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CA Mayur Sojrani (CA) (318 Points)

04 January 2011  

I had gone through the FEMA Act to get the solution of the under Case.

"Can a  company which is registered outside India &  having no business activities in India own a Immovable property in India" ?

But i didn't get the clear cut answer of my query.

Going through  FEMA act and the RBI site  it's only mention that.

 

Can an office of a foreign company purchase immovable property in India?

ANS.. A foreign company which has established a Branch Office or other place of business in India, in accordance with FERA / FEMA regulations, can  acquire any immovable property in India, which is necessary for or incidental to carrying on such activity. The payment for acquiring such a property should be made by way of foreign inward remittance through proper banking channel. A declaration in form IPI should be filed with Reserve Bank within ninety days from the date of acquiring the property. Such a property can also be mortgaged with an Authorised Dealer as a security for other borrowings. On winding up of the business, the sale proceeds of such property can be repatriated only with the prior approval of Reserve Bank. Further, acquisition of immovable property by entities who had set up Branch Offices in India and incorporated in Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan would require prior approval of Reserve Bank to acquire such immovable property. However, if the foreign company has  established a Liaison Office, it can not acquire immovable property . In such cases, Liaison Offices, can take property by way of lease not exceeding 5 years.

 

WHAT ABOUT IF A FORIEGN COMAPNY HAVING NO BUSINESS IN INDIA

CAN HE OWN A IMMOVABLE PROPERTY IN INDIA ? 


 6 Replies

Aman Jain (Company Secretary in Practice)   (165 Points)
Replied 04 January 2011

Dear Mayur,

According to FEMA It should be a purpose of a foreign entity to acquire immovable property in India.

plz tell for what purpose Foreign company want to acquire immovable property in India?

 

--
 

with warm regards,

Aman Kumar Jain
LL.B., M.Com, ACS

AMAN JAIN & ASSOCIATES,
COMPANY SECRETARIES
B-15, SECOND FLOOR,
LAJPAT NAGAR-I,
NEW DELHI-110024
Mob. No. +91.97174.900.58
                 +91.93137.82.760


 

CA Mayur Sojrani (CA) (318 Points)
Replied 04 January 2011

Dear Aman Sir

the company wants to purchase the flat for their director which is an NRI

Aman Jain (Company Secretary in Practice)   (165 Points)
Replied 04 January 2011

Dear Mayur,

 

According to me without any business intention a Foreign Company can’t buy an immovable property.

 

But there is a question arises when there is no business foreign company have and no intention to start the business in India then why company want to purchase a house for his director??

 

--
 

with warm regards,

Aman Kumar Jain
LL.B., M.Com, ACS

AMAN JAIN & ASSOCIATES,
COMPANY SECRETARIES
B-15, SECOND FLOOR,
LAJPAT NAGAR-I,
NEW DELHI-110024
Mob. No. +91.97174.900.58
               +91.93137.82.760


 

CA Mayur Sojrani (CA) (318 Points)
Replied 04 January 2011

Dear aman sir,

actually the Director say Mr. A  is residing in india as a non resident india . he owe a company in US and he had purchase the residential flat in the company name .

 Now he want to sell that flat .

IS their any problem will arise for non compliance of procedure on purchase of flat

as assming it is not allowed for a foriegn company to purchase a flat in india.

 

Aman Jain (Company Secretary in Practice)   (165 Points)
Replied 04 January 2011

Dear Mayur,

 

Yes, According to me, he would be faced many problems.

--
 

with warm regards,

Aman Kumar Jain
LL.B., M.Com, ACS

AMAN JAIN & ASSOCIATES,
COMPANY SECRETARIES
B-15, SECOND FLOOR,
LAJPAT NAGAR-I,
NEW DELHI-110024
Mob. No. +91.97174.900.58
               +91.93137.82.760


 

CA Mayur Sojrani (CA) (318 Points)
Replied 04 January 2011

is their any penelty procceding.

 and what is the procedure if that company want's to sell that flat.

& wat it tax implication will be..?


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