ALL ABOUT THE PROVISIONS TO BUY THE COMMERCIAL PROPERTY BY NRI IN INDIA:-
Article answers if NRIs buy Commercial property in India, What are the types of properties that NRIs/PIOs can buy, What are the types of properties that NRIs/PIOs cannot buy, What Procedures should be followed by NRI to buy a property in India, What are the entry strategies for investing and setting up a Company in India, What are the classes of investors who usually come from outside India to make investments in India and What is an automatic route of foreign investment in India?
Q-1 Can NRIs buy Commercial property in India?
Answer: This is a question that many people come up with. The answer to this question is that yes NRI can buy a commercial property in India. RBI’s guidelines allow non-resident Indians to buy specific types of properties in India. However, it is also possible to purchase other types of properties only by obtaining special permissions.
An NRI buying property in India must be fully aware of the legal provisions that pertain to owning an immovable asset within the country. As per the provisions of the Foreign Exchange Management Act (FEMA), persons of Indian origin or PIOs and NRIs are treated as one and the same when it comes to investing in real estate in India.
Q-2 What are the Types of properties that NRIs/PIOs can buy?
Answer: The Reserve Bank of India (RBI) generally allows NRIs/PIOs who are in a possession of a valid Indian passport to buy residential/commercial properties in India. In such a case the investor need not obtain RBI’s special permission for the same. The investor is also not required to inform the RBI about buying residential/commercial property in India. An NRI can buy any number of properties as per RBI regulations and income tax laws. If the NRI investing in a commercial/residential property in India cannot come to the country many offenly, then the purchase can be executed by giving a legally binding power of attorney to another person.
Q-3 What are the Types of properties that NRIs/PIOs cannot buy?
Answer: However, RBI’s general permission does not permit NRI to buy agricultural land/plantation in India. This means that NRIs cannot invest in farmhouses without obtaining special permission from the RBI which is not guaranteed. The RBI would consider such applications on a case-to-case basis only and then decide accordingly whether to allow NRIs to acquire such property or not.
Q-4 What Procedures should be followed by NRI to buy a property in India?
1. Under the RBI’s general authorization, an NRI can purchase a property, either individually or mutually with another NRI. The most competent way to buy property is adopting a Power of Attorney.
2. Appoint a power of attorney who will be your personal legal counselor. He will also suggest you all the matters related to real estate and all the other formalities because he is already an expertise in the field. This method is officially used by many people because it is cost efficient and effective.
3. As he is already familiar with the India Laws and real estate market, he might be able to help you with the best deals as well. It is further suggested to appoint that particular General Power of Attorney (GPA) or Special Power of Attorney (SPA) whom you think is reliable because it will be easy to communicate.
Q-5 What are the entry strategies for investing and setting up company in India?
1. Foreign nationals (except for the citizens of Nepal and Bhutan) entering into the territory of India are required to carry a valid passport/travel documents and a valid visa. Visas are for the purpose of tourism, entry, transit, conferences, business and employment in India re issued to foreign nationals by Indian Embassies and consulates abroad.
2. Business visas may be issued for a period of 5 years, with multiple entry provisions. While a business visa is issued by an Indian Embassy abroad, it can be renewed/extended within India if the applicant so desires.
3. A foreign national, holding a visa (other the tourist visa) which is valid for a period exceeding 180 days, is required to be registered with FRRO within 15 days of arrival into India. change of purpose is not permitted to be changed.
4. A Bank grantee is supposed to be provided
Q-6 What are the classes of investors who usually come from outside India to make investments in India?
1. Non resident Indian/persons of Indian origin/OCI.
2. Foreign companies.
3. Foreign venture capital companies.
4. Foreign institutional investors and foreign portfolio investors.
Q-7 What is automatic route of foreign investment in India?
Answer: Automatic route of foreign investment in India means the route that neither requires prior approval of the government nor the RBI, however the investors are only required to notify the Regional office concerned of RBI within 30 days of receipt of inward remittances.
(Republished with amendments)