Can NRIs and Overseas Corporate Bodies (OCBs) invest in India?
Yes. NRIs and OCBs can make investments in India provided these investments are in agreement with Indian laws, RBI rules and regulations as well as other regulations set forth by the Foreign Investment Promotion Board (FIPB).
What are the formalities required to be completed by foreign citizen of Indian Origin for purchasing residential immovable property in India under the general permission?
Foreign citizens of Indian Origin are required to file a declaration in form IPI 7 with the Central Office of Reserve Bank, Mumbai within a period of 90 days from the date of purchase of immovable property or final payment of purchase consideration along with a certified copy of the document as evidence of the transactions and bank certificates regarding the consideration paid.
Can immovable property purchased by NRIs be sold without the permission of the Reserve Bank?
Yes, Reserve Bank has granted general permission for sale of immovable property purchased by NRIs. However if the property is purchased by another foreign citizen of Indian Origin, funds towards the purchase consideration should either be remitted to India or paid out of balance in NRE/FCNR accounts.
Can sale proceeds of such property, if and when sold, be remitted out of India?
With respect to residential properties purchased on or after 26th May 1993, the Reserve Bank of India considers applications for repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for the acquisition of the property for two such properties. The balance amount of sale proceeds if any or sale proceeds in respect of properties purchased prior to 26th May 1993, will have to be credited to the ordinary non-resident rupee account of the owner of the property.
Can foreign citizen of Indian Origin acquire or dispose of residential property by way of gifting?
Yes. The RBI has granted general permission to foreign citizen of Indian origin to acquire or dispose of properties (up to two houses) by way of gift from or to a relative who may be an Indian Citizen or a person of Indian origin whether resident in India or not, subject to compliance with applicable tax laws.
Can a foreign citizen of Indian Origin acquire commercial properties in India?
Yes. Under the general permission granted by Reserve Bank properties other than agricultural land/farm house/plantation property can be acquired by foreign citizen of Indian Origin provided the purchase consideration is met either out of inward remittance in foreign exchange through normal banking channels or out of funds from the purchaser's NRE/FCNR accounts maintained with banks in India and a declaration is submitted to the Central Office of Reserve Bank in Form IPI 7 within a period of 90 days from the date of purchase of the property/final payment of purchase consideration.
While purchasing real estate is it necessary to grant a Power of Attorney (POA) to the developer?
It is not necessary to grant POA to the developer. However not granting the POA may lead to time delays and associated problems involved with the mailing of all documents to your foreign residence. Granting POA can also be useful in case of home loans.
Can NRIs obtain loans for buying a property for residential purposes from financial institutions providing housing finance? Yes. The Reserve Bank has enabled certain financial institutions that deal in housing finance to grant housing loans to NRIs, subject to certain conditions.
What are the criteria for NRIs to avail of home loans in India?
According to the Reserve Bank guidelines for NRIs the loan amount shall not exceed 85% of the cost of the dwelling unit. Own contribution, which is the cost of dwelling unit financed less the loan amount, can be met from direct remittances from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India.
Repayment of the loan, comprising the principal and interest including all the charges are to be remitted from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India.