FDI Construction Development Projects Construction development Township Builtup

FDI – Construction Development Projects

Construction development: Township, Built-up infrastructure 100% FDI is allowed under the automatic route in the following: Construction-development projects (including but not restricted to) Housing, Commercial premises Resorts Educational institutions Recreational facilities City and regional level infrastructure, and Townships

Who can invest in India? • A non-resident entity • A citizen of Pakistan & Bangladesh or an entity incorporated there can invest only under the government route

Who can get investment? • An Indian Company • Partnership / Proprietorship Firm by NRI/PIO ▫ Repatriation Basis – Approval Route ▫ Non – Repatriation Basis - Automatic • Partnership/Proprietorship Firm by NR (Foreigner) ▫ Repatriation – Approval Route ▫ Non Repatriation Basis – Approval Route

Investment will be subject to following conditions: 1. Minimum area to be developed - In case of development of serviced housing plots, a minimum land area of 10 hectares In case of construction-development projects, a minimum built-up area of 50, 000 sq. mts In case of combination projects, any one of the above two conditions would suffice 2. Minimum capitalisation US$ 10 million for a wholly-owned subsidiary US$ 5 million for a JV with an Indian partner 3. Lock In period Original investment i. e. the entire amount brought in as FDI with a minimum three-year lock-in from the date of receipt of each FDI installment or from the date of completion of minimum capitalisation, whichever is later.

Investment will be subject to following conditions: 4. At least 50% of each projects must be developed within a period of five years from the date of obtaining all statutory clearances. 5. Investor / Investee will be responsible for the necessary approvals from all the Statutory / Government Bodies.

Exemptions to Conditions… • Investment by NRIs is not subject to the conditions (1 to 4) as are applicable in the case of construction development projects. • Investment in SEZs, hotels, hospitals, industrial parks (satisfying prescribed conditions), the education sector and old-age homes is also exempt from the conditions (1 to 4).

Instruments for receiving FDI Foreign investment is reckoned as FDI only if the investment is made in: • Equity shares • Fully and mandatorily convertible preference shares • Fully and mandatorily convertible debentures

Should you require any information and / or clarification, the undersigned will be glad to provide the same on hearing from your offices. Regards CA. Rajesh Gupta Address : 1 Link Road, Middle Basement, Jangpura Ext New Delhi - 110014