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FDI
(Foreign Direct Investment)
On
Special Invitation from 'NARAINS CORP'; Advocate Mrs. Shobha
Jagtiani has put together a comprehensive & exhaustive
article on Foreign Direct Investment (FDI) in India
On Special Invitation from
'NARAINS CORP'; Advocate J. G. Arora has put together an exhaustive
write-up on Foreign Direct Investment (FDI) in India
Click here for answers on frequently
asked questions on Foreign Direct Investment (FDI) in India
A
brief overview on FDI Rules & Regulations
Opportunities for FDI (Foreign Direct Investment) & NRI'S
(Non Resident Indians) in Indian Real Estate as on July 31,
2006
- Non-resident
Indian investments allowed under all categories.
- Direct FDI
allowed in residential townships of more than 25 acres and
in construction with
approval for projects offering built-up area of more than
50 thousand square meters.
- Direct and
automatic approval for IT park and hotel investments.
- Foreign and
domestic venture capital investment in real estate allowed
with prior approval.
- Within special
economic zones, akin to Foreign trade zones in the USA ,
developments,
free capital and dividends allowed with many specific tax
exemptions on profits (5 to 10 years), and local taxes.
- Foreign investors
are allowed to invest in Greenfield / Brownfield developments.
Regulatory Developments
- As per a
policy initiative of the Securities and Exchange Board of
India, Indian venture
capital firms are now allowed to invest in real estate companies
and projects.
- The Cabinet
Committee of Economic Affairs of India has allowed 100%
Foreign Direct Investment
(FDI) in the construction sector under the automatic route.
- Foreign investors
can now invest in commercial real estate developments projects
with a minimum built area of 50,000 sq. meters.
- The minimum
area threshold for Foreign Direct Investment in Integrated
Township projects
has now been reduced to 25 acres from 100 acres. A number
of projects that were previously
stalled for non availability of such contiguous land parcels
in major cities are now expected to come on line.
- Foreign investors
are still barred from acquiring and trading in undeveloped
land. This regulatory
restriction has been imposed primarily to stem the flow
of speculative capital that may negatively impact the stability
in land markets.
- The Securities
and Exchange Board of India has also recently approved the
guidelines for real estate mutual funds, allowing them to
invest directly in real estate properties in India.
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