Restriction on acquisition or transfer of immovable property outside India - FEMA Ready Reckoner - FEMA

Restriction on acquisition or transfer of immovable property outside India Restriction on acquisition or transfer of immovable property outside India imposed by rule 21 of Foreign Exchange Management (Overseas Investment) Rules, 2022 (1) Save as otherwise provided in the Act or this rule, No person resident in India shall acquire or transfer any immovable property situated outside India without general or special permission of the Reserve Bank Except:- If property held or acquired by a person resident in India held by a person resident in India who is a national of a foreign State ; acquired by a person resident in India on or before the 8th day of July, 1947 and continued to be held by such person with the permission of the Reserve Bank ; acquired by a person resident in India on a lease not exceeding five years. (2) Exception of Restriction on acquisition or transfer of immovable property outside India as per rule 21(1) of Foreign Exchange Management (Overseas Investment) Rules, 2022 Restriction on acquisition or transfer of immovable property outside India contained in rule 21(1) does not apply in the following property held by following person:- (i) A person resident in India may acquire immovable property outside India by way of inheritance or gift or purchase from a person resident in India who has acquired such property as per the foreign exchange provisions in force at the time of such acquisition; (ii) A person resident in India (PRII) may acquire immovable property outside India from a person resident outside India (PROI) (a) by way of inheritance; (b) by way of purchase out of foreign exchange held in RFC account; (c) by way of purchase out of the remittances sent under the Liberalised Remittance Scheme instituted by the Reserve Bank: such remittances under the Liberalised Remittance Scheme may be consolidated in respect of relatives if such relatives, being persons resident in India, comply with the terms and conditions of the Scheme; (d) jointly with a relative who is a person resident outside India; (e) out of the income or sale proceeds of the assets, other than ODI, acquired overseas under the provisions of the Act; (iii) an Indian entity having an overseas office may acquire immovable property outside India for the business and residential purposes of its staff, as per the directions issued by the Reserve Bank from time to time; (iv) a person resident in India (PRII) who has acquired any immovable property outside India in accordance with the foreign exchange provisions in force at the time of such acquisition may (a) transfer such property by way of gift to a person resident in India who is eligible to acquire such property under these rules or by way of sale ; (b) create a charge on such property in accordance with the Act or the rules or regulations made thereunder or directions issued by the Reserve Bank from time to time. (3) The holding or transfer of any investment in immovable property in any manner shall not be permitted if the initial investment in immovable property was not permitted under the Act. Acquisition or Transfer of Immovable Property outside India [ Para 25 of FED Master Direction No. 15/2024-25 dated 24.07.2024 ] Any acquisition or transfer of immovable property outside India shall be governed by the provisions contained in rule 21 of OI Rules. The following is further provided: (1) An AD bank may allow an Indian entity having an overseas office to acquire immovable property outside India for the business and residential purposes of its staff, provided total remittances do not exceed the following limits as laid down for initial and recurring expenses, respectively: 15 per cent of the average annual sales/income or turnover of the Indian entity during the last two financial years or up to 25 per cent of the net worth, whichever is higher; 10 per cent of the average annual sales/income or turnover during the last two financial years.