If you are an Indian professional working at a US tech company such as Google, Microsoft, or Nvidia, chances are a large part of your wealth today sits in company RSUs.
Let’s say those RSUs are now worth around $100,000 (~₹95 lakhs).
- You already know that holding them directly makes you liable to US estate tax, so you decide to sell and diversify that exposure.
- The next logical step seems simple: reinvest in US-listed ETFs. They offer broader exposure, lower concentration risk, and seem like the easiest way to stay invested in US markets while reducing tax exposure.
But here is the part most professionals miss. Those ETFs are still US-situs assets, which means they carry the same estate-tax risk you were trying to move away from.
This guide explains why, how US-listed ETFs differ from global ones, and how non-US funds called UCITS ETFs can give you the same US market exposure without the US estate tax.
Table of contents
- Why US-listed ETFs still keep you inside the US estate tax net
- Where UCITS ETFs come in
- How the two compare for RSU proceeds
- How RSU holders can transition to UCITS ETFs
- Conclusion
Why US-listed ETFs still keep you inside the US estate tax net
US-listed ETFs such as SPY, QQQ, or VOO give broad exposure to American markets. They trade on US exchanges, are registered with the US SEC, and hold their assets through US custodians.
Because these funds are domiciled in the US, they are US-situs assets. That matters for Indian investors: even if you invest from India, their domicile keeps them within the US estate tax system.
If the total value of your US-situs assets, including ETFs and any RSU shares you still hold, exceeds USD 60,000, your estate can be subject to US estate tax at rates reaching 40%.
Most investors assume diversification equals safety. In reality, diversifying within the same tax jurisdiction does not reduce estate-tax exposure. You are simply spreading the same risk across more instruments, not removing it.
For more on this risk, especially how RSUs themselves create estate-tax exposure for Indian professionals, read our explainer on the key risks with RSUs.
Where UCITS ETFs come in
After selling your RSUs, your goal is not just to diversify but to protect that wealth from unnecessary tax exposure.
UCITS ETFs are funds set up under EU rules, usually in Ireland, that can hold the same US stocks as SPY, QQQ or VOO.
Because the fund is not US-domiciled, it is not a US-situs asset, so the proceeds you reinvest stay outside US estate tax.
What UCITS ETFs are explains how these funds work, and UCITS vs US ETFs for Indian investors compares the two on dividend tax and cost, with a worked example.
How the two compare for RSU proceeds
Below is a simple comparison showing how each behaves when used to diversify RSU proceeds.
| US-listed ETF | UCITS ETF | |
| Domicile | United States | Ireland or Luxembourg |
| Estate tax exposure | Subject to up to 40% US estate tax once holdings exceed USD 60,000 | No estate tax exposure, as the fund is not US-domiciled |
| Dividend withholding | 25%, withheld from you and creditable in India | 15% at fund level for Irish-domiciled ETFs, not creditable in India |
| Dividend handling | Mostly distributing share classes that pay out cash dividends | Option of accumulating share classes that automatically reinvest dividends |
| Compounding efficiency | Interrupted each year by dividend payouts and tax | Continuous compounding with accumulating share classes |
| Regulatory oversight | US SEC | European UCITS framework focused on investor protection |
| Currency options | Primarily USD | Available in USD, EUR, and GBP listings |
Use our UCITS Screener to discover UCITS-equivalents of US ETFs.
How RSU holders can transition to UCITS ETFs
For most professionals, the goal after each RSU vesting cycle is to turn concentrated company stock into a globally diversified portfolio. The challenge is doing this efficiently, without adding tax or regulatory complexity.
Paasa is a platform that helps Indian professionals diversify their RSUs end to end.
It connects your existing RSU holdings, bank accounts and brokerage setup into a single, fully compliant flow, so you can sell your RSUs and reinvest the proceeds in UCITS ETFs.
Under RBI rules, you can reinvest the proceeds abroad within 180 days of the sale, without bringing them back to India. See how to diversify RSUs without bringing the money back to India.
Note: Selling your RSUs is a taxable event in India. The gain above the value at vesting is taxed at your slab rate if you held the shares for 24 months or less, and at 12.5% as long-term capital gains if you held them for more than 24 months. Read our guide on capital gains tax on RSU shares.
Here is how the transition works through Paasa
Step 1: Transfer your vested RSUs
After vesting, Paasa helps you move your RSUs from your equity broker (such as Fidelity, Morgan Stanley, Charles Schwab or E*TRADE) to your Paasa account, held in your own name, using the Automated Customer Account Transfer Service (ACATS). This gives you full control over your vested shares, separate from your employer’s systems.
Step 2: Strategic liquidation
Once your RSUs appear in your Paasa account, you can sell some or all of them, depending on your goals.
This helps reduce exposure to a single company and frees up cash you can put into diversified global investments.
Step 3: Reinvestment into UCITS portfolios
After the sale, you can reinvest the proceeds into UCITS ETFs.
These portfolios give you:
- Global diversification beyond your employer’s stock.
- Protection from US estate-tax exposure.
- More efficient compounding through accumulating UCITS ETFs such as CSPX (S&P 500) or EQAC (Nasdaq 100).
Step 4: Ongoing compliance handled
Paasa helps keep every step of your global investing compliant with Indian regulations. This includes:
- FEMA/LRS reporting for cross-border remittances.
- Form 67 support for claiming foreign tax credits.
- Schedule FA and FSI support for annual income-tax filings.
Typical timeline: Most RSU transfers and reinvestments are completed within 3 to 5 business days, after which your funds are set up to diversify globally.
To go through this transition in detail, schedule a call with our team or reach us at support@paasa.com.
Conclusion
You do not have to exit the US market to exit the US estate tax net.
That is the shift UCITS ETFs make possible for RSU holders who want to stay invested in global markets without carrying unnecessary risk.
If you have already moved RSU proceeds into US ETFs such as VOO or QQQ, see whether you should switch from US ETFs to UCITS.
Selling RSUs is the first step toward diversification. The next step is to make sure your new investments do not reintroduce the same estate-tax exposure in a different form.
UCITS ETFs make that possible by giving you the same US market exposure, cleaner tax treatment, and long-term compounding efficiency, all while staying outside the US estate-tax system.
Related: What are UCITS ETFs? and UCITS vs US ETFs for Indian investors
About Paasa
Paasa is a global investing platform for Indian residents and NRIs. It gives you direct access to stocks, ETFs and UCITS funds on their home exchanges across the US, Canada, the UK, Germany, France, Switzerland, the Netherlands, South Korea, Japan, Hong Kong and Singapore.
- UCITS access: Buy UCITS ETFs and UCITS mutual funds in USD, GBP or EUR lines from one account.
- LRS and FEMA handled: The remittance paperwork is prepared for you, and every INR transfer is tracked for your return.
- Tax reports: Schedule FA, capital gains and dividend reports built for Indian tax returns, included with the account.
