Thursday 19 November 2015

RBI GUIDELINES


Can a foreign national of non-Indian origin resident outside India purchase immovable property in India?
No. A foreign national of non-Indian origin, resident outside India cannot purchase any immovable property in India. But, he/she may take residential accommodation on lease provided the period of lease does not exceed five years. In such cases, there is no requirement of taking any permission of or reporting to Reserve Bank

Can a foreign national who is a person resident in India purchase immovable property in India?
Yes. But the person concerned would have to obtain approvals, and fulfil the requirements, if any, prescribed by other authorities, such as the concerned State Government, etc. However, a foreign national resident in India who is a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan would require prior approval of Reserve Bank. Such requests are considered by Reserve Bank in consultation with the Government of India.

Can an office of a foreign company purchase immovable property in India?
Yes - A foreign company which has established a Branch Office or other place of business in India, in accordance with FERA / FEMA regulations, can acquire any immovable property in India, which is necessary for or incidental to carrying on such activity. The payment for acquiring such a property should be made by way of foreign inward remittance through proper banking channel.

A declaration in the prescribed form should be filed with Reserve Bank within ninety days from the date of acquiring the property. Such a property can also be mortgaged with an authorised dealer as a security for other borrowings. On winding up of the business, the sale proceeds of such property can be repatriated only with the prior approval of the Reserve Bank. Further, acquisition of immovable property by entities who had set up Branch Offices in India and incorporated in Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan would require prior approval of Reserve Bank to acquire such immovable property. However, if the foreign company has established a Liaison Office, it cannot acquire immovable property. In such cases, Liaison Offices  can take property by way of lease not exceeding 5 years.

Can Foreign Embassies / Diplomats / Consulate General purchase / sell immovable property in India ?
Yes - Foreign Embassies / Diplomats / Consulate Generals can purchase and sell any immovable property other than agricultural land / plantation property / farm house in India with prior clearance from the Government of India, Ministry of External Affairs. The payment should be made by foreign inward remittance through normal banking channel.

If a foreign national is a person resident in India as per the provisions of Section 2(v) (i)B of the FEMA, 1999, does he require approval of Reserve Bank to purchase any immovable property in India ?
A foreign national resident in India does not require approval from Reserve Bank from FEMA angle, but approvals if any required in terms of regulations prescribed by other authorities such as the concerned State Government etc. will have to be obtained by him / her. However, a foreign national resident in India who is a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan requires specific prior approval of Reserve Bank.

Can foreign nationals of non-Indian origin resident in India or outside India who had earlier acquired immovable property under FERA with specific approval of Reserve Bank continue to hold the same? Can they transfer such property?
Yes, they may continue to hold the immovable property. However, they can transfer the property only with the prior approval of Reserve Bank.

Can residential/commercial property be mortgaged by a foreign national of non-Indian origin ?

A foreign national of non-Indian origin can mortgage only with prior approval of Reserve Bank and a foreign company which has established a Branch Office or other Place of business in accordance  with FERA/FEMA regulations has general permission to mortgage the property with an authorized dealer in India.

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