Overseas investors in Indian real estate cannot sell their stakes before three years to another foreign investor, the Foreign Investment Promotion Board (FIPB), the body that clears such proposals, said.
Along with this, FIPB has ruled against a provision in FDI policy that excused foreign players from the rule in cases where fund transfer is from one non-resident to another. Until now, this three-year lock-in was applicable only on foreign investment in real estate and not on investors.
According to the FIPB, the stand taken by the department of industrial policy and promotion (Dipp), the nodal agency that formulates FDI rules in the country. Dipp’s view is that a foreign investor can send back funds if it divests its stake to another foreign investor as the actual investment in a project would remain intact and only its ownership would change.
“Though Press Note 2 of 2005 has an enabling clause to permit sale of investment between two non-residents before the end of lock in, it has not been allowed so far,” a senior official in the commerce and industry ministry said.
The issue came up in the last FIPB meeting, when the board took up private equity fund 2I Capital’s request to sell its investment in Delhi-based real estate firm Uppal Housing to Mauritius-based fund ICP Investments.
Along with this, FIPB has ruled against a provision in FDI policy that excused foreign players from the rule in cases where fund transfer is from one non-resident to another. Until now, this three-year lock-in was applicable only on foreign investment in real estate and not on investors.
According to the FIPB, the stand taken by the department of industrial policy and promotion (Dipp), the nodal agency that formulates FDI rules in the country. Dipp’s view is that a foreign investor can send back funds if it divests its stake to another foreign investor as the actual investment in a project would remain intact and only its ownership would change.
“Though Press Note 2 of 2005 has an enabling clause to permit sale of investment between two non-residents before the end of lock in, it has not been allowed so far,” a senior official in the commerce and industry ministry said.
The issue came up in the last FIPB meeting, when the board took up private equity fund 2I Capital’s request to sell its investment in Delhi-based real estate firm Uppal Housing to Mauritius-based fund ICP Investments.
1 comment:
Nice blog.... it is very informative ..............for more property and real estate information please visit our site Property Koncepts.com
Post a Comment