FDI policy in construction development sector
· Conditions of area restriction of floor area in construction development projects and minimum capitalization have been removed.
· Each phase of the construction development project would be considered as a separate project for the purposes of FDI policy.
· A foreign investor will be permitted to exit and repatriate foreign investment before the completion of project under automatic route, provided that a lock-in-period of three years, calculated with reference to each tranche of foreign investment has been completed.
· Further, transfer of stake from one non-resident to another non resident, without repatriation of investment will neither be subject to any lock-in period nor to any government approval.
· Nonetheless, exit is permitted at any time if project or trunk infrastructure is completed before the lock-in period.
· FDI is not permitted in an entity which is engaged or proposes to engage in real estate business.
· Condition of lock-in period will not apply to Hotels &Tourist Resorts, Hospitals, Special Economic Zones (SEZs), Educational Institutions, Old Age Homes and investment by NRIs
· 100% FDI under automatic route is permitted in completed projects for operation and management of townships, malls/ shopping complexes and business centres.
· Consequent to foreign investment, transfer of ownership and/or control of the investee company from residents to non-residents is also permitted. However, there would be a lock-in-period of three years, calculated with reference to each tranche of FDI, and transfer of immovable property or part thereof is not permitted during this period.
· "Transfer", in relation to FDI policy on the sector, includes,—
(a) the sale, exchange or relinquishment of the asset ; or
(b) the extinguishment of any rights therein ; or
(c) the compulsory acquisition thereof under any law ; or
(d) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882) ; or
(e) any transaction, by acquiring shares in a company or by way of any agreement or any arrangement or in any other manner whatsoever, which has the effect of transferring, or enabling the enjoyment of, any immovable property.