Can you buy Immovable Property outside India?

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Can you buy Immovable Property outside India?

Transactions involving the acquisition and transfer of immovable properties outside India by persons resident in India are governed by Foreign Exchange Management (Overseas Investment) Regulations, 2022, and rules thereunder (“FEMA”).

As per FEMA, no person resident in India shall acquire or transfer any immovable property situated outside India without general or special permission of the Reserve Bank of India (RBI), except in the following cases

Exception 1: A person resident in India may acquire immovable property outside India in the following cases 

Property acquired from Acquisition Mode of buyer/acquirer
 From a person resident in India By way of inheritance or gift or purchase.

(provided the person selling the asset had acquired such property as per the foreign exchange provisions in force at the time of such acquisition)

From a person resident outside India Inheritance
Purchase out of forex held in RFC Account (Defined below) 
Purchase out of the remittances sent under the Liberalised Remittance Scheme (LRS) of the RBI (Remittances under the LRS may be consolidated in respect of relatives if such relatives, being persons resident in India, comply with the terms and conditions of the LRS scheme.)
Jointly with a Relative (Defined below) who is a person resident outside India.
Out of the income or sale proceeds of the assets, other than ODI, acquired overseas under the provisions of the FEMA


Exception 2: An Indian Entity (Defined below) having an overseas office may acquire immovable property outside India, for the business and residential purposes of its staff, provided total remittances do not exceed the following limits

Type of expenses Limit
Initial expenses
  • 15% of the average annual sales/income or turnover of the Indian entity during the last 2 financial years or
  • Up to 25% of the net worth

whichever is higher

Recurring expenses  10% of the average annual sales/income or turnover during the last 2 financial years


Exceptions: The above rules shall not apply to a property held/acquired by a person resident in India in the following cases

  • The person is a national of a foreign State.
  • Property acquired on or before 8th July 1947 and continued to be held by such person with the permission of the Reserve Bank.
  • Property on a lease not exceeding 5 years.


Resident Foreign Currency Account (RFC Account) means – a person resident in India may open, hold and maintain with an authorized dealer in India a Foreign Currency Account, to be known as a Resident Foreign Currency (RFC) Account, out of the foreign exchange

(a) Received as a pension or any other superannuation or other monetary benefits from his employer outside India; or

(b) Realized on the conversion of the foreign currency, foreign security, or any immovable property situated outside India if such currency, security or property was acquired, held or owned by such person when he was resident outside India or inherited from a person who was resident outside India.

(c) Received or acquired as a gift or inheritance from a person referred to in the above point (b)

(d) Acquired or received before the 8th July 1947 or any income arising or accruing thereon which is held outside India by any person in pursuance of general or special permission granted by the Reserve Bank, or acquired as gift or inheritance therefrom; or

(e) Received as the proceeds of life insurance policy claims/ maturity/ surrender values settled in foreign currency from an insurance company in India permitted to undertake life insurance business by the Insurance Regulatory and Development Authority.

Relative with reference to any person means anyone who is related to another if

  • They are members of a Hindu Undivided Family; or
  • They are husband and wife; or
  • One person is related to the other, such relations are – Father, Mother (including step-mother), Son (including stepson), Son’s wife, Daughter (including step-daughter), Father’s father, Father’s mother, Mother’s mother, Mother’s father, Son’s son, Son’s son’s wife, Son’s daughter, Son’s daughter’s husband, Daughter’s husband, Daughter’s son, Daughter’s son’s wife, Daughter’s daughter, Daughter’s daughter’s husband, Brother (including step-brother), Brother’s wife, Sister (including step-sister), Sister’s husband.

Indian Entity means

  • A company defined under the Companies Act, 2013 or
  • A body corporate incorporated by any law for the time being in force or
  • A Limited Liability Partnership formed under the Limited Liability Partnership Act, 2008 or
  • A partnership firm registered under the Indian Partnership Act, 1932.



Team FinancePost


Disclaimer: The above content is for general info purpose only and does not constitute professional advice. The author/ website will not be liable for any inaccurate / incomplete information and any reliance you place on the content is strictly at your risk.

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