m 2 ways of investment in Real Estate & Housing sector

m Direct Route

m RBI Approval Route or Alternate Route

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m d at does t is mean :
m No approvals required
m Indian company can well receive funds from t eir foreign
partner t roug proper banking c annels
m d o is allowed :
m Only NRIs (Non resident Indians) are allowed to invest upto
100% in t e real estate & ousing project
m Pls refer pg 6 of presentation for alternate means of investment
and fully legal
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m d at is t e definition of Real Estate & Housing Project under
legal parlance :
m Development of serviced plots and construction of built up residential
premises
m Investment in real estate covering construction of residential and
commercial premises incl business centres and offices
m Development of towns ips
m City & regional level urban infrastructure facilities, incl bot roads & bridges
m Investment in manufacture of building materials
m Investment in participatory Ventures in a & c above
m Invetsment in Housing Finance Institutions w ic is also opened to FDI
(Foreign Direct Investment) & NBFC (Non Banking Finance Co)
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m d at is t e definition of Real Estate & Housing Project under
legal parlance :
m Development of serviced plots and construction of built up residential
premises
m Investment in real estate covering construction of residential and
commercial premises incl business centres and offices
m Development of towns ips
m City & regional level urban infrastructure facilities, incl bot roads & bridges
m Investment in manufacture of building materials
m Investment in participatory Ventures in a & c above
m Investment in Housing Finance Institutions w ic is also opened to FDI
(Foreign Direct Investment) & NBFC (Non Banking Finance Co)
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^ under recent guidelines in 2006 (furt er to IEM Regulations
2005 dt 19-7-2005), 100% of FDI is allowed under Towns ips,
Housing, builtup infrastructure and construction development
projects. T e sector would include but not restricted to
ousing, commercial premises, otel, resorts. Hospitals,
educational institutions, recreational facilities, city and regional
level infrastructures SuBJECT to following guidelines :
^ Min area to be developed under eac project s all be as below :
^ Development of serviced ousing plots ² 5 Ha
^ Construction Development project ² 50000 sq Mtr
^ In case of combination, any one of t e above 2 conditions
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^ T e investment s all be subject to following conditions :
^ Min capitalisation of uSD 10 mil for w olly owned subsidiary and
uSD 5 mil for JV wit Indian Partners. T e funds would ave to be
broug t in wit in 6 mont s of commencement of business of t e
company
^ Original investment can not be repatriated before a period of 3 years
from completion of min capitalisation. However, investor may be
permitted to exit earlier wit prior approval of Govt t roug FIPB
(Foreign Investment promotion Board)


   
  

m To ave umble beginning in t e real estate & ousing sector; we
propose t e following proposal ²
m A Foreign investor can become a s are older in an Indian co specifically
formed for working in real estate sector
m Equity of foreign investor may be from 51% to 74%
m For becoming equity partner, single window clearance from RBI is reqd
w erein detailed project s all ave to be submitted wit basic details
(normal time consumed for approval is max 2 mont s)
m No min cap on t e investment from foreign investor (it s all be Project
specific)
m Funds transfer for purc asing equity t roug banking c annels
m Remittance to Foreign director under regular dividend remittance route
t roug RBI approval


   
  


‰ Benefits of our proposal :

‰ No min cap on investment : Even uSD 1 mil can be invested
‰ To experience Indian Real estate market
‰ Proper documentation of funds transferred t roug banking c annels
& complete accounting/accountability
‰ Various smaller size project opportunities may be tapped like
conversion of underdeveloped/developed industrial plots in NCR
(national capital region) into offices for IT/ITES or big export ouses


   
  

‰ Fall outs of our proposal :
‰ RBI approval for inward & outward remittances
‰ Project can be started only once funds are received
‰ Real Estate business is ig return & ig risk and prone to various economic
factors
‰ Our plans to overcome fall outs :
‰ Lawyer & C artered accountant to be ired specifically for t e RBI approval &
documentation
‰ RBI approval to be applied well in advance wit basic project reports & even
t e prior investment may done by Indian co. after scenario analysis
‰ Investment in Housing sector may be avoided upto Oct,07 as little slowdown
w ereas industrial & commercial sector may be tapped for regular better
returns
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‰ NRI permitted to freely invest in real estate
‰ RBI approval reqd. for smaller investments by foreign investors
but in normal conditions it may be t roug
‰ Inward & outward remittance of funds may be t roug proper
banking c annels
‰ Indian real-estate sector is all set to grow drastically in next 10-
15 years & you may partner us in benefitting alongwit t e
growt