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  • Investments by Non-Residents in Immovable Properties in India (accordion component for below data)
Investments by Non-Residents in Immovable Properties in India (accordion component for below data)

Provisions of FEMA


  • Section 6(3)-rbi to frame reg.
  • To prohibit, restrict, regulate acquisition or transfer of imm.property in India.
  • Other than lease not exceeding 5 years.
  • Notification no fema 21 dt 3 may 2000.

Investment in Immovable Property

  • Except under the act/reg acquisition or transfer of imm.property in India by persons resident outside India (including Indian citizens resident outside India) requires prior approval of RBI.
  • Imm.property in India by person’s resident outside India (including Indian citizens’ resident outside India) requires prior approval of RBI.

Investment in Immovable Property

  • Indian citizen’s residents outside India.
  • Persons of Indian origin (PIO).
  • Foreign citizens of non-Indian origin.

Investment in Immovable Property

  • Acquisition of prop other than agri/plantation/farmhouse by NRI/PIO by way of purchase, gift, inheritance, court-settlement, etc. (reg.3-fema21).
  • Purchase from resident out of funds received through inward remittance or NR ACS, gift from NRI/PIO/resident or inheritance from a resident or bonafide NR holder [reg 4 (a) , (b) & (c).]
  • Transfer of imm.property (other than agri/plantation/farm house) by NRI to another NRI or PIO.
  • To a citizen of India residing in India.
  • Transfer by PIO by way of sale to resident (other than agri/plantation/farmhouse).
  • Transfer by PIO by gift or sale to resident who is citizen of India.
  • Acquisition of imm.property (other than agri/plantation/farmhouse) by persons outside India who are permitted to carry on business activity in India by RBI (branch/office of foreign companies).
  • To report to RBI in form IPI within 90 days of such acquisition.

Acquisition/transfer by foreign citizens of non-Indian origin by

  • Foreign citizens of non-Indian origin who are treated as resident in India in t/o sec.2(v) of fema 1999 are permitted (other than agri/plant/farm house).
  • However, citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan whether residing in India or not are prohibited.
  • All other purchase/ sale/ transfer of imm.property requires approval from RBI/Government of India in some cases.

Entry Strategies for Foreign Investors

As Foreign Company

  • RBI's prior approval required for setting up liaison/branch office (fema notification no 22 dated 03/05/2000).
  • Required to comply with Indian Companies Act, 1956.
  • To register with registrar of companies within 30 days of setting up a place of business.

Liaison Office (LO)

  • Cannot undertake any commercial/business activity.
  • Not allowed to generate any income in India.
  • Only liaison activities permitted.
  • Communication channel between parent and clients in India.
  • All expenses to be met out of inward remittances from ho abroad.
  • To file annual activity certificate from a chartered accountant to RBI (RO).
  • Application to RBI ECD central office.

Branch Offices (BO)

  • Government allows foreign companies engaged in manufacturing and trading activities to set up branches.
  • No direct manufacturing allowed.
  • Activities defined clearly.
  • Fema 22/reg 5/annexure.
  • Prior approval from RBI required.
  • RBI gives approval on a case by case basis.
  • Financial soundness, trade links with India of the parent company and proposed activities of the BO considered.
  • Treated as residents.
  • Annual certificate on activities and accounts to be submitted from a chartered accountant.
  • Remittance of annual profits allowed through authorised dealers subject to submission of certain documents.

Project Offices (PO)

  • Foreign cos awarded projects by Indian corporates.
  • Projects approved by appropriate authorities.
  • Financed by Indian banks/financial institutions/multilateral/bilateral international financial institutions.
  • Application to concerned regional office of RBI.
  • Other connected permissions for opening of accounts, etc., given by RBI with the approval.
  • Subject to conditions applicable as per contract/approval of the project.

Premises for LO/BO

  • Liaison offices are not permitted to acquire any immovable properties for carrying on their activities.
  • Can take on lease for periods not exceeding five years for office premises.
  • Branch offices allowed to acquire property for their office purposes.
  • Required to report such acquisition to RBI in form IPI within 90 days.
  • Regulation 5 of fema 22 -general permission.
  • All approvals for LO/BO/PO under fema and subject to necessary approvals being obtained from appropriate authorities under other applicable laws/acts.
  • They should abide by the laws of the land.

As an Indian Company

  • Through incorporation of a company under Indian Companies Act, 1956.
  • Investment can be up to 100% depending on:
    • Business plan of investor
    • Investment policy of Government of India
    • Receipt of requisite approvals
  • To be registered with register of companies (roc) under Indian Companies Act, 1956.
  • Once registered, Indian laws apply as other domestic companies.

Joint Ventures-Advantages

  • Established distribution/marketing set up of the Indian partners.
  • Available financial resource of the Indian partner.
  • Established contacts of the Indian partner which help smoothen the process of setting up of operations.


Foreign Technology Agreements
  • Either through automatic route or under delegated powers exercised by RBI or by Government of India.
  • Not available to foreign companies having/had technology arrangement/previous venture/tie up/trade mark agreement, etc. in the same or allied field.
  • Not available for small scale industries (SSI) units/activities requiring industrial licensing.

Foreign Technical Collaboration

  • For remittance of FX on account of ftc section 5 of fema applies.
  • Treated as current account transactions.
  • Certain limits restrictions apply.
  • Government of India notification no.gsr.381(e) dt 3 may 2000.
  • Authorised dealers may permit remittances of royalties/technical know-how fees on account of collaboration agreements.
  • Subject to conditions and ceilings prescribed under the relevant schedule to section 5 of fema.
  • Agreements required to be registered with concerned regional office of RBI.
  • RBI registers the agreements and grants approval for necessary remittances.
  • Tech collaboration agreements require RBI's approval under auto route.
  • Applications to be submitted on plain paper (five copies) furnishing all required details to the concerned RO of RBI.
  • Proposals not coming under auto route to be submitted to Government of India (SIA, DIPP, MOC&i and Udyog Bhavan, New Delhi).

Linkages/Contacts

  • Policy-government of India (Government of India), ministry of commerce and industry (MOC&i), foreign investment promotion board (FIPB)/SIA.
  • Reserve bank of India, exchange control department(ECD), foreign investment division, central office, regional offices of ECD.
  • Manual on industrial policy and procedures available on Government web site:
    www.indmin.nic.in
  • RBI web site: www.fema.rbi.org.in
  • Fipb matters-contact director,fc/fdi/fipb.
  • E-mail :srinivas@ub.nic.in

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