Company Secretary and Law: Conditions relaxed for FDI in education sector and...

Company Secretary and Law: Conditions relaxed for FDI in education sector and...: Foreign Direct Investment in Townships, Housing and Built-up Infrastructure and construction-development projects is allowed upto 100% in au...

Conditions relaxed for FDI in education sector and old age homes

Foreign Direct Investment in Townships, Housing and Built-up Infrastructure and construction-development projects is allowed upto 100% in automatic route subject to conditions.

Built-up infrastructure and construction-development projects which would include, but not be restricted to, housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure)

The main conditions are as follows:

1.    For Development of Serviced Housing Plots, there should be a minimum land area of 10 Hectares. For construction Development Projects, a minimum built-up area of 50,000 Sq. Mtrs should be there. Where the proposed project is a combination of both, any one of the above conditions should be met.

2.    Minimum Capitalization of USD 10 Millions for wholly owned subsidiaries and USD 5 Millions for Joint Ventures with Indian Partners should be received within 6 months of the commencement of business of the Company.

3.    The FDI cannot be repatriated prior to expiry of 3 years from the completion of minimum capitalization as aforesaid. The entire amount brought in as FDI will be construed to be the original FDI and lock in period of 3 years will be reckoned from the date of receipt of each tranche of FDI or within 3 years of minimum capitalization whichever is earlier. Government of India may permit earlier repatriation.

4.    At least 50% of the project must be developed within 3 years from the date of obtaining all statutory clearances. There cant be any sale of undeveloped plots. The Investee company must provide all infrastructure and only after clearance from Local Body or Service Agency, sale of serviced housing plots can commence.

The above 4 conditions do not apply to FDI in Hotels and Tourism, Hospitals, Special Economic Zones, Education Sector, Old Age Homes and also for investment by Non-Resident Indians. This two items marked in red were not there in the previous FDI Circular of DIPP dated 31^st March 2011.