The Real Estate and Housing sector in India has seen tremendous investment in past few years. Foreign Direct Investment (FDI) in real estate development by Non-Resident Indians (NRIs) is on the rise with more people investing in housing projects as the safest form of investment. NRIs can invest in Indian real estate and housing sector through Indian companies registered under the Companies Act, 2013 through FDI.
The Foreign Exchange Management Act (FEMA), 1999 defines an NRI as an Indian citizen that resides outside India. and a Person of Indian Origin (PIO) as a citizen of another country who has held an Indian passport at any time or if the person, his father or grandfather has been a citizen of India. However, a citizen of countries like Bangladesh, Sri Lanka, Afghanistan, Pakistan, China, Iran, Nepal or Bhutan is not considered as a PIO.
Foreign Direct Investment is the investment by a non-resident person or entity residing outside India. NRIs are allowed o invest up to 100% equity capital in Indian companies on an automatic basis. There is no fixed limit or number of properties in which an NRI can invest in India. An NRI and a PIO can invest in both residential and commercial property in India.
An NRI can purchase any immovable property and transfer it to the following people:
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Any person who is an Indian citizen but resides outside India,
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Any person who is of Indian origin but resident outside India,
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Any person resident in India.
The only limitation prescribed on investment in property by NRIs is FDI in agricultural land, farmhouse or a plantation property. Such property cannot be acquired by a foreign citizen of non-Indian origin without prior approval of the Reserve Bank of India. An NRI can acquire an agricultural land, farmhouse or plantation property only through inheritance or by way of gift. An NRI can lease any immovable property for 5 years without any prior permissions.
An NRI can sell residential or commercial property in India to a person resident in India, an NRI or PIO. However, a PIO can sell residential or commercial property in India only to a resident of India. Prior approval of the RBI is required for sale of residential or commercial property in India to an NRI or PIO.
An NRI or PIO can sell their agricultural land, plantation or farmhouse located in India to an Indian citizen resident in India. However, a foreign national of non-Indian origin who resides outside India requires prior approval from the RBI to sell such property located in India.
An NRI who has an established liaison office in India under the provisions of FERA or FEMA regulations is not allowed to purchase immovable property in India. However, an NRI who has an established branch office or any other place of business in India under the provisions of FERA or FEMA regulations are allowed to purchase immovable property in India.
It is always advised for NRIs to consult property lawyers before investing in Indian real estate sector to understand the complexity of legal procedures and formalities. MyAdvo has a vast network of 3000+ property lawyers across 600+ states in India. If you need to invest in real estate in India, hire the best property lawyers from MyAdvo. Email us at info@myadvo.in or call now at 9811782573.