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Investment opportunities for foreigners

Last updated: January 26 2013
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  • Investment opportunities for foreigners

    Many of my friends abroad ask me this question:

    Whether according to law, it is possible for foreigners to aquire immovable properties in India to build up a portfolio. Also, what are the possiblities to take part in the Indian realty market as a foreign investor?
    So, I thought why not discuss this issue with the forum members. Maybe, many foreign investors want to know this. Also, I thought...there cannot be a better platform than this to get hordes of replies.

    Your answer can help investments into the country
  • #2

    #2

    Re : Investment opportunities for foreigners

    A summarized account....


    Thanks for raising a very important issue. You're right.
    This is one of the most prioritised question among foreign investors. I'd like to summarize it this way.

    Hope this proves to be useful for our investor friends seeking investment opportunities in India.

    Indian laws do not permit foreign nationals to purchase immovable property in India if they reside outside India. However, immovable property may be purchased by a foreign national residing outside India to carry on a business activity with the approval of the Reserve Bank, the country's central bank.

    As for laws pertaining to FDI in real estate, up to 100% is allowed in
    townships, housing, built-up infrastructure and construction-development
    projects (which would include, but not be restricted to, housing, commercial
    premises, hotels, resorts, hospitals, educational institutions, recreational
    facilities, city and regional level infrastructure) covering a minimum
    built-up area of 50,000 sq.m.

    The minimum capital of USD 10 million for wholly owned subsidiaries and USD
    5 million for joint ventures is required to be brought in within 6 months of
    starting the business in India.

    50% of the project would have to be developed within 5 years from the date
    of obtaining all statutory clearances. Sale of undeveloped plots is not
    permitted.

    Comment

    • #3

      #3

      Re : Investment opportunities for foreigners

      Corruption??

      My only worry about investing in india is the level of corruption that leaves to insecurity. cash is required everywhere. the cost of corruption out does the property price.

      I guess the image of India is the biggest killer when it comes to secure foreign investors.

      What's the security india has to offer? Is there any company that deals with foreign investors with honesty?

      Just a thought why doesnt indians invest overseas countries like Australia and America where the systems well structured and dishonesty leads to jail. And most of all your investments is secured.

      Comment

      • #4

        #4

        Re : Investment opportunities for foreigners

        I see that FDI is limited to "construction/development" projects greater than 50k sq. meters. Does that minimum same size restriction apply to completed/existing commercial structures also?

        Comment

        • #5

          #5

          Re : Investment opportunities for foreigners

          Originally posted by foreign investors View Post
          My only worry about investing in india is the level of corruption that leaves to insecurity. cash is required everywhere. the cost of corruption out does the property price.

          I guess the image of India is the biggest killer when it comes to secure foreign investors.

          What's the security india has to offer? Is there any company that deals with foreign investors with honesty?

          Just a thought why doesnt indians invest overseas countries like Australia and America where the systems well structured and dishonesty leads to jail. And most of all your investments is secured.
          What you have said is mostly true. But of late, genuine investors from abroad have been investing in genuine projects and these deals are transparent also. The local laws have to be strictly adhered to. The downside is that it costs more since the taxes are paid properly at every stage. Only when the investor tries to save money by evading taxes, the problems start.

          This results in the end product costing a little more than competitors. But it is workable as there are genuine buyers who pay a little premium for honesty.

          Comment

          • #6

            #6

            Re : Investment opportunities for foreigners

            Regarding investing in India

            I think that we are passing through a major phase where more foreign players participate in the Real estate sector.

            As a result of which old archaic pratcises will be out.More transparency will set in and also rules will be put in place for better valuation and guinineness.

            Comment

            • #7

              #7

              Re : Investment opportunities for foreigners

              Originally posted by ianaam View Post
              I see that FDI is limited to "construction/development" projects greater than 50k sq. meters. Does that minimum same size restriction apply to completed/existing commercial structures also?
              According to FDI press note 2, These are the criteria for FDI investment.
              1. Minimum Area to be developed In case of serviced housing plots the minimum area should be 10 hectares and in case of construction development the minimum area should be 50,000 sqmtr.

              So the minimum size restriction apply to all projects

              Comment

              • #8

                #8

                Re : Investment opportunities for foreigners

                dear friend a foreigner can buy lands in india for making investments permitted as per FDI regulation. for example, a foreigner want to do a housing proejct india, he can buy the property and do the business

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                • #9

                  #9

                  Re : Investment opportunities for foreigners

                  Fdi

                  Originally posted by cajawahar View Post
                  dear friend a foreigner can buy lands in india for making investments permitted as per FDI regulation. for example, a foreigner want to do a housing proejct india, he can buy the property and do the business
                  Can you please clarify my following doubts:

                  1. Can a foreigner ( Not NRI ) buy 50 --100 flats from a under construction project in his / her name directly by filling the builder application forms. If so, what are the procedures to transfer the funds to builders account ?

                  2. Can he sell out the bought flats as per his convenience and transfer the funds to his foreign account?

                  3. Can he able to rent out those flats and can he transfer the collected rent to his foreign account ?

                  If all the above questions are resulting "No" , then what are the other alternatives to make it "YES"....

                  Comment

                  • #10

                    #10

                    Re : Investment opportunities for foreigners

                    RBI Guidelines

                    Check it here

                    Reserve Bank of India

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