|Investment in new issues of Indian cos under 40% Scheme
NRIs/OCBs are permitted to subscribed to new issues of shares (both equity and preference) and convertible debentures of any new or existing company, with the right of repatriation of capital invest and income earned thereon subject to payment of applicable taxes, provided. The issue of equity/preference shares and convertible debentures of NRIs/ OCBs with repatriation facility does not exceed 51 percent of the face value of each new issue of the company concerned, and Indian companies engaged in the following activities are allowed by Reserve Bank of India to issue shares/debentures to NRIs with repatriation benefits to the extent of 40% of the new issue.
1. Industrial and manufacturing units.
2. Hotels with 3, 4, or 5 star categories.
3. Hospitals and diagnostic centres.
4. Shipping companies.
5. Development of computer software.
6. Oil exploration services.
Investment under this scheme, can be made for setting up new manufacturing projects or for expansion/diversification of their existing manufacturing activities.
The issuer company needs to take permission from the RBI but NRIs/OCBs who have been issued shares/convertible debentures would not need any specific approval.
Investment in Air Taxi Operations
NRIs/OCBs will be allowed to set up Indian companies with 100% equity participation for carrying on Air Taxi Operations in terms of the guidelines issued by the Director General of Civil Aviation for Air Taxi Operation. Applications for the purpose should be made to Reserve Bank (Central Office) in Form ISD. Repatriation of the investment and/or remittance of dividend will be permitted only after the expiry of five years of operations of the Air Taxi Scheme and only out of accumulated net foreign exchange earnings.
Money Market Mutual Funds (MMMFs)
NRIs/OCBs will be permitted to invest, on non-repatriation basis, in Money Market Mutual Funds (MMMFs) floated by commercial banks and public sector /private sector financial institutions, with authorisation from Reserve Bank of India/Securities and Exchange Board of India (SEBI). Application for the purpose should be made to the Reserve Bank in Form ISD (R) by the concerned bank/institution. The NRI/OCB investors do not need separate permission from Reserve Bank for the purpose.
NRIs/OCBs will be permitted to place funds in deposits with firms/companies in India on non-repatriation basis. In case of acceptance of deposits from NRIs/OCBs under the public deposit scheme, the application for permission should be made by the deposit accepting firm/company through an authorised dealer to the concerned office of Reserve Bank under whose jurisdiction the registered office of the firm/company is situate. No separate application from the non-resident depositor is necessary in such cases.
Investment in Housing and Real Estate Development
NRIs/OCBs will be permitted to invest up to 100% in the new issue of equity shares/convertible debentures of Indian companies engaged in the following areas:
1. Development of serviced plots and construction of built up residential premises
2. Real estate covering construction of residential and commercial premises including business centers and offices
3. Development of township
4. City and region level urban infrastructure facilities including roads and bridges
5. Manufacturing of building materials
6. Financing of housing development. Repatriation of original investment in this case will be permitted by Reserve Bank only after a lock in period of three years from the date of issue of the equity shares/convertible debentures.