ACQUIRING IMMOVEABLE PROPERTY ABROAD 

 

You are a Resident Indian and looking at investing in Real Estate abroad?  Want to have your own villa in the exquisite surroundings in Zurich?  What does FEMA have to say on investment in immoveable property outside India?

 

Read on….. 

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• As a resident individual, you can acquire immoveable property outside India out of the amount permitted under the Liberalized Remittance Scheme (LRS) which currently stands at US$ 250,000 per annum.

 

• If you are a Returning Indian and have a Returning Foreign Currency Account (RFC), you can use the balance to buy yourself a property.  No questions asked! 

 

• If you don’t have one, you can still be a co-owner with a relative who is non- resident and purchase a property provided there is no outflow of funds from India. A relative means husband, wife, brother, sister or any lineal ascendant or descendent of the investor.  So, if your spouse is a non- resident and wiling to fully fund the property, you can be a co-owner. 

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• If you have sold any asset outside India, other than ODI which were acquired as per the provisions of FEMA, you can buy an immoveable property out of such sale proceeds.  

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• You may receive a property by way of gift or inheritance from a resident of India who acquired the property as per FEMA provisions, or acquired when he was a Non-resident or inherited from a resident.  So, let’s say your father was employed in the UK for about 20 years and acquired a small villa in London during his stay but is spending his retired life in India, you can inherit that property without having to take any permission. 

 

• You may continue to hold a property that you acquired when you were a Non Resident

 

• If you are a resident of India but a national of a foreign State, you may continue to hold the property

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• If you have a company which has branches overseas, the company can purchase immoveable property for business purposes of the branch or residential purposes of your staff as per RBI directions from time to time. 

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• Please note that any acquisition other than by the above means cannot be done without the general or special permission of the Reserve Bank of India. 

 

[Source: Foreign Exchange Management (Overseas Investment) Rules, 2022 of 22 Aug 2022– Contents updated till 27 Aug 2022]