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Who is a non-resident Indian (NRI)
An Indian Citizen who stays abroad for employment/ carrying on business or vacation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. ( persons posted in U.N. organisations and officials deputed abroad by Central/ State Government and Public Sector Undertakings on temporary assignments are also treated as non-resident) Non-resident foreign citizens of I
ndian Origin are treated on par with non-resident indian citizens.
To attract foreign investment in India, Government is offering several facilities to Non Resident Indians (NRIs), Persons of Indian Origin (PIO) and Overseas Corporate Bodies (OCBs). NRIs/PIOs/OCBs/ are permitted to open bank accounts in India out of funds remitted from abroad, foreign exchange brought in from abroad or out of funds legitimately due to them in India, with authorised dealer.
Reserve Bank has granted general permission to NRIs/PIOs, for undertaking direct investments in Indian companies, under the Automatic Route purchase of shares under Portfolio Investment Scheme, investment in companies and proprietorship/partnership concerns on non-repatriation basis and for remittances of current income. NRIs/PIOs do not have to seek specific permission for approved activities under these schemes.
Direct Investment Opportunities Available to NRIs/PIOs/OCBs
1. Automatic Route Of RBI With Repatriation Benefits :
NRIs/OCBs can invest in shares/convertible debentures of Indian companies under the Automatic Route without obtaining Government or RBI permission except for a few sectors where FIPB/SIA permission is necessary, or where the investment can be made only up to a certain percentage of paid up capital.
2. Investment With Government Approval :
Investments not eligible under the Automatic Route, are considered by the Foreign Investment Promotion Board(FIPB) a high Powered inter-ministerial body under the chairmanship of Secretary, Department of Industrial Policy & Promotion, SIA, subject to sectoral limits/norms. These investments also enjoy full repatriation benefits.
3. Other Investments With Repatriation Benefits :-
Investment in Domestic Mutual Funds
- Investment in Bonds Issued By Public Sector Undertakings
- Purchase of Shares Of Public Sector Enterprises (By NRIs/PIOs/OCBs)
- Deposits with Companies (For A Minimum Period Of Three Years)
- Investment in Government Securities/Shares
4. Investment Upto 100% Equity Without Repatriation Benefits :
| 1. Capital Contribution to any Proprietary or Partnership Concern |
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NRIs can invest by way of capital contribution in any proprietary or partnership concern in India provided the firm or the proprietary concern is not engaged in any agricultural/plantation activities or real estate business or Print Media on non-repatriation basis subject to the certain conditions. |
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| 2. New Issues of Shares/Debentures of Indians Companies |
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NRIs/OCBs as been ranted general permission to subscribe to the shares/convertible debentures of an Indian company on non-repatriation basis, and to an Indian company to issue shares or convertible debentures by way of new/rights/bonus issue to NRIs/OCBs on non-repatriation basis provided that the investee company is not engaged in agricultural/plantation activities or real estate business (excluding real estate development i.e. development of property or construction of houses) or chit fund or is not a Nidhi company. |
5. Other Investments by NRIs/OCBs Without Repatriation Benefits :
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Investment in Non Convertible Debentures
- Money Market Mutual Funds
- Deposits With Companies
- Commercial Papers (OCBs are presently not permitted)
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