FEMA

Acquisition of Immovable Property in India and outside India as per FEMA Guidelines by Foreigners/NRI and PIO

Acquisition of Immovable Property in India as per FEMA guidelines^[1] is related to individuals who invest in immovable property in India from abroad. As per specific guidelines provided by FEMA and RBI, a resident Indian can also acquire property abroad. However, the individual needs to comply with the rules under FEMA.

Non-Resident Indians can open bank accounts in India. Therefore, they can also acquire immovable property in India. However, such acquisition of immovable property in India depends on being compliant with the provisions of RBI and FEMA. When the acquisition of property occurs, the payment has to be made in currencies accepted within India. The funds to acquire immovable property in India should be transferred through the NRE/ FCNR account.

A foreign national cannot acquire immovable property within India. However, if foreign nationals residing in India for a particular period, then they can purchase immovable property within India.

Purpose of Acquisition of Immovable Property within India and outside India as per FEMA Guidelines

Before investing in a property, the residential status of the individual has to be taken into consideration. If an NRI or PIO (Persons of Indian Origin) wants to buy property in India, then the transaction in the property is allowed. Resident Indians are also entitled to purchase property abroad. However, this must comply with the laws related to FEMA.

Investment Opportunity– Acquisition of immovable property in India is considered as a valuable investment opportunity. The property which is purchased by an NRI/PIO should be done through a proper channel. Funds which are used for this purpose will be from the bank accounts, NRE and FCNR Accounts.

Who Regulates Acquisition of Immovable Property in India

The Reserve Bank of India and the FEMA is the regulatory authority and law dealing with the acquisition of immovable property in India made by an NRI and PIO. FEMA also governs the acquisition of immovable property outside India.

Eligibility Criteria

For Acquisition of Immovable Property in India under FEMA Guidelines, the following have to be followed:

• NRI
• Persons of Indian Origin (PIO) that is an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who:

1) Holds an Indian Passport

2) Father / Grandparents was a citizen of India by virtue of the Citizenship Act 1955

• A foreigner living in India can buy property in India, as long there is compliance with the RBI.

Eligibility Criteria for Acquiring Immovable Property Outside India

Process of Acquisition of Immovable Property in India and outside India

For an NRI/PIO to Acquire Immovable Property in India, the following considerations have to be taken:

• An Indian citizen resident outside India or a PIO does not require any special permission to buy immovable property in India.
• The buyer is required to pay in rupees through funds received in India through normal banking channels, or funds maintained in any non-resident account under FEMA and RBI regulations.
• There are also no restrictions on the number of immovable properties an NRI or a PIO may purchase for either residential or commercial purposes.

For a Foreign Nationals to Acquire Immovable Property in India, the following considerations have to be taken:

• A foreign national resident outside India cannot buy immovable property in India.
• Acquisition of immovable property in India can be done by a foreign national if specific requirements are satisfied in compliance with RBI and FEMA.
• To be considered a resident of India under FEMA, a foreign national would have to satisfy certain conditions regarding residence status. The conditions are as follows:

1. The individual must be residing in India for more than 182 days during the preceding financial year;
2. The individuals continued presence in India in the current financial year must be to take up employment, carry on business or vocation in India or for any other purpose that would indicate your intention to stay in India for an uncertain period.

Requirements for Acquisition of Immovable Property outside India

Documents required for Acquisition of Immovable Property in India and outside India

For purchase of property by an NRI in India

• Pan card (Permanent account number) if any
• OCI/PIO card (Overseas Citizenship of India/ Persons of Indian Origin)
• Passport
• Passport size photographs
• Address proof
• Registered power of attorney (if you are not physically present at the registered office)

For purchase of property by outside India

Documents for purchasing property can vary from country to country. However, the following documents will apply to most property transactions.

• Details of the Resident Foreign Currency Account
• An application under the LRS Scheme (RBI Compliance)
• Copy of the remittance for purchase of property
• Passport
• Title Documents
• Mortgage Deed

How can Enterslice Help 

• Regulatory advice on the acquisition and disposal of immovable property acquired outside.
• FEMA Compliance related to the acquisition and disposal of property.
• Procedure for Acquisition of Immovable Property in India.
• Acquisition of Foreign property by an Indian resident.