Untitled Document

NRI/PIO INVESTMENT IN HOUSING

[GUIDELINES FOR THE SCHEME (in pdf)]

The Central Government has formulated a scheme to encourage Non-Resident Indian (NRI), Persons of Indian Origin(PIO) to invest in housing and urban development sector. The scheme has two components:

Participation of NRI/PIO in the equity of Indian Companies

Any existing or new company, both private and public limited, engaged or proposing to engage in

a)	development of serviced plots and construction of built up residential premises,
b)	real estate development covering construction of residential and commercial premises, including business centers and offices,
c)	development of townships,
d)	development of city and region level urban infrastructure facilities including roads and bridges,
e)	manufacturing of building materials and their application,
f)	investment in participatory ventures in (a) to (e) above,
g)	investment in housing finance institutions.

Shall be authorized to issue equity shares/ convertible debentures to Non-Resident Indians holding Indian passports or foreign Persons of Indian Origin (PIO) upto 100% of the new issue with repatriation benefits.The repatriation of original investment will be allowed after a lock in period of three years from the date of issue of equity shares/ debentures with prior permission of the Reserve Bank of India.

Acquisition of Immovable Properties by the NRI/PIO

NRIs/ PIOs shall be allowed to repatriate an original investment in equivalent foreign exchange in residential properties upto a maximum of two houses,

NRIs /PIOs can acquire by way of purchase or inheritance and transfer or dispose of by sale, commercial immovable properties situated in India. Repatriation of original investment in equivalent foreign exchange will be allowed by the Reserve Bank of India on receipt of application.

NRIs/PIOs can acquire, transfer or dispose of residential properties upto two houses situated in India by way of a gift from or to a relative, whether resident in India or not. The rental income or proceeds of any such investment will be allowed to be repatriated in a phased manner over a period of 3 year as per the Circular No.18 of RBI Exchange Control Department dated 19.8.1994.

The total NRI/PIO investment in housing and urban development sector in the country has been around Rs.620,30,32,900. To attract foreign investment the Government has now decided to allow 100% foreign direct investment (FDI) for the development of integrated townships for which necessary guidelines/norm are under formulation. FDI in this sector would be permissible with the prior approval of the Government.