Case: I wish to invest in commercial property(shop/office) by forming my own company(investment holding co). Income will be purely rental income. This is purely for tax reasons as I am an NRI. My question is: 1. Will banks give property loans to such company? 2. Out of various classes of companies, which class will I need to form?
As clarification, my capital will be sufficient only for 1 shop ~400sqft in Pune.
Yes, a non-resident Indian can buy either a residential property or a commercial property in India but he cannot buy agricultural land, plantation land or a farm house in India. He cannot even acquire such property as a gift. The RBI has given a general permission to banks and housing finance companies registered with the National Housing Bank to provide loans to NRIs for buying residential and commercial property in India.
Hi Ankur, But he has to remember that payment for the purchase of property can be made either by way of funds remitted to India from abroad through regular banking channels or through the balance in the NRE, NRO or FCNR Account.
Good Evening Jay!! The reserve Bank Of India (RBI) has given general permission to invest and hence it is not necessary for NRIs to seek permission or license for every investment they intend to make.
I am agree with Dwarkesh but there are certain rules which you have to follow. An NRI buying an immovable property in India does not require any special permission. However, the payment can’t be made in foreign currency. NRIs can make the purchase using Indian currency, the Rupee, through funds received in the country by means of normal banking channels. These funds have to be maintained in a non-resident account under the foreign Exchange management Act (FEMA) and the Reserve Bank of India (RBI) regulations. There are also no restrictions on the number of immovable properties that an NRI may purchase, either residential or commercial.
Hi Jay, I think you should consult a good lawyer in this matter. Only, he can suggest you the best route to invest in India. He may guide you in a proper way but yes, they will charge their nominal fees for it.
Hi, The Government attaches importance to investments by NRIs. Government has provided a liberalised policy framework for approval of NRI investments through both the Automatic and the Government route. NRI are permitted to invest upto 100% equity in the Real Estate (without being subject to conditions under PN No.2 of 2005) and Civil Aviation Sectors. Automatic Approval is given by the RBI to all NRI proposals with their investment upto 100% for all items/activities except a few exceptions mentioned in Press Note 7 (2008 series) read with sector specific guidelines. Government approval is given for all proposals not qualifying for Automatic Approval.