Purchase of Immovable Property
With the exception of agricultural land, plantations and farmhouses,
Non Resident Indians are eligible to purchase residential or commercial
property in India, without any permission from the RBI.
Persons of Indian Origin however, who do not hold an Indian
passport, do need an RBI sanction for any transaction in immovable
property in the country. A declaration in Form IPI 7 is to be
submitted at the Central Office of the RBI; Mumbai within 90 days
of purchase or final payment of the purchase. Documents supporting
the transaction, along with a bank certificate pertaining to the
purchase have to be submitted with Form IPI 7.
Mode of payment
Payment towards purchase of the property can be made out of inward
remittances in foreign exchange through banks, or from the individual's
NRE/ FCNR (B)/ NRO accounts maintained in India.
In case a resident Indian owning agricultural property acquires
a foreign nationality later, he must regularize the holding of
the property at the office of:
The Chief of General Manager,
RBI, Central Office,
Exchange Control Department,
Foreign Investment Division, Mumbai.
NRI Investments
Foreign direct investments by NRIs up to 100% is allowed, and
full repatriation is allowed without prior approval, except when
the investment is
-
made in the manufacture of products
reserved for the public sector, or industries that need a compulsory
license, or proposed to be located at a restricted site
- in real estate, civil aviation and housing
- in excess of specified sectoral caps
- more than 24 percent in units manufacturing products reserved for small scale industries, or companies registered as small scale units
- in/for a 2nd tie-up with another company in India
- to purchase shares of an existing shareholder of an Indian company.
This is the automatic route of the RBI. NRIs can invest in Export
Oriented Units, Free Trade Zones or Export Processing Zones, Software
technology Parks, Electronic Hardware Technology Parks and Special
Economic Zones.
In the case of investments listed in the above excepted categories,
prior government approval from the Secretariat for Industrial
Assistance/ Foreign Investment Promotion Boards of the Government
of India is required, and full repatriation is allowed.
Mode of Remittance
The investment by NRIs can be either through inward remittance
through banks or from the NRE/FCNR account of the investor. The
company receiving the investment must report to the RBI in form
FC-GPR within 30 days of the issue of shares.
Indian companies can issue American Depository Receipts,
(ADR), Global Depository Receipts (GDR), and Foreign Currency
Convertible Bonds (FCCB), with the approval of the Ministry
of Finance to NRI investors for repatriation
NRIs can invest in Indian real estate in the following
segments, with repatriation benefits, subject to Government approval:
-
Development of serviced plots and construction
of residential property, townships, commercial property, urban
infrastructure and manufacture of building materials.
-
NRIs can invest in housing finance companies,
and in any real estate firm venturing into development of residential
or commercial property.
-
NRIs can make unlimited investments
in shares or convertible debentures of an Indian company in
a public or rights issue, except in the case of shares of companies
engaged in agricultural or farmhouse or plantation business.
-
In the case of firms and proprietary
concerns, NRIs and PIOs can invest through their NRE/FCNR accounts
in India if the firm is not engaged in agricultural business.
None of the investment in this category is eligible for repatriation.
