Mint Explainer: What are UCITS—and why Indian investors should consider them

For Indian investors eyeing opportunities beyond domestic borders, a sophisticated investment route is worth a closer look—UCITS, or Undertakings for Collective Investment in Transferable Securities. These European-domiciled funds are built for global reach and investor protection, making them an increasingly compelling choice for those seeking international diversification without regulatory complications.

UCITS offer a tax-efficient, transparent, and liquid pathway to global markets—without the downsides of directly investing in US securities.

Mint breaks down what UCITS are, how they work, and why they matter.

"UCITS are essentially pooled investment vehicles," explains Lovaii Navlakhi, managing director & CEO of International Money Matters, a firm offering financial consulatncy. “They are a European fund structure that enables investment vehicles to be established and distributed across multiple jurisdictions in the form of Exchange Traded Funds (ETFs).”

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Most UCITS are domiciled in Luxembourg and Ireland and listed on global exchanges—except in the US.

Why UCITS?

The appeal begins with structure. UCITS funds are domiciled in Ireland or the Netherlands, creating a tax-efficient framework for international investors—especially from India. This setup helps sidestep punitive US estate tax laws, which levy up to 40% on assets exceeding $60,000 for non-resident, non-citizen investors.

For Indian investors, that can translate into significant tax liabilities on global investments. By being domiciled in Europe, UCITS funds are technically not considered US assets, providing a strategic workaround.

Many parents begin saving when their child is four, and if they invest $15,000 annually, the portfolio can easily exceed $200,000 by the time the child is ready for college abroad, explains Mayuresh Kini, co-founder of Zinc Money, wealth-tech platform focused on children's education. “This is precisely why UCITs become crucial, as they help investors avoid potential US estate tax complications.”

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Beyond tax benefits, UCITS funds offer a structured and efficient route to global market exposure. According to Viram Shah, co-founder and CEO at Vested, their biggest draw is diversification. “UCITS funds provide exposure to various geographies, sectors, and asset classes—all through a single fund,” he says. That makes them ideal for investors who want broad-based exposure without managing multiple holdings.

They’re also governed by stringent European regulations, which enforce robust risk controls and transparency. This ensures a high level of investor protection and makes it easier to assess fund performance, fees, and holdings.

Another practical advantage is liquidity and ease of portability. “Because of their standardized structure, UCITS funds are typically liquid and easily transferable, allowing investors to enter and exit positions with relative ease,” Shah adds.

Where are UCITS ETFs listed?

UCITS ETFs (Undertakings for the Collective Investment in Transferable Securities Exchange-Traded Funds) are primarily listed on major European stock exchanges, with several also cross-listed on international platforms to broaden access.

“The London Stock Exchange (LSE) is one of the most popular venues, hosting hundreds of UCITS ETFs that span multiple asset classes and global regions,” says Kini of Zinc Money. Other key European exchanges include Euronext (Paris and Amsterdam), XETRA (Germany), Borsa Italiana (Italy), and SIX Swiss Exchange (Switzerland), each offering a wide array of fund options tailored to both local and global investors.

Beyond Europe, select UCITS ETFs are available on platforms such as the Hong Kong Stock Exchange (HKEX) and Singapore Exchange (SGX).

“Certain issuers, like DWS, have made their ETFs accessible in Asia-Pacific through these exchanges, improving acess for regional investors,” Kini adds. Additionally, CBOE Europe offers currency-hedged share classes for some UCITS ETFs.

A standout feature of UCITS ETFs is their cross-listing capability. The same fund may trade on multiple exchanges in different currencies—such as EUR, GBP, or USD—enhancing accessibility for investors across the world.

How to invest

Investing in UCITS ETFs is a relatively simple process, though it requires coordination between your broker and bank under India’s Liberalized Remittance Scheme (LRS).

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Here’s a step-by-step breakdown, as explained by Kini, co-founder of Zinc Money:

1. Open an account with a global broker

“Choose a platform that provides access to international exchanges like the LSE or Euronext—popular options include Interactive Brokers, PhillipCapital, and Zinc Money,” says Kini. These brokers enable Indian investors to trade directly in global ETFs, including UCITS.

2. Remit funds from your Indian bank

“Once your account is active, initiate a fund transfer under the LRS, which permits remittances of up to $250,000 per financial year,” Kini explains. The transfer typically takes one to two working days, depending on the bank.

3. Trade the UCITS ETF of your choice

Once the funds reach your brokerage account, you can start investing in any UCITS ETF listed on supported exchanges. “Trades are executed and settled through your brokerage account—just like domestic stock transactions,” Kini notes.

“If you have all your documents in place and live in a major city like Mumbai, Delhi, or Bengaluru, the account can be opened the same day,” he adds.

Zinc Money currently offers both online onboarding and in-person consultations in 14 major Indian cities, along with personalized investment advisory services.

Popular UCITS ETFs

A wide variety of UCITS ETFs are available to investors, many of which are listed on the London Stock Exchange (LSE) and offer diversified exposure to global markets.

One of the most widely traded is VUAA, the Vanguard S&P 500 ETF, which tracks 500 of the largest publicly listed U.S. companies. For investors seeking exposure to tech-heavy indices, EQQU, the Invesco Nasdaq 100 ETF, is a popular option that focuses on leading non-financial firms listed on the Nasdaq.

Those looking for broader global exposure may consider IWDA, the iShares MSCI World ETF, which includes over 1,500 companies across developed markets. Meanwhile, CBUK, the iShares China Tech ETF, offers targeted access to China’s fast-growing technology sector.

Minimum investment

There’s technically no minimum threshold to invest in UCITS ETFs. However, a sensible starting point is around ₹25,000, says Kini. “We don’t recommend investing with less than ₹25,000,” he notes.

This baseline helps ensure that transaction costs are justified and that investors can fully benefit from the diversification and tax advantages that UCITS funds offer.

Tax & charges

Taxation on UCITS for Indian investors follows standard international norms. Short-term capital gains—on units held for less than two years—are taxed at the investor’s marginal income tax rate. Long-term gains, on holdings beyond two years, attract a 12.5% tax rate.

Forex-related charges are another important consideration. According to Kini, currency conversion and remittance costs vary across platforms. Zinc Money, for instance, levies a 1% forex markup plus a flat fee of ₹350 per transaction, and works with banks such as RBL to streamline international transfers.

While UCITS may carry slightly higher fees than some US-listed ETFs, it’s important to take a longer-term view, says Navlakhi of International Money Matters. “It's important to look beyond just the expense ratio when evaluating long-term investment value."

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Many US-listed ETFs distribute dividends by default, with limited or no reinvestment options—and those payouts are often subject to withholding tax, depending on the investor’s country of residence. UCITS funds, on the other hand, often offer accumulation share classes, where earnings are automatically reinvested into the fund.

“"This reinvestment can significantly enhance long-term growth through NAV appreciation, making UCITS a more efficient vehicle for compounding wealth," Navlakhi explains.