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In general: Investments in partnership and proprietary concerns in India by NRI / PIO don’t need permission from RBI (Reserve bank of India). But the concern, which likes to receive investments from NRI have to submit DIN form to the regional office of RBI within 90 days from receipt of such investments. The amount invested by NRI shall be remitted from abroad through normal Banking channels, or transfer of funds in NRI investor ’s account.
Amount invested and income results thereon are not eligible for repatriation and are payable in non-convertible Indian rupees to be credited to his NRO A/C. But the concern or NRI does not engage in any agricultural or plantation activity or real estate business.
NRIs are permitted to make direct investment in partnership or proprietorship concerns in India and also by way of shares / debentures of Indian companies. They are also permitted to place funds in company deposits. NRIs and OCBs will be permitted to place funds in fixed deposits with public limited companies in India with full repatriation benefits for a period of three years. The total amount of permitted fixed deposits to be accepted will be stipulated by Reserve Bank in individual regarding.
Indian companies can also accept NRIs / PIO / OCBs deposits on repatriation basis subject to certain conditions. The Indian company through its bankers may make the application for permission to accept deposits from NRIs/PIO with repatriation rights to the concerned office of Reserve Bank of India, by giving details of the deposit scheme. It is not necessary for NRI depositors to seek separate permission from Reserve Bank in this regard. Reserve Bank will grant permission to the bank branch nominated by the company for accepting deposits. While granting permission, Reserve Bank will authorize the branch to allow remittance of interest and maturity proceeds of deposits or credit thereof to the depositor’s NRE/FCNR account.
NRI Investments without repatriation benefits:
An investment on a non-repatriation basis denotes that the capital amount cannot be repatriated. But when NRIs / OCBs / PIO making an application for repatriation, RBI permits repatriation for net dividends, income, interest earned after payment of tax on investments, deposits, and loans. The amount may be repatriated either in installment basis or a complete payment consisting of a single sum of money.
The following investments are without repatriation benefits -
1.The investments in partnership / proprietorship concerns.
2.Investments in new issues of shares or debentures of Indian companies.
3.Investments in public sector and private sector mutual funds.
General permission also been granted to proprietary concerns, firms, or companies to accept NRIs / PIO deposits on non-repatriation basis subject to certain conditions. The concerned institution is required to apply to the RBI. The NRIs / PIO / OCBs need not to apply individually.
NRI investments with repatriation benefits:
NRIs/OCBs are permitted to make investments in Indian firms companies with repatriation benefits for the capital invested and for the dividends or incomes earned shall be repatriated under the different schemes of 100%, 51%, and 24%.
Indian companies seeking investments from NRIs / OCBs / PIO under 100%, 51%, and 24% schemes shall issue equity shares to NRIs/OCBs without prior approval of RBI by certain filings made with RBI under satisfying certain conditions. If such investments to be made with repatriation benefits in partnership firm, then, it needs prior permission from RBI. For more detailed information regarding NRI investments, please check our NRI free knowledge base.
Amount invested and income results thereon are not eligible for repatriation and are payable in non-convertible Indian rupees to be credited to his NRO A/C. But the concern or NRI does not engage in any agricultural or plantation activity or real estate business.
NRIs are permitted to make direct investment in partnership or proprietorship concerns in India and also by way of shares / debentures of Indian companies. They are also permitted to place funds in company deposits. NRIs and OCBs will be permitted to place funds in fixed deposits with public limited companies in India with full repatriation benefits for a period of three years. The total amount of permitted fixed deposits to be accepted will be stipulated by Reserve Bank in individual regarding.
Indian companies can also accept NRIs / PIO / OCBs deposits on repatriation basis subject to certain conditions. The Indian company through its bankers may make the application for permission to accept deposits from NRIs/PIO with repatriation rights to the concerned office of Reserve Bank of India, by giving details of the deposit scheme. It is not necessary for NRI depositors to seek separate permission from Reserve Bank in this regard. Reserve Bank will grant permission to the bank branch nominated by the company for accepting deposits. While granting permission, Reserve Bank will authorize the branch to allow remittance of interest and maturity proceeds of deposits or credit thereof to the depositor’s NRE/FCNR account.
NRI Investments without repatriation benefits:
An investment on a non-repatriation basis denotes that the capital amount cannot be repatriated. But when NRIs / OCBs / PIO making an application for repatriation, RBI permits repatriation for net dividends, income, interest earned after payment of tax on investments, deposits, and loans. The amount may be repatriated either in installment basis or a complete payment consisting of a single sum of money.
The following investments are without repatriation benefits -
1.The investments in partnership / proprietorship concerns.
2.Investments in new issues of shares or debentures of Indian companies.
3.Investments in public sector and private sector mutual funds.
General permission also been granted to proprietary concerns, firms, or companies to accept NRIs / PIO deposits on non-repatriation basis subject to certain conditions. The concerned institution is required to apply to the RBI. The NRIs / PIO / OCBs need not to apply individually.
NRI investments with repatriation benefits:
NRIs/OCBs are permitted to make investments in Indian firms companies with repatriation benefits for the capital invested and for the dividends or incomes earned shall be repatriated under the different schemes of 100%, 51%, and 24%.
Indian companies seeking investments from NRIs / OCBs / PIO under 100%, 51%, and 24% schemes shall issue equity shares to NRIs/OCBs without prior approval of RBI by certain filings made with RBI under satisfying certain conditions. If such investments to be made with repatriation benefits in partnership firm, then, it needs prior permission from RBI. For more detailed information regarding NRI investments, please check our NRI free knowledge base.