Past iadvisory Questions and Answers: Purchasing Land in India

Find out some general guidelines when purchasing land for business purposes in India.

My company wishes to purchase land for our business in India. Are we allowed to do so? How do we go about it? What are some rules and regulations we would need to take note of?

Some general guidelines regarding acquisition of immovable property in India,

1. If a foreign company establishes a branch/office in India, the real estate can be acquired for the business purposes subject to certain conditions by the RBI (Reserve Bank of India)

2. If a foreign national person stays in India and becomes a resident, as per requirements of law, he/she can purchase immovable residential/business property subject to RBI conditions. Nationals of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan would require prior approval of Reserve Bank.

3. A foreign company which has established a Branch Office or other place of business in India, in accordance with FERA (Foreign Exchange Regulation Act) or FEMA (Foreign Exchange Management Act) regulations, can acquire any immovable property in India, which is necessary for or incidental to carrying on such activity.

The payment for acquiring such a property should be made by way of foreign inward remittance through a proper banking channel. A declaration in form ‘IPI 5’ should be filed with the Reserve Bank within ninety days from the date of acquiring the property. Such a property can also be mortgaged with an Authorised Dealer as a security for other borrowings.

On winding up of the business, the sale proceeds of such property can be repatriated only with the prior approval of Reserve Bank. However, if the foreign company has established a Liaison Office, it cannot acquire an immovable property.


All answers are provided to the best knowledge of the iadvisors at the point of answering, and are solely represented by the iadvisors, not IE Singapore.

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