Foreign Entities Acquiring Real Estate In India

Every non-Indian entity (foreign entity) setting up operations inevitably becomes involved in the acquisition of real estate whether by lease, license, or sale. While Japanese entrepreneurs have long been doing business in India, their interest in real estate varies from commercial to industrial land and across varied sectors.

This article analyzes the basic guidelines for the acquisition of real estate by foreign entities, under the following broad headings: a) Foreign direct investment (FDI) policy read with the Foreign Exchange Management Act, 1999; b) central (federal) laws, and c) state and local laws.

A foreign entity usually establishes its presence as a liaison office, branch office, a subsidiary under the Companies Act, 2013 or as a limited liability partnership, and is allowed to acquire real estate, except agricultural land, for its business purposes. In Japan there are no restrictions on foreign entities acquiring land but in India a foreign entity is