• Investments by Non-Residents in Immovable Properties in India.
  
  
• Entry Strategies for Foreign Investors.
  
  

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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