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NRI/PIO/OCBS Investment Opportunites
There are various investment
opportunities, which are available to Non Resident Indian (NRI),
Person of Indian Origin (PIO) or Overseas Corporate Bodies (OCBs).
For further information, relevant guidelines and instructions of
the
Reserve Bank of India
or the
Department for Industrial Policy
and Promotion may be consulted.
Non-Resident Indian/Person of Indian
Origin/Overseas Corporate Bodies
Who is a Non-Resident Indian?
"Non-Resident Indian (NRI) means a person resident
outside India who is a citizen of India or is a person of Indian
origin".
Who is a Person of Indian Origin?
For the purposes of availing of the
facilities of opening and maintenance of bank accounts and
investments in shares/securities in India
Person of Indian origin means a
citizen of any country other than Pakistan or Bangladesh if,
-
He at any time, held an Indian passport
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He or either of his parents or any of his grand parents was
a citizen of India by virtue of the constitution of India or
Citizenship Act, 1955 (57 of 1995)
-
The person is a spouse of an Indian citizen
For investments in immovable properties:
Person of Indian origin means an
individual (not being a citizen of Pakistan or Bangladesh or
Afghanistan or Bhutan or Sri Lanka or Nepal or China or Iran)
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who at any time, held an Indian passport
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who or either of whose father or whose grandfather was a
citizen of India by virtue of the Constitution of India or
the Citizenship Act, 1955 (57 of 1955)
What is an OCB?
Overseas Corporate Bodies (OCBs) are
bodies predominantly owned by individuals of Indian nationality
or origin resident outside India and include overseas companies,
partnership firms, societies and other corporate bodies which
are owned, directly or indirectly, to the extent of at least 60%
by individuals of Indian nationality or origin resident outside
India as also overseas trusts in which at least 60% of the
beneficial interest is irrevocably held by such persons. Such
ownership interest should be actually held by them and not in
their capacity as nominees. The various facilities granted to
NRIs are also available with certain exceptions to OCBs so long
as the ownership/beneficial interest held in them by NRIs
continues to be at least 60%.
What are the various facilities available to NRIs/OCBs?
NRIs/OCBs are granted the following facilities
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Maintenance of bank accounts in India.
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Investment in securities/shares of, and deposits with Indian
firms/ companies.
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Investments in immovable properties in India.
Bank Accounts
NRIs/PIOs/OCBs/ are permitted to open bank accounts
in India out of funds remitted from abroad, foreign exchange
brought in from abroad or out of funds legitimately due to them
in India, with authorised dealer. Such accounts can be opened
with banks specially authorised by the Reserve Bank in its
behalf [Authorised Dealer (AD)].
General
Permissions
Reserve Bank has granted general
permission to NRIs/PIOs, for undertaking direct investments in
Indian companies under the Automatic Route, purchase of shares
under Portfolio Investment Scheme, investment in companies and
proprietorship/partnership concerns on non-repatriation basis
and for remittances of current income. NRIs/PIOs do not have to
seek specific permission for approved activities under these
schemes.
The Reserve Bank of India has now
further simplified financial transactions by NRIs/PIOs by
granting general permissions to:
To resident individuals,
partnership/proprietorship concerns to avail of interest bearing
rupee loans from NRIs/PIOs out of funds remitted by them from
abroad or out of funds held in their bank accounts in India, on
non-repatriation basis, subject to certain conditions one of
them being that the rate of interest on such loans should not
exceed Bank Rate plus two percentage points.
NRIs/PIOs to transfer by way of gift
shares held by them in Indian companies and to transfer by way
of gift immovable property held by them in India subject to
compliance with other applicable rules/regulations including the
provisions of Foreign Contribution Regulations Act, 1976 by the
charitable trust/organisation concerned.
All domestic public/private sector
mutual funds for issue of Units to NRIs/PIOs/OCBs on both
repatriation as well as non-repatriation basis.
NRIs/PIOs/OCBs to place deposits with
Indian firms, on non-repatriation basis and with Indian
companies including Non-banking financial companies on both
repatriation and non-repatriation basis.
NRIs/PIOs/OCBs for sale of shares
acquired under direct investment schemes on stock exchanges in
India.
NRIs/PIOs/OCBs have been granted
General Permission to invest in Government Securities and
Treasury Bills.
Taking into account the facilities
that are already available, and the above new measures, NRIs/PIOs
will not have to seek specific permission of the Reserve Bank
for a whole variety of approved financial/investment
transactions. This should considerably reduce paper work and
time taken for undertaking such transactions.
After the above changes come into
effect, the areas in which facilities available to NRIs/PIOs/OCBs
will be the same as available to domestic residents except
relating to investment by NRIs/PIOs/OCBs in real
estate/agriculture and plantation business Chit Funds, Nidhis or
Print Media.
Notes
For the purposes of transactions,
i.e., transfer, sale, purchase, etc., dealing with immovable
property in India, a person of Indian origin is defined as
under:
"an individual (not being a citizen
of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China
or Iran or Nepal or Bhutan), who
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at any time, held Indian passport
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who or either of whose father or whose grandfather was a
citizen of India by virtue of the constitution of India or
the Citizenship Act, 1955 (57 of 1955)."
PIO Card Scheme
The Government has launched a
comprehensive Scheme for the Persons of Indian Origin-called the
‘PIO
Card Scheme’. Under this Scheme, Persons of Indian
Origin up to the fourth generation (great grand parents) settled
throughout the world, except for a few specified countries,
would be eligible. The Card would be issued to eligible
applicants through the concerned Indian Embassies/High
Commissions/Consulates and for those staying in India on a long
term visa, the concerned Foreigners Regional Registration
Officer (Delhi, Mumbai, Calcutta, and Chennai) would do the
same. The fee for the card, which will have a validity of 20
years, would be US$ 1000.
"Person of Indian origin" means a
foreign citizen (not being a citizen of Pakistan, Bangladesh and
other countries as may be specified by the Central Government
from time to time) if,
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he/she at any time held an Indian passport
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he/she or either of his/her parents or grand parents or
great grand parents was born in and permanently resident in
India as defined in the Government of India Act, 1935 and
other territories that became part of India thereafter
provided neither was at any time a citizen of any of the
aforesaid countries (as referred to in 2(b) above)
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he/she is a spouse of a citizen of India or a person of
Indian origin covered under (i) or (ii) above.
Besides making their journey back to their roots
simpler, easier and smoother, this Scheme entitles the PIOs to a
wide range of economic, financial, educational and cultural
benefits. The benefits envisaged under the Scheme include
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No requirement of visa to visit India,
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No requirement to register with the Foreigners Registration
Officer if continuous stay does not exceed 180 days. If
continuous stay exceeds 180 days, then registration is
required to be done within a period of 30 days of the expiry
of 180 days,
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Parity with Non-Resident Indians in respect of facilities
available to the latter in economic, financial, educational
fields etc. These facilities ill include,
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Acquisition, holding, transfer and disposal of immovable
properties in India except of agricultural/plantation
properties,
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Admission of children in educational institutions in
India under the general category quota for NRIs-
including medical/engineering colleges, IITs, IIMs etc.,
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Various housing schemes of Life Insurance Corporation of
India, State Governments and other Government agencies,
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All future benefits that would be extended to NRIs would
also be available to the PIO Card holders,
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However, they
shall not enjoy political rights in India.
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