianz.

Economic resilience
As Europe’s largest economy, Germany combines manufacturing depth with fiscal discipline. It operates within the eurozone with a low-debt profile, strong infrastructure, and a long record of stability.

Tax clarity
Capital gains on listed shares are exempt for non-residents, and dividend taxation is clearly structured at 26.375%, reduced to 10% under the India–Germany DTAA when proper documentation is filed.

For Indians
Investing in Germany provides access to Europe’s most productive economy with exposure to automobiles, chemicals, technology, and insurance. It complements Indian portfolios by adding developed-market stability, strong governance, and euro-based diversification.

Platforms that help Indians invest in Germany

There are multiple platforms through which Indian investors can access German-listed stocks, ETFs, and ADRs. Some offer direct trading access to the Frankfurt Stock Exchange (FSE) and Xetra, while others provide indirect exposure through U.S.-listed ADRs or UCITS ETFs domiciled in Europe.

Below is a comparison of the leading options available to Indian investors.

FAQs

Is it legal for Indians to invest in German stocks?
Yes. Under the RBI’s Liberalised Remittance Scheme (LRS), resident Indians can invest up to USD 250,000 per financial year in foreign securities, including German-listed stocks and ETFs on exchanges such as Frankfurt and Xetra.

What is the maximum limit for investing in Germany from India?
Each Indian resident can remit up to USD 250,000 per financial year under LRS. Families can combine allocations by remitting separately under each member’s individual limit.

Do I need special approvals to invest in German markets?
No. You only need to remit funds through an authorised dealer bank under LRS using the correct purpose code S0001 (Purchase of foreign equity shares). No additional RBI or SEBI approval is required.
What are the main ways Indians can invest in Germany?
There are four practical routes: 

1) Direct Frankfurt- or Xetra-listed stocks 

2) US-listed ETFs and ADRs of German companies 

3) UCITS ETFs with Germany exposure (listed on Xetra, LSE, or Euronext) 

4) India-domiciled mutual funds and ETFs with Germany or Europe exposure.

Are German dividends taxable for Indian investors?
Yes. Germany levies a 26.375% withholding tax on dividends (25% + solidarity surcharge). Under the India–Germany Double Taxation Avoidance Agreement (DTAA), this can be reduced to 10% when a valid Tax Residency Certificate (TRC), Form 10F, and self-declaration are submitted.

Is there capital gains tax in Germany?
No. Non-residents are exempt from German capital gains tax on disposals of listed shares when their holding is below 1% and not tied to a German permanent establishment. Gains must still be declared in India and are taxed at 12.5% (LTCG > 24 months) or slab rate (STCG ≤ 24 months).

Do German companies pay regular dividends?
Yes. Leading German blue-chip companies such as Siemens, SAP, BASF, BMW, and Allianz maintain consistent payout ratios. Dividend yields on the DAX 40 index typically range between 2% and 4%.

Is there any transaction tax or stamp duty in Germany?
No. Germany does not impose a financial transaction tax or stamp duty on the purchase of listed shares. Investors only incur brokerage and exchange fees through their trading platform.

Do I face any inheritance-tax risk when holding German shares?
Only for large shareholdings. Germany levies inheritance tax on German-situs assets such as real estate or shareholdings of 10% or more in German companies. Ordinary listed holdings are not subject to this tax.

Do I need a German bank account to invest in Frankfurt or Xetra?
No. Global brokers such as Paasa or Interactive Brokers (IBKR) manage settlement, custody, and currency conversion in EUR or USD under RBI’s LRS framework. No German bank account is required.

Which route is most tax-efficient for Indian investors?
UCITS ETFs domiciled in Ireland or Luxembourg are typically the most tax-efficient. They avoid German estate tax exposure, automatically handle underlying dividend taxation, and provide diversified access to German and European equities in EUR, USD, or GBP.

Do I need to report German investments in my Indian tax return?
Yes. Indian residents must disclose all foreign holdings, including German stocks, ETFs, and brokerage accounts, in Schedule FA of ITR-2 or ITR-3, along with foreign income in Schedule FSI and TR.

Can NRIs or Indian expats invest through Paasa?
Yes. NRIs and expats can invest through Paasa’s global network. Since their funds are already held abroad, LRS limits do not apply, and taxation depends on their country of residence.

Does Paasa support investing in Germany end-to-end?
Yes. Paasa provides direct access to Frankfurt- and Xetra-listed stocks, US-listed ADRs, and UCITS ETFs. It manages LRS remittance, FX conversion, DTAA documentation, and INR-based reporting, making German investing simple and fully compliant for Indian investors.

Conclusion

For Indian investors, Germany represents a balance of innovation, stability, and global reach. It combines the strength of a developed economy with leadership in manufacturing, engineering, and technology, offering access to companies such as Siemens, BMW, SAP, and BASF. Alongside these blue-chip names, investors can participate in diversified exposure through UCITS ETFs and ADRs that capture the broader European opportunity.

Investing in Germany has also become easier and more transparent. Whether through direct Frankfurt or Xetra listings, UCITS ETFs, U.S.-listed ADRs, or India-domiciled international funds, every route is well-structured and compliant under RBI’s Liberalised Remittance Scheme (LRS). The right choice depends on each investor’s objective, preferred currency exposure, and comfort with taxation and reporting.

Paasa enables this with precision. Its end-to-end FEMA and LRS compliance, tax-ready INR reporting, and integrated remittance support make investing in Germany simple, compliant, and fully aligned with Indian regulations, all from a single global platform built for Indian investors.

About Paasa

Paasa is India’s gateway to global investing. It is trusted by HNIs, family offices, and institutions to diversify across markets in the US, Europe, China, Japan, and beyond.

What makes Paasa unique is its India-focused compliance layer that operates seamlessly behind every transaction:

• FEMA and LRS compliance are built in, ensuring every cross-border investment stays fully within RBI regulations.
• Tax reports and analytics are designed for Indian investors, covering LTCG, STCG, dividend taxation, and TCS tracking.
• Remittance and reconciliation support are handled end to end, with dedicated guidance for compliance and reporting.

From global equities and ETFs to UCITS funds, managed portfolios, and RSU estate planning, Paasa offers one transparent platform that enables Indians to build international portfolios confidently while staying compliant at home.

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Disclaimer

This blog is intended for informational purposes only and should not be interpreted as investment, tax, or legal advice. The content reflects publicly available information and Paasa’s understanding of current regulations, which may evolve over time. Investing in international markets involves risks, including currency fluctuations, regulatory changes, tax considerations, and market volatility. Past performance is not indicative of future results. Readers are encouraged to consult their financial, tax, and legal advisors before making any investment decisions.