This is a question that comes to the fore when an NRI wants to buy commercial property in India, and this brings with it some other relevant questions, such as if NRIs can buy commercial property in India, they can What type of property can one buy? What procedures must be followed by an NRI to purchase a commercial property? Many more questions. In this article, we will answer some of the questions related to buying commercial property out of these keeping in mind the RBI guidelines.
NRI Buying Commercial Property in India
An NRI can buy commercial property in India. As per RBI guidelines, a non-resident can purchase specific types of properties in India. However, it is worth noting here that it is also possible to purchase other types of assets after obtaining special permission by RBI.
An NRI who purchases property in India should be fully aware of the legal provisions that a real estate owner owns within the country. As per the provisions of the Foreign Exchange Management Act, persons of Indian origin and non-resident Indians are considered one and the same when it comes to investing in real estate in India.
Properties That Non-Resident Indians Can Buy
The Reserve Bank of India generally allows NRIs / PIOs to purchase commercial property ie a valid Indian passport is held by the Reserve Bank of India for the purchase of residential or commercial properties in India. In that case, the investor does not need to obtain RBI special permission for this. The investor is also not required to inform the Reserve Bank about the purchase of India’s residential / commercial property.
An NRI can obtain permission to purchase any number of properties as per RBI rules and income tax laws. If an NRI investing in residential / commercial property in India does not reenter the country, and then the purchase can be made by giving a legally binding power of attorney to another person.
Properties That Non-Resident Indians Can’t Buy
However, there are certain types of properties that cannot be purchased by NRIs / PIOs. The general permission of the Reserve Bank of India does not allow NRIs to purchase agricultural land / plantations in India. This means that non-residents cannot invest in a farmhouse without obtaining special permission from the Reserve Bank of India, which is not guaranteed.
The Reserve Bank considers such applications only on a case by case basis, and then it is decided by the decision whether to allow NRIs to purchase such property.
Some Essential Points to be followed by an NRI to buy a property in India
The following points should be considered by NRIs:
- According to the RBI’s general authority, an NRI can purchase property either in person or in person with another NRI. The most effective way to buy property is to adopt a power of attorney.
- Appoint a power of attorney who will be your personal legal consultant and will also suggest you on all matters related to real estate and all other formalities as he is an expert in the field. This method has been employed by many in a cost-efficient and effective manner.
- Given that he is familiar with Indian laws and the real estate market, he will be able to help you with the best deals. It is also advisable to appoint a General Power of Attorney or a Special Power of Attorney which you believe to be reliable as it will be easier to communicate.
Entry Strategies for Investing & Setting up a Company in India
Foreign nationals entering Indian territory must have a valid passport / travel document and valid visa. Visas can be for tourism, entry, transit, conferences, trade and employment purposes in India, re-issued to Indian embassies and consulates abroad.
Business visas can be issued for a period of 5 years with multiple entry provisions. A business visa is issued by an Indian embassy abroad, and if the applicant wishes, it can be renewed / extended within India. A foreign national has a visa (other than a tourist visa) that is valid for a period of more than 180 days, and must be registered with the FRRO within 15 days of arrival in India. A bank guarantee must be provided.
Investors class coming from outside territory of India
The following are the classes of investors coming from outside the Indian territory or to invest on NRI property:
- Non-Resident India or Persons of Indian Origin or Overseas Citizen of India
- Foreign Companies
- Foreign venture Capital Companies
- Foreign institutional investors and foreign portfolio investors
Automatic Pathway of Foreign Investment in India
Automatic route means that it is the route under which foreign investment does not require pre-approval from the government. As such: neither from the government nor from RBI. However, investors are mandatory to inform the respective Regional Office of RBI within 3 days of receipt of incoming dispatch.
Conclusion
Thus, it is clear that NRI can buy commercial property in India, although the buyer should have information in the details of various legal requirements related to being a real estate owner, so that the buyers can easily buy real estate. Apart from this, if you are an NRI and often do not travel Indian, you can easily buy property for yourself in India by giving legally binding power to another person.