Saturday 10 October 2015

NRI investing in India? Here’s how it works


To begin with, let’s list the people who can invest in India, aside from the obvious of resident Indians. NRIs (Non-Resident Indians) and their spouses as well as PIOs (Persons of Indian Origin) are allowed to possess both residential and commercial property on Indian soil. OCBs (Overseas Corporate Bodies) and trusts which have more than 50% NRI ownership/stake are also allowed to invest in Indian real estate. At the same time, foreigners or foreign owned organizations have certain processes and permissions to obtain from the Reserve Bank of India to obtain property in the country. In their case, leasing is a better option.

It is important to remember that while investing as an NRI or OCB, the property should be rented out or occupied immediately! You cannot invest in real estate and leave it empty. While you are allowed to invest in all types of residential and commercial property from townships and industrial factories to apartment complexes and showrooms, an NRI or OCB cannot invest or own agricultural land in India.

However, there are rules that the RBI imposes on income made from property owned by NRIs. All income generated from rentals is to be deposited in an NRO (Ordinary Non-Resident Rupees) account. At the same time, shares and debentures can be returned after a time period of three years.


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