Indian economy is moving towards a free market system through liberalised investment policies, trade policies and fiscal reforms. This is being achieved through economic reforms aimed at making India an investment friendly destination. The Government of India provides several facilities and incentives for Non Resident Indians/Persons of Indian Origin and Overseas Corporate Bodies to encourage them to invest in India.
A part of the GBS’s “Destination India” series, this guide looks at the various policies and procedures relating to foreign investment into India by Non Resident Indians/Persons of Indian Origin and Overseas Corporate Bodies.
The Government has announced the launching of a People of Indian Origin Card, which will allow visa free entry to Indian origin people living abroad and give them all the rights enjoyed by NonResident Indians (NRI’s) including purchase of non-agricultural land. They can also benefit from housing schemes of the Life Insurance Corporation, State Governments and other Gove rnment agencies. It is eligible for the Indians who hold a foreign passport living abroad till the fourth generation.
Fee for PIO Card is US $ 310.00 for adult and for children below the age of 18 years is US $ 155.00 (effective from September 15, 2002). Validity of new PIO card will be 15 years from the date of issue.
Besides making their journey back to their roots simpler, easier and smoother, this Scheme entitles the PIO to a wide range of economic, financial, educational and cultural benefits. The benefits envisaged under the Scheme include: –
NRIs have a wide variety of investment options before them. These include the following:
1. Investment in shares and debentures of Indian Companies
2. Direct Investment in Indian industries / Joint Ventures
3. Deposits with Indian Companies/ Firms, etc. including NBFCs
4. Investment in Bank Accounts
5. Portfolio Investment in Listed Companies
6. Investment in dated Government securities, treasury bills, Units of domestic/money market mutual funds, National Plan/Savings Certificates
7. Investment in Bonds of Public Sector Undertaking, disinvested shares of Public Sector Enterprises
8. Investment in immovable properties, Housing and Real Estate Business.
Investment in any of the above can be made both on repatriation as well as on non-repatriation basis.
Foreign investment is allowed in all priority sectors, except the following, subject to certain sectoral caps, viz.
There have been some relaxations in respect of banking, NBFCs, Oil refining sector and Venture capital funds.
A non-resident Indian citizen does not require permission of the Reserve Bank to acquire residential
/commercial property in India. Foreign citizens of Indian origin require permission of the Reserve
Bank to purchase immovable property in India for their residential use.
The Reserve Bank has granted general permission to foreign citizens of Indian origin, whether
resident in India or abroad, to purchase immovable property in India for their bona fide residential
purposes. They are, therefore, not required to obtain separate permission of the Reserve Bank.
The purchase consideration for the residential immovable property to be paid by foreign citizens of
Indian origin under the general permission, should be met either out of inward remittances in
foreign exchange , through normal banking channels or out of funds from NRE/FCNR accounts
maintained with banks in India.
NRIs/PIOs/OCBs are permitted to invest up to 100% equity in new industries/expansion/diversification of existing industries listed as High Priority Industries.
100% investment with repatriation benefits is also allowed in trading companies primarily engaged in export activities and registered as Export/Trading/Star Trading/Super Star Trading Houses with the Directorate General of Foreign Trade.
No prior permission from the Government of India/Reserve Bank of India is required for receiving inward remittances and issue of shares to NRIs/PIOs/OCBs. The Indian Company is however, required to file form ISD(R) along with relevant documents with the concerned Regional Office of the Reserve Bank of India within 30 days of issue of shares.
In the case of specified consumer goods industries, dividend balancing out of export earnings over a period of 7 years from commencement of commercial production has to be met.
INVESTMENT IN 100% EXPORT ORIENTED UNITS (EOUs), UNITS IN FREE TRADE ZONE/EXPORT PROCESSING ZONES, SOFTWARE TECHNOLOGY PARKS (STPs), ELECTRONIC HARDWARE TECHNOLOGY PARKS (EHTPs)
Up to 100% equity on repatriation basis is permitted by NRIs/PIOs/OCBs. Application for permission has to be made to the Development Commissioner of the Free Trade Zone/Export Processing Zone /Chief Executive of the STP/Designated officer of the EHTP.
NRIs/PIOs/OCBs can invest up to 100% in new issues of equity share of Indian companies engaged in:
1. Development of serviced plots and built up residential premises.
2. Real Estate covering construction of residential and commercial premises including business centres and offices
3. Development of townships.
4. City and Region level urban infrastructure facilities including roads and bridges
5. Manufacturing of building materials
6. Financing of Housing Development.
7. Repatriation of original investment is permitted after a lock in period of 3 years.
In the case of OCBs, repatriation of net profits (up to 16%) arising from the sale of such investments will be permitted after a lock in period of 3 years. There is no “lock-in-period” for repatriation of dividend/interest on shares/convertible debentures by OCBs. Application for investment has to be made in form ISD(R) to the Central Office of RBI.
Upto 100% equity participation is permitted. Repatriation of investment and remittance of dividends will be permitted after a lock in period of 5 years and out of accumulated NetForeign Exchange Earnings. Approval has to be obtained from the Foreign Investment Promotion Board (FIPB).
NRIs/PIOs/OCBs are permitted to make bulk investment on private placement basis, upto 100 equity capital of any sick company either by way of purchase of equity shares from the existing shares holders or in the form of subscription to new equity shares of the sick company. There is no ‘lock-in-period’ for such investments. The Indian company has to apply for permission to the Central office of the Reserve Bank of India in form RSU.
NRIs/PIOs/OCBs are permitted to subscribe to new issues of equity shares/convertible debentures of new or existing companies (both private and public limited) for setting up new industrial/manufacturing projects or expansion/diversification of such projects, as well as hospitals/diagnostic centres, hotels(3/4/5 star), shipping, development of computer software and oil exploration services.
No prior permission is required for receiving inward remittances and issue of shares to NRIs/PIOs/OCBs. The Indian company is required to file form ISD with relevant – 16 – documents with the concerned Regional office of the Reserve Bank of India within 30 days of issue of shares.
NRI’s can invest upto 40% of the paid up capital in Private Banks. (Inclusive of 20% allowed to other foreign investors)
NRIs/PIOs/OCBs are permitted to subscribe to new issues of equity
shares/convertible debentures of new or existing companies (private and public
limited) in the fields of finance, hire purchase, leasing, trading or other services
(except agriculture/plantation activities), and establishment of schools/colleges in
India upto 24%.
No prior permission is required for receiving inward remittance and issue of share to
NRIs/PIOs/OCBs. The Indian company is required to file form ISD(R) with relevant
documents with the concerned Regional Office of the Reserve Bank of India within
30 days of issue of shares.
In the case of items reserved for small scale sector, investment by NRIs/PIOs/OCBs
upto 24% is allowed. Application for permission has to be made in form
FC/IL(SIA)to the Secretariat for Industrial Assistance.
NRIs/PIOs/OCBs can invest in domestic, private or public sector Mutual Funds on
repatriation basis. The concerned Mutual Fund is required to obtain permission from
the Reserve Bank of India by applying in Form ISD(R).
NRIs/PIOs/OCBs are permitted to invest in Bonds issued by Public Sector
Undertakings. The concerned Public Sector undertaking should obtain necessary
permission from the Government of India for raising funds through such Bonds.
They are also required to obtain permission from the Central office of Reserve Bank
of India by applying in form ISD(R).
Shares disinvested by Government in such public sector enterprises can be purchased
subject to ceiling applicable for portfolio investment. Application has to be made by
NRIs/PIOs/OCBs to the designated branch of State Bank of India.
NRIs/PIOs (not OCBs) will be permitted to place funds in Fixed Deposit with Public
limited companies including Government companies with limited liabilities (with
full repatriation benefits).
Application for permission has to be made by the Indian company through its bank
to the Regional Office of the Reserve Bank of India. The approval will also include
authorization for remittance of interest and maturity proceeds to the depositor’s
NRIs/PIOs are permitted to invest their funds in Government securities (except
bearer securities like Indira Vikas Patra/Kisan Vikas Patra) or units of the Unit Trust
of India and National Savings Certificates through authorized dealers. Units can also
be purchased directly from the Unit Trust of India and freely transferred and sold.
If these are purchased out of funds remitted from abroad or from NRE /FCNR
accounts, sale/maturity proceeds can be repatriated.
Proprietary/Partnership concerns – NRIs/PIOs can invest by way of capital
contribution to any proprietary or partnership concern engaged in
industrial/trading/commercial activity(except agricultural/plantation activities or real
estate business) up to 100%. The principal amount is non-repatriable. (This facility
is not available to OCBs).
The Indian company is required to file a declaration with Reserve Bank of India
within 90 days in form DIN.
NRIs/PIOs/OCBs are permitted to subscribe to shares/convertible debentures of
Indian companies on non-repatriation basis. The Indian companies can issue shares
or convertible debentures of new/right issues to NRIs/PIOs on non-repatriation basis
provided the company is not engaged in agricultural/plantation or real estate
business. The payment towards these shares shall be received by inward remittances
or from NRE/FCNR/NRO accounts.
The Indian company should file a declaration in form DIN within 90 days from the
date of receipt of investment with the concerned Regional office of the Reserve Bank
Under the scheme, NRIs/PIOs/OCBs are permitted to invest in shares/debentures (convertible/nonconvertible) of Indian companies through stock exchanges in India.
HOLDING IN JOINT NAMES: Shares/debentures purchased out of funds remitted from abroad
in convertible currency or from the investor’s NRE/FCNR account can be held jointly, the first
holder being the NRI/PIO and the second holder a close relative of NRI/PIO. However, if the
resident inherits the shares/debentures, there will be no repatriation benefit.
REMITTANCE OF DIVIDEND/ INTEREST/ OTHER INCOME AND SALE/TRANSFER:
The same is permitted. The Indian company has to apply through the authorized dealer for this
REMITTANCE OF INCOME ON INVESTMENT ON NON-REPATRIATION BASIS: From
the Financial year 1996–97, the entire income accruing on such investments is freely repatriable
after payment of tax. The NRIs/PIOs/OCBs has to designate a branch of an authorized dealer
through whom such remittance is to be made and apply to the Regional Branch of RBI under whose
jurisdiction the designated branch is situated in form RCI. The Reserve Bank of India will issue
necessary approval/exchange permit to the designated branch.
Other facilities available include:
Sale/Transfer of Shares/Bonds/Debentures by NRIs to Residents ;
* Transfer of Rupee Securities by Non-Residents as Gifts;
* Transfer of Rupee Securities to Non-Residents as Gifts;
* Loans Abroad against Securities provided in India;
* Loans in India to Non-Residents against Shares/ Securities/Properties held by them in India;
* Loans in India to NRIs against security of NRI Bonds issued by the State Bank of India;
* Loans in India against Guarantees by Non-Residents;
* Loans to Residents against Shares/Securities/Properties in India by Non-Residents;
* Loans from Non-Resident Relatives
Sale of Shares under Portfolio Investment Scheme: The general permission granted by RBI
covering sale of share acquired under the portfolio investment scheme on repatriation basis by
individual NRIs/PIOs is extended to OCBs also.
Loans from NRI Relatives: General Permission will be given by RBI for interest free nonrepatriable
loans from NRI relatives for personal purposes and for business activities. Interest free
repatriable loan upto US$ 2.5 lakhs and maturity of 7 years will be cleared by RBI automatically.
Other cases will continue to be cleared by RBI on a case-to-case basis.
Transfer of Funds: NRE Accounts: RBI will permit transfer of funds from one Non Resident
External (NRE) account to the NRE account of another person for any purpose.
Companies with NRI Participation: The general permission granted by RBI for subscription to
memorandum and articles of association by NRI’s is extended to all companies except those
engaged in agricultural/plantation activities.
NRO Account Condition: The declaration that the depositor will not make available foreign
currency to residents against payment of rupees by credit to the NRO account in India prescribed by
RBI for opening NRO accounts by authorized dealers (ADs) has been dispensed with.
Rupee Loan to NRIs: RBI has granted general permission to ADs to sanction rupee loans to NRI’s
against the security of shares held by them either on repatriation or non-repatriation basis, subject to
Remittance of Sale Proceeds of Shares Abroad: NRI’s are permitted to raise loans abroad against
the security of shares of Indian companies held by them on repatriation basis. However, in case the
shares are sold and the amount of sale proceeds is required to be remitted abroad for repaying the
loan, prior permission of RBI is required. The aforementioned condition has been waived and ADs
are permitted to remit the sale proceeds to the overseas bank who has extended the loan to the
NRI’s, net of applicable taxes, if any.
Rupee loans against immovable property held in India: NRI’s are permitted to raise rupee loans
on non-repatriation basis in India against the collateral of their immovable property irrespective of
the fact whether the property is purchased by remittances from abroad or acquired otherwise.
ADs Authorized to Extend Rupee Loans to NRI’s: RBI has granted permission to certain housing
finance companies to extend rupee loans to NRI’s for acquisition of houses in India. These loans are
required to be repaid by NRI’s by sending remittances from abroad. This facility has been extended
to ADs who may be willing to extend rupee loans to NRI’s for acquisition of residential houses in
India subject to the same terms and conditions as applicable to loans granted to NRI’s by housing
Ceiling of Loans by Housing Finance Institutions: The ceiling on total loan to be advanced and
the percentage of the project cost which can be funded, and the purposes for which loans may be
given are brought at par with the ceiling and percentage etc. for residents.
Shares of Companies Supplying Second Hand Machinery: The powers for issue of shares to
NRI’s/OCBs on repatriation basis against payments made by them directly to suppliers in case of
second hand machinery are delegated to RBI subject to the condition that the acquisition of
machinery fulfils the requirements relating to import of second hand capital goods without license
under the Export-Import Policy.
Payment of Interest on Delayed Refunds: RBI has granted general permission to Indian
companies for payment of interest on delayed refunds of share subscriptions if such payment of
interest is as per SEBI guidelines.
Safe Custody of Securities: The safe custody of securities on behalf of NRIs/PIOs is permitted to
be done by institutional custodians besides the ADs.
Investment in Health Sector: Keeping in view the need to augment health services and to facilitate
NRI investment, the Government has decided that henceforth the two conditions for investment in
the health sector will no longer apply. The conditions were that:
The Government has decided to remove these conditions following representations received from
NRI investors that the conditions stipulating mandatory offer of facilities free of cost would render
NRI investments in health sector and diagnostic centres commercially unviable and the condition
requiring equipping diagnostic centres as per specified norms is unduly restrictive. It is hoped that
the exclusion of these two conditions will facilitate greater NRI investment in the health services
sector and will encourage induction of up-to-date diagnostic facilities.
The Tax liability of a person under the Income Tax Act depends on the residential status in the
financial year (1st April to 31st March) in which the income accrues or arises to him or is received
by him. For income tax purposes the residential status of an individual generally depends on his
physical presence or stay in India and not on his nationality or domicile.
An individual is said to be a resident in India in any financial year if he has been in India during that year:
1. for a period of 182 days or more ; or
2. for a period or periods of 60 days or more and has also been in India within the preceding four years for a period or periods of 365 days or more.
However, the period of 60 days is increased to 182 days in the case of: –
1. a citizen of India or person of Indian origin who has been outside India and comes on a visit;
2. when a citizen of India leaves India for purpose of employment outside India or as a member of a crew of an Indianship.
An individual is said to be ‘not ordinarily resident’ any financial year if:
An individual would be “not ordinarily resident” if he fulfills either of the above conditions.
A Hindu Undivided Family is said to be ‘not ordinarily resident in India if its manager is ’ not
ordinarily resident’ in India. For calculating the length of the manager’s stay in India periods of stay
in India of successive managers of a Hindu Undivided Family have to be added up. The status of
‘resident but not ordinarily resident’ is available only to individual and Hindu Undivided Families.
A person who is not resident in India is a ‘non-resident’
Based on the residential status of a tax payer and the place where the income is earned, the income
that is included in the total income is as under :
Resident All income whether earned in India or outside India Not Ordinarily All incomes: –
Since a resident is liable to pay tax in India on his ‘total world income’, it is possible that he may
have to pay tax on his foreign income in that country also. To avoid such a situation the
Government of India has entered into agreements for avoidance of ‘double taxation’ with different
With a view to attract investment by Non-Resident Indians(NRIs), certain relieves, exemptions and
incentives have been provided (Chapter XII A of Income Tax Act).
For Income Tax purposes, a Non-resident Indian has been defined as an individual being a citizen of
India or a person of Indian origin who is not a resident. A person is considered to be of Indian
Origin if he or either of his parents or his grand parents was born in undivided India.
Income from foreign exchange assets (any specified asset which the assessee has acquired or
purchased or subscribed to in convertible foreign exchange) comprising of
shares/debentures/deposits with Indian companies, Central Government securities or any other
notified assets subscribed to or purchased in convertible foreign exchange can be charged at a flat
rate of 20%. No deduction, basic exemptions etc. will be available under the 20% scheme.
Long term capital gains on specified foreign exchange assets such as Units/Bonds/Shares and listed
securities as specified by the Government held by NRIs are taxable @ 10%.
Minimum holding period for allowing this rate is one year for shares and other securities listed in
stock exchanges in India and units of specified mutual funds. For other assets the minimum holding
period is 36 months.
If the proceeds are reinvested within six months of such transfer in any specified securities and new
assets are retained for 3 years, the proceeds are exempted from payment of Income Tax.
Income from units of UTI are totally exempted from payment of Income Tax.
On short time capital gains, NRIs are liable to pay capital gains tax at the same rate that is
applicable to residents i.e. @ 30%.
Income from following investments made by NRIs out of convertible foreign exchange is totally
exempt from income tax.
The above exemptions will cease immediately on the NRI becoming resident.
Where the NRI has income from only foreign exchange assets or income by way of long term
capital gains from foreign exchange assets or both, and tax deductible at source from such income
has been deducted he is not required to file return of income as otherwise required under the Income
The special provisions in relation to investment income from foreign exchange assets (other than
shares of an Indian company)will continue , even after the NRI becomes resident till transfer or
conversions of such assets into money, if the NRI so wishes.
Wealth Tax is levied only on non-productive assets like urban land, buildings (except one house
property),jewellery, bullion, vehicles, cash over Rs.50,000 etc. Wealth Tax is levied @ 1% over
aggregate value of chargeable assets in excess of Rs. 1.5 million.
NRI/OCB desirous of obtaining advance ruling may make an application stating the question on
which the ruling is sought.
The question which could be of law or fact should relate to a transaction undertaken or proposed to
be undertaken by the applicant.
A foreign company or individual planning to set up business operations in India can do so in the following ways:
Foreign Company is one, which has been incorporated outside India and conducts business in
India. These companies are required to comply with the provisions of the Companies Act, 1956.
Foreign Company can set up Liaison, Project and Branch Offices in India. Such companies have
to register themselves with Registrar of Companies (ROC) within 30 days of setting up a place
of business in India.
One of the practices for foreign companies to enter the Indian markets is the setting up of a
Liaison/Representative office. A Liaison office is not allowed to undertake any business
activity in India and cannot therefore, earn any income in India. The role of such offices is,
therefore, limited to collecting information about possible market opportunities and- 33 –
providing information about the company and its products to the prospective Indian
The opening and operation of such offices is regulated by the Foreign Exchange
Management Act–1999 (FEMA). Approval from the Reserve Bank of India (RBI) is required
for opening such offices. There are certain standard conditions imposed for operations of
Expenses of such offices are to be met entirely through inward remittances of foreign
exchange from the Head Office abroad. Such offices should not undertake any trading or
commercial activities and their activities should be limited to collecting and transmitting
information between the overseas Head Office and potential Indian customers.
Such offices should not charge any commission or receive other income from Indian
customers for providing liaison services. Liaison/representative offices also have to file an
annual activity certificate etc. from a Chartered Accountant to RBI. Permission to set up
such offices is initially granted for a period of 3 years and this may be extended from time to
Foreign Companies planning to execute specific projects in India can set up temporary
project/site offices in India. For the purpose specific approval from the RBI is required for
setting up a project office. Such approval is generally accorded in respect of projects of – 34 –
approved by appropriate authorities or where the projects are financed by Indian
bank/Financial Institution or a multilateral/ bilateral international financial institution.
Government has allowed foreign companies engaged in manufacturing and trading activities
abroad to set up Branch Offices in India for the following purposes:
A branch office is not allowed to carry out manufacturing, processing activities
directly/indirectly. Branch Office will have to submit activity certificate from a Chartered
Accountant on an annual basis to Reserve Bank of India. For annual remittance of profit
Branch Office may submit required documents to authorised Bank. Permission for setting up
branch offices is granted by the Reserve Bank of India on a case-to-case basis. RBI
normally, considers the operating history of the applicant company worldwide and its
proposed activities in India for granting the approval.
A foreign company can commence operations in India through incorporation of a company
under the provisions of the Indian companies Act, 1956. Foreign equity in such Indian
companies can be up to 100% depending on the business plan of the foreign investor, prevailing
investment policies of the Government and receipt of requisite approvals. For registration as an
Indian company and its incorporation, an application has to be filed with Registrar of
Companies (ROC). Once a company has been duly registered and incorporated as an Indian
company, it will be subject to same Indian laws and regulations as applicable to other domestic
Foreign Companies can set up the operations in India by forgoing strategic alliances with Indian
partners. Setting up of operations through a joint venture may entail the following advantages
for a foreign investor.
|Type of Investment||Ceiling on Amount of Investment||Remarks|
|A. Portfolio Investment in Equity shares/convertible debentures thro’ stock exchanges in India||Within an overall ceiling of 10% of the total paid- up equity share capital / 10% of the total paid- up value of each series of convertible deben- ture issue – Individual ceiling on each NRI/OCB is 5% out of the overall 10% mentioned above. This ceiling is applicable to purchases both on repatriation and non-repatriation basis. Indian listed Companies can allow NRIs/OCBs to invest up to 24% instead of 10% by passing a special resolution.||NRI/OCB has to apply thro’ designated branch of Bank and all such trans- actions are to be routed thro’ this account only. Payment to be made either thro’ inward remittance or t hro funds held in NRE/FCNR/NRO/ NRNR/NRSR account.|
|B. Investment in new issues of equity.preference shares/convertible debentures of public/private limited companies NOT BEING CHIT FUND/NIDHI OR AGRICULTURAL/ PLANTATION COMPANY OR REAL ESTATE OR CON- STRUCTION OF FARM HOUSES AND COMPANIES IN PRINT MEDIA SECTOR||No Limit||Consent of SEBI may have to be obtained , if required|
|C. Investment in non-convertible debentures of Indian Companies NOT BEING CHIT FUND/NIDHI OR AGRICULTURAL/ PLANTATION COMPANY OR REAL ESTATE OR CON- STRUCTION OF FARM HOUSES AND COMPANIES IN PRINT MEDIA SECTOR||No Limit||Indian Companies not to engage in agricultural/plantation/real estate business or trading in TDRs or to act as Chit Fund or Nidhi Company. Payment to be made either thro’ inward remittance or thro funds held in NRE/FCNR/NRO/NRNR/NRSR account.|
|D. Investment in partner- ship/proprietary concerns engaged in any industrial, commercial, or trading activity other than agricul- tural/plantation/real estate Business||No Limit||OCBs are not allowed to invest under this Scheme. No RBI permission required. Concerned partnership/proprietorship concerns to obtain a non-repatriation undertaking from the NRI investors.|
|E. Investment in Units of Domestic Mutual Funds, dated Govt. Securities (other than bearer), Money Market Mutual Funds, National Plan/Savings Certificates, including UTI. (other than bearer securities)||No Limit||Payment to be made either thro’ inward remittance or thro funds held in NRE/FCNR/NRO/NRNR/NRSR account of the investor.|
|F. Investment in Commercial Paper (“CP”) of Indian Companies||No Limit||CPs will be non-transferable and the Company issuing CPs will have to comply with the requisite RBI Guidelines|
|G. Investment in Foreign Currency Bonds/Depository Receipts||No Limit||Indian Company will have to submit details to RBI.|
|H. Investment in Immovable property other than agricultural land/farm House/plantation property||No ceiling||–|
|I. Deposits with firms/ proprietorship concerns/ companies including NBFCs registered with RBI||No Limit||No RBI permission required. Acceptance by Indian Companies subject to subject to applicable regulations. Companies cannot utilise funds for agricultural/plan- tation/real estate activities.|
|Type of Investment||Ceiling on Amount of Investment||Remarks|
|A. Portfolio Investment in Equity shares/preference shares through stock exchanges in India (other than Companies engaged in the print media sector).||Purchase o f shares by a single investor in any one Company not to exceed 5% of its total paid-up equity and preference capital. The aggregate investments all NRIs/OCBs/PIOs thro the secondary market in a Company, including shares of the Company acquired with repatri ation benefits under any other scheme, should not exceed 10% of the total paid up equity capital. Indian listed Companies can allow NRIs/OCBs to invest up to 24% instead of 10% by passing a special resolution.||NRI/OCB has to apply thro’ designated branch of Bank and all such trans- actions are to be routed thro’ this account only. Payment to be made either thro’ inward remittance or thro funds held in NRE/FCNR account. OCBs are required to inform the designated branch of the Bank, immediately when the holding interest of NRIs in the OCB falls less than 60%.|
|B. Portfolio Investment in convertible debentures thru stock exchanges (other than Companies engaged in the print media sector).||Purchase of CDs by any single NRI/OCB in any one Company not to exceed 5% of its total paid -up value of the CDs issued in that particular series by that Company. The aggregate investments all NRIs/OCBs thro the secondary market in a Company, including CDs of the Company acquired with/without repatriation benefits should not exceed 10% of the total paid up value of each series of CDs issued by the Company. Indian listed Companies can allow NRIs/OCBs to invest up to 24% instead of 10% by passing a special resolution.||NRI/OCB has to apply thro’ designated branch of Bank and all such trans- actions are to be routed thro’ this account only. Payment to be made either thro’ inward remittance or thro funds held in NRE/FCNR account. OCBs are required to inform the designated branch of the Bank, immediately when the holding interest of NRIs in the OCB falls less than 60%.|
|C. Investment in partner- ship/proprietary concerns engaged in any industrial, commercial, or trading activity other than agricul- tural/plantation/real estate Business||No Limit||OCBs are not allowed to invest under this Scheme. No RBI permission required. Concerned partnership/proprietorship concerns to obtain a non-repatriation undertaking from the NRI investors.|
|D. Investment in new issue of non-convertible debentures of Indian Companies NOT BEING CHIT FUND/NIDHI OR AGRICULTURAL/ PLANTATION COMPANY OR REAL ESTATE OR CON- STRUCTION OF FARM HOUSES AND COMPANIES IN PRINT MEDIA SECTOR||Ceilings have been prescribed by RBI for foreign direct investment in certain sectors.||Indian Companies not to engage in agricultural/plantation/real estate business or trading in TDRs or to act as Chit Fund or Nidhi Company. Funds for investment to be received from outside or transferred from NRE/FCNR account of the investor.|
|E. Investment in Units of Domestic Mutual Funds, dated Govt. Securities (other than bearer certificates) and Treasury Bills||No Limit||Payment to be made either thro’ inward remittance or thro funds held in NRE/FCNR/ account of the investor|
|F. Investment in 100% Export Oriened Units and Units in Export Processing Zones||Investment ceilings as per sectoral cap to be adhered to. Restriction of 24% relating to SSI Units not applicable for 100% EOUs/ EPZ Units||Approval of SIA/Development Commissioner required if automatic approval of RBI is not available|
|G. In savings/fixed and other deposits with Banks in India under NR(E) and FCNR(B) Schemes||No Limit||Normal formalities to be completed. FCNR(B) accounts can be opened only in designated currencies.|
|H. Deposits with Indian companies including NBFCs registered with RBI.||No Limit. However, aggregate amount of deposits accepted by the Company should not exceed 35% of the net owned funds of the Company.||OCBs not allowed to keep deposits. NBFCs to be registered with RBI.|
|I. Immovable property other than agricultural land/ plantation/farm house||No ceiling||Repatriation of sale proceeds by a person who acquired the property when he was a resident required RBI permission.|
|J. Investment in bond s issued by Public Sector Undertakings||No Limit||NRIs/OCBs to remit funds thro inward remittances or thro Nre/FCNR accounts.|
|K. Participation in equity capital of Pubic Sector Enterprises disinvested by the Central Government||No Limit||Purchase Consideration / bid money to be received from aborad by way of inward remittance or out of funds held in NRE/FCNR accounts|
Indian Investment Centre, Government of India. http://iic.nic.in/
Indian Ministry ofFinance http://finmin.nic.in
Securities and Exchange Board of In dia http://www.sebi.gov.in
Department of Industrial Policy & Promotion http://dipp.nic.in/
Reserve Bank of India http://www.rbi.org.in
Sundaram Finance Group http://www.sundaramfinance.com
http://nri.indiainfo.com/faq/investmentindia.html*QUICK REFERENCE GUIDE Z
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