Foreigners can’t directly buy real estate in India. With that said, you still have options. The CapitaLand India Trust, listed in Singapore, owns buildings in Pune, Bangalore, and elsewhere.
Starting a Business in India
Because of recent reforms and initiatives introduced by the government to bring offshore capital into the country, it’s now possible to start a business in India as a foreigner.
Here’s an overview of the process and requirements for foreigners to establish a business in India:
- Legal Structure: Foreigners can choose from various legal structures to set up a business in India, such as a private limited company, limited liability partnership (LLP), branch office, liaison office, or project office. The choice of structure depends on factors like the nature of the business, investment size, and long-term objectives.
- Foreign Direct Investment (FDI) Policy: Foreign investment in India is regulated by the FDI policy issued by the Department for Promotion of Industry and Internal Trade (DPIIT) and the RBI. The FDI policy specifies the sectors where foreign investment is permitted, the applicable sectoral caps, and any conditions or approvals required.
- Company Registration: The process of registering a company in India involves several steps, notably, drafting the Memorandum and Articles of Association, then filing it and all other incorporation documents with the Registrar of Companies.
- Compliance and Approvals: Foreign companies must comply with various statutory and regulatory requirements, such as tax registration and complying with labor laws.
- Sector-Specific Approvals: In certain sectors, such as defense, telecom, etc., additional approvals or licenses may be needed from regulators or government authorities.
As you can see, while it is possible to establish a business in India as a foreigner, it’s not exactly straightforward.
For what it’s worth, the Indian government has taken steps to simplify the process and improve the ease of doing business. You’ll certainly encounter heavy bureaucracy which poses a serious challenges to any foreign investor.
Whichever route you pick, it’s suggested that you seek help from lawyers, consultants, or specialized agencies familiar with Indian business regulations and practices to navigate the process efficiently.
Don’t make the mistake of going at it alone if you aren’t already living here and familiar with doing business in India.
Is Investing in India Worth It?
Considering the fact that India is expected to surpass China and the US as the world’s largest economy by the year 2050, it’s no wonder that foreign investors are turning their sights on India as their next investment opportunity.
Despite the complexities, limits, and strong home-country bias, investing in India as a foreigner is indeed possible.
You’ll find that ETFs and REITs in India provide the simplest routes to participating in the economy as a non-citizen. Those who are willing to traverse the bureaucratic red tape can even start their own business here.
Plenty of challenges remain, although India’s rapidly growing population and sheer size present a one-of-a-kind opportunity.
And if you choose one of the easier methods, such as ETFs and REITs, you’ll even find that investing in India is straightforward.