Ashish (Service) (41 Points)
12 November 2008
Dear Friends, Can Share application money which has came into the Company as FDI be invested in liquid money market? Can Company earn income out of such share application money? This is for real estate Company. Pls. comment asap. Thanks, Ashish
S.Srinivasaraghavan
(Chief Financial Officer and Co)
(11318 Points)
Replied 12 November 2008
Is your company public or private, listed or unlisted?
Ashis Mahapatra
(Consultant-Tax & FEMA/FDI)
(183 Points)
Replied 04 February 2010
| Originally posted by : Ashish | ||
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Dear Friends, Can Share application money which has came into the Company as FDI be invested in liquid money market? Can Company earn income out of such share application money? This is for real estate Company. Pls. comment asap. Thanks, Ashish |
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Ashis !!
FDI in Real Estate business is strictly prohibited
Just check it wheather is it involved in Real Estate or Devlopment of projects as mentioned below
For Development projects, includinghousing,commercialpremises, resorts,educationalinstitutions,recreationalfacilities, cityand regionallevel infrastructure,townships FDI is allowed subject to some SPECIFIC CONDITIONS prescribed in Press Note 2 (2005 series).
This Pressnote is attached herewith for your reference
So if you already brought and not fullfilling abovecondition,then there is no way out for this except you should apply for compounding (an excuse door ) given by RBI.In compounding RBI fine less if it found that its an unintentional mistake.My suggestion is the sooner you apply for compounding is better.Because Compounding will avilable if party suo-moto confess that he made a mistake.Otherwise may land you in more trouble since its a PROHIBITED Sector other than a APPROVAl
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17848 Points)
Replied 04 February 2010
FDI is prohibited in Real Estate business or construction of farm house.
However, real estate business” does not include development of townships, construction of residential / commercial premises, roads or bridges educational institutions, recreational facilities, city and regional level infrastructure, townships. It is further clarified that partnership firms /proprietorship concerns having investments as per FEMA regulations are not allowed to engage in print Media sector.
Please go through RBI master ciruclar dated 01/07/2009
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