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Direct Investment Opportunities
NRIs & OCBs can invest in India as under

• Investment under Automatic Route with repatriation benefits
• Investment with Government approval
• Other investments with repatriation benefits
• Investments up to 100% equity without repatriation benefits
• Other investments by NRIs/OCBs without repatriation benefits.

Details of above are available on RBI website.

Automatic Route of RBI with Repatriation Benefits

            NRIs/OCBs can invest in shares/convertible debentures of Indian companies under the Automatic Route without obtaining Government or RBI permission except for a few sectors where FIPB/SIA permission is necessary, or where the investment can be made only up to a certain percentage of paid up capital.

For full details of the Automatic Route investors may see the http://www.dipp.nic.in

Investment with Government Approval

     Investments not eligible under the Automatic Route, are considered by the Foreign Investment Promotion Board (FIPB), a high powered inter-ministerial body under the chairmanship of Secretary, Department of Industrial Policy & Promotion, SIA, subject to sectoral limits/norms. These investments also enjoy full repatriation benefits.

Other Investments with Repatriation Benefits

Investment up to 100% Equity without Repatriation Benefits

OTHER INVESTMENTS BY NRIs/OCBs WITHOUT REPATRIATION BENEFITS

• Investment in Non Convertible Debentures
• Money Market Mutual Funds
• Deposits with Companies
• Commercial Papers (OCBs are presently not permitted)

Portfolio Investment

            NRIs/OCBs are permitted to make portfolio investment in shares/debentures (convertible and non-convertible) of Indian companies, with or without repatriation benefit provided the purchase is made through a stock exchange and also through a designated branch of an authorised dealer. NRIs/OCBs are required to designate only one branch authorised by the Reserve Bank for this purpose.

General Conditions for Purchase with Repatriation of Non- Repatriation Rights

• Investment in equity shares and convertible debentures is permitted subject to an overall ceiling of (a) 10 per cent of the total paid-up equity capital of the company concerned; and (b) 10 per cent of the total paid-up value of each series of the convertible debentures issued by the company concerned for all NRIs/OCBs taken together both on repatriation and on non-repatriation basis.
• The purchase of shares and debentures under the scheme is required to be made at the ruling market price.
• Indian companies listed on recognised stock exchanges in India are however permitted to allow NRIs/OCBs to acquire shares/debentures up to 24% instead of the 10% limit after a resolution in General Body and necessary information to RBI.

Investment on Non -Repatriation basis

      NRIs/OCBs intending to invest on non-repatriation basis should submit the application in form NRI and NRC respectively, to a designated branch of an authorised dealer. Authorised Dealer will grant general permission to purchase shares/debentures to NRI/OCB subject to the condition that the payment for such investment is received through inward remittance or from the investor’s NRE/FCNR/NRO Account.

            Securities acquired by NRIs/OCBs under PI scheme on a non-repatriation basis can be sold without any permission on the floor of a stock exchange.

            Dividend and interest income is fully repatriable

Investment on Repatriation basis

      NRIs and OCBs intending to invest with repatriation benefits should submit the application to the designated branch of authorised dealer (AD). AD will grant to NRI/OCB for purchase of shares/debentures subject to the conditions that-

• The payment is received through an inward remittance in foreign exchange or by debit to the investor’s NRE/FCNR account.
• Investment made by any single NRI/OCB investor in equity/preference shares and convertible debentures of any listed Indian company does not exceed 5% of its total paid-up equity or preference capital or 5% of the total paid-up value of each series of convertible debentures issued by it.
• NRIs/OCBs take delivery of the shares/convertible debentures purchased and give delivery of the shares/convertible debentures sold under the Scheme.

         NRIs and OCBs can freely sell securities acquired by them with repatriation benefits, without any permission, through a stock exchange. Dividend and interest income is also fully reportable

Investment in the units of Domestic Mutual Funds on Non-Repatriation/Repatriation basis

       Same procedure as indicated in paragraphs for Investment on Non-Repatriation Basis and Repatriation Basis above is applicable. However, approvals already granted for portfolio investment in shares/debentures of Indian companies will also be valid for purchase of units of domestic mutual funds.

Investment in Real Estate

• All persons, whether resident in India or outside India, who are citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan require prior permission of Reserve Bank for acquiring or transferring any immovable property in India.

• A person resident outside India, who has been permitted by Reserve Bank to establish a branch, or office, or place of business in India (excluding a Liaison Office), has general permission of Reserve Bank to acquire immovable property in India, which is necessary for, or incidental to, the activity. However, in such cases a declaration, in prescribed form (IPI), is required to be filed with the Reserve Bank, within 90 days of the acquisition of immovable property.

• An Indian citizen resident outside India does not require any permission to acquire any immovable property in India other than agricultural/plantation property or a farm house.

• An Indian citizen resident outside India does not require any permission to transfer any immovable property, to a citizen of India who is resident in India.

• An Indian citizen resident outside India does not require any permission to transfer any immovable property other than agricultural or plantation property or farm house, to a person who: -

  • is a citizen of India resident outside India

  • is a person of Indian origin resident outside India

• A person of Indian origin resident outside India does not require any permission to acquire any immovable property other than agricultural land/farm house/plantation property in India by purchase, from out of funds:

  • received in India by way of inward remittance through banking channel from any place outside India

  • held in any non-resident account maintained in accordance with the provisions of the Act and the regulations made by the Reserve Bank under the Act.

• A person of Indian origin resident outside India does not require any permission to acquire any immovable property in India other than agricultural land/farm house/plantation property by way of gift from a person resident in India or from a person resident outside India who is a citizen of India or from a person of Indian origin resident outside India.

• A person of Indian origin resident outside India does not require any permission to acquire any immovable property in India by way of inheritance from a person resident outside India who had acquired such property in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations or from a person resident in India.

• A person of Indian origin resident outside India does not require any permission to transfer any immovable property in India other than agricultural land/farm house/plantation property, by way of sale to a person resident in India.

• A person of Indian origin resident outside India does not require any permission to transfer agricultural land/farm house/plantation property in India, by way of gift or sale to a person resident in India who is a citizen of India.

• A person of Indian origin resident outside India does not require any permission to transfer residential or commercial property in India by way of gift to a person resident in India or to person resident outside India who is a citizen of India or to a person of India origin resident outside India.

• Repatriation outside India, including credit to RFC, NRE or FCNR account, of sale proceeds of any immovable property situated in India, requires prior permission of the Reserve Bank except in circumstances stated in paragraph 13 below.

• In the event of sale of immovable property, other than agricultural land/farm house/plantation property in India by a person resident outside India, who is a citizen of India, or a person of Indian origin, the authorised dealer may allow repatriation of the sale proceeds outside India, provided All the following conditions are satisfied

  • the immovable property was acquired by the seller in accordance with the provisions of the Exchange Control Rules/Regulations/Law in force at the time of acquisition, or the provisions of the Regulations framed under the Foreign Exchange Management Act, 1999

  • the sale takes place after three years from the date of acquisition of such immovable property or from the date of payment of final installment of consideration for its acquisition, whichever is later

  • the amount to be repatriated does not exceed

    • the amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels or out of funds held in foreign currency non-resident account

    • the foreign currency equivalent, as on the date of payment, of the amount paid where such payment was made from the funds held in non-resident external account for acquisition of the property

    • in the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties.

     

• All requests for acquisition of agricultural land/plantation/property/farm house by any person resident outside India or foreign nationals may be made to the Chief General Manager, Reserve Bank of India, Central Office, Exchange Control, Department, Foreign Investment Division (III), Mumbai – 400 001.

• The NRIs/PIOs can freely rent out their immovable property in India without seeking any permission from the Reserve Bank. The rental income being a current account transaction is freely reportable outside India.