Direct Investment in some of the aforesaid areas (not all) is
subject some conditions, some of which are as follows:
Develop a minimum
land area of 10 hectares for serviced housing plots, and a
minimum built-up area of 50,000 sq m in case of construction
projects. The policy does not clearly define ‘built-up’, though
FSI (Floor Space Index)/FAR (Floor Area Ratio) could be used as
a basis for the same.
Fulfill the minimum
capitalization norm of $10 million for a wholly-owned subsidiary
and $5 million for JVs. The funds would have to be brought in
within six months of commencement of business (which needs to be
defined) of the subsidiary or JV.
Complete at least
50% of the integrated project within five years from the date of
obtaining all clearances.
Do not sell
undeveloped plots (with no infrastructural backup). Provide
infrastructure and obtain the completion certificate from the
concerned local body before disposal. This clause needs
amendment because certificates are sometimes not issued for
months on end, even years, an uncertainty which tends to raise
project cost, often beyond viability.
Do not repatriate
original investment before three years from completion of
minimum capitalization. Early exits require prior approval of
the Foreign Investment and Promotion Board.
Conform with all
applicable local and state laws, and abide by all regulations
Wednesday, October 31, 2007
Real Estate Investing in India
Posted by Vijaychandran Veerachandran at 8:16 AM