Foreign Direct Investment in India in Real Estate Sector eas and is on boom now. This article throws light upon the Opportunities and Legal Structure for FDI in India in Real Estate Sector with Special Refernce to Taxation and Maritius Route.
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:
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)
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.