FDI in Real Estate (With Special Reference to Mauritius)

FDI in Real Estate

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Real Estate Sector is and was on Boom. The Following Article will clarify the need, ways and legal complications for FDI in Real Estate in India. Specially Taxation issue with Maritius.

WAYS IN WHICH FOREIGN INVESTMENT CAN BE MADE IN REAL ESTATE

 FDI by NRI in Indian company engaged in Real Estate Development

 FDI by persons resident outside India (e.g. LLP, LLC, Foreign Company, Private Equity Fund) in Indian company engaged in Real Estate Development

 FDI in SEZ, Hotels, IT Parks etc.

 Portfolio Investment by FIIs and NRI’s in an Indian Listed Companies engaged in Real Estate development.

 ECB in Real Estate Sector

Applicable and Governing Laws and Regulations

 Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations 2000

 FDI Policy announced by Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce, Government of India. [Consolidated FDI Policy Circular 1/2010, 1st April]

 If investment is through ECB route: Foreign Exchange Management (Borrowing or lending in Foreign Exchange Regulations) 2000

 Transfer of Property Act 1882

 Indian Registration Act 1908

 Indian Urban Land (Ceiling and Regulation) Act 1976

 Stamp Acts (Stamp Duty which differs from state to state)

 Municipality Laws to get Occupancy certificates

Allowed sectors under automatic route for FDI by a Company outside India in Real Estate

 Companies from Mauritius (or any other foreign company in any form) are allowed to Invest up to 100% under Automatic Root.

 FDI allowed sectors:

 Townships

 Housing

 Built-up Infrastructure and Construction-development projects (e.g. Housing, commercial premises, educational institutions, recreational facilities, city and regional level infrastructure etc.)

 Hotels (Eligibility conditions are different)

 Tourism (Eligibility conditions are different)

 Hospitals (Eligibility conditions are different)

 Mass Rapid Transportation system (Eligibility conditions are different except lock-in period)

 Resorts

 Special Economic Zones (Eligibility conditions are different)

 FDI not allowed in Real Estate Business or for Trading in Transferable development Rights other than as mentioned above.

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Published In: General Business Updates, Securities Updates, Tax Updates, Mergers & Acquisitions Updates, Commercial Real Estate Updates

Reference Info:India

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Devesh Pandey, Candidlex Advisors LLP (Legal and Management Consultants) | Attorney Advertising

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Devesh Pandey
Candidlex Advisors LLP (Legal and Management Consultants)

Devesh Pandey is an Indian corporate legal adviser venturing his way into specialized corporate... View Profile »


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