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General Information




INVESTMENTS BY NON-RESIDENTS IN IMMOVABLE PROPERITIES IN INDIA

PROVISIONS OF FEMA

  • SECTION 6(3)-RBI TO FRAME REG

  • TO PROHIBIT,RESTRICT,REGULATE ACQISITION OR TRANSFER OF IMM.PROPY 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.PROP IN INDIA BY PERSONS RESIDENT OUTSIDE INDIA (INCLUDING INDIAN CITIZENS RESIDENT OUTSIDE INDIA) REQUIRES PRIOR APPROVAL OF RBI

  • IMM.PROP IN INDIA BY PERSONS RESIDENT OUTSIDE INDIA (INCLUDING INDIAN CITIZENS RESIDENT OUTSIDE INDIA) REQUIRES PRIOR APPROVAL OF RBI

INVESTMENT IN IMMOVABLE PROPERTY

  • INDIAN CITIZENS RESIDENTS OUTSIDE INDIA

  • PERSONS OF INDIAN ORIGIN(PIO)

  • RESIDENTS OUTSIDE INDIA CARRYING ON PERMITTED ACTIVITY IN INDIA

  • 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,INHERITANCECOURTSETTLEMENT ETC (REG.3-FEMA21)

  • PURCHASE FROM RESD OUT OF FUNDS RECD THRO INWARD REMTT OR NR ACS,GIFT FROM NRI/PIO/RESD OR INHERITANCE FROM A RESD OR BONAFIDE NR HOLDER(REG 4(a),(b)& c)

  • TRANSFER OF IMM.PROP (OTHER THAN AGRI/PLANT/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/PLANT/FARMHOUSE)

  • TRANSFER BY PIO BY GIFT OR SALE TO RESD WHO IS CITIZEN OF INDIA

  • ACQUISITION OF IMM.PROP(OTHER THAN AGRI/PLANT/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 ACQISITION

ACQUISITION /TRANSFER BY FOREIGN CITIZENS OF NON-INDIAN ORIGIN BY

  • FOREIGN CITIZENS OF NON-INDIAN ORIGINWHO 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, SRILANKA, AFGHANISTAN, CHINA, IRAN, NEPAL OR BHUTAN WHETHER RESD IN INDIA OR NOT ARE PROHIBITED

  • ALL OTHER PURCHASE /SALE /TRANSFER OF IMM.PROP REQUIRES APPROVAL FROM RBI/GOI IN SOME CASES

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ENTRY STRATEGIES FOR FOREIGN INVESTORS

OPTIONS

  • LIAISON/REP OFFICE

  • BRANCH OFFICE

  • PROJECT OFFICE

  • AS AN INDIAN COMPANY THROUGH A JOINT VENTURE OR WOS

  • FDI

AS FOREIGN COMPANY

  • RBI 'S PRIOR APPROVAL REQUIRED FOR SETTING UP LIAISON/BRANCH OFFICE (FEMA NOTIFICATION NO 22 DT 3.5.2000)

  • REQUIRED TO COMPLY WITH INDIAN COMPANIES ACT,1956

  • TO REGISTER WITH REGISTRAR OF COMPANIES WITH IN 30 DAYS OF SETTING UP A PLACE OF BUSINESS.

LIAISON OFFICE (LO)

  • CAN NOT 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 REMITTENCES FROM HO ABROAD

  • TO FILE ANNUAL ACTIVITY CERTIFICATE FROM A CHARTERED ACCOUNTANT TO RBI (RO)

  • APPLICATION TO RBI ECD CENTRAL OFFICE

BRANCH OFFICES (BO)

  • GOVT ALLOWS FOREIGN COMPANIES ENGAGED IN MAUFACTURING 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

  • REMITTENCE 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 UPTO 100% DEPENDING ON:

    1. BUSINESS PLAN OF INVESTOR
    2. INVESTMENT POLICY OF GOI
    3. RECEIPT OF REQUISITE APPROVALS

  • TO BE REGISTERED WITH REGISTOR 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 GOI

  • NOT AVAILABLE TO FGN 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 REMITTENCE OF FX ON ACCOUNT OF FTC SECTION 5 OF FEMA APPLIES

  • TREATED AS CURRENT ACCOUNT TRANSACTIONS

  • CERTAIN LIMITS RESTRICTIONS APPLY

  • GOI NOTIFICATION NO.GSR.381(E) DT 3 MAY 2000

  • AUTHORISED DEALERS MAY PERMIT REMITTENCES OF ROYALTIES/TECHNICAL KNOW-HOW FEES ON ACCOUNT OF COLLOABORATION 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 REMITTENCES

  • TECH COLLOABORATION 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 GOI ( SIA,DIPP,MOC&I,UDYOG BHAVAN,NEW DELHI)

LINKAGES/CONTACTS
IMPLEMENTATION AUTHORITIES

  • POLICY-GOVERNMENT OF INIDA (GOI), MINISTRY OF COMMERCE & 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 GOVT 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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