FEMA - FDI in Real Estate

Is your company public or private, listed or unlisted?

Dear Friends,

My Co. is a Pvt. Ltd. Co.

Originally posted by : Ashish
	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

 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

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