NRI investment route’s not tax-efficient now

Select overseas investors may get to invest in local stock markets by registering with foreign institutional investors (FIIs). The aim is to ensure a minimum issuance of participatory notes (PNs) in the Indian markets, an official privy to the development said.

“Let more foreign portfolio investors come in. But we want investors operating under various umbrellas to come in through the front door and not through subterfuge,” said a senior official. As against PNs, ‘sub-accounts’ have to be registered with Sebi by non-residents on whose behalf investments are made in India by an FII registered with Sebi.

Since Sebi is in no position to verify the antecedents of each of the PN investors, a sensible course would be to pin down the responsibility on FIIs, officials feel. Sebi’s FII regulations will need to be revised as the responsibility of FIIs relating to sub accounts is regarded as a grey area.

The existing norms of a broad based fund (which stipulates at least 20 investors with no investor holding more than 10%) are expected to continue even if changes are carried out. The government has received representations to make NRI investments easier as the current route is not tax efficient vis-à-vis foreign investment coming into India via setting up FII sub account vehicle in a tax efficient jurisdiction.

According to Punit Shah, partner, RSM & Co, "Permitting NRIs to invest through FII/sub-account route would be more tax efficient for the NRIs and will certainly enhance substantially the inflow of investments in India. Sebi should take a pragmatic view in the matter." Investment by NRIs has become more difficult after overseas corporate bodies or OCBs were banned after the last stock market scam.

However, letting 20 or more NRIs set up a sub-account on a discretionary basis — where the money will be managed by the FII and not the NRIs — has to be allowed, keeping in mind the present regulation that NRIs cannot hold more than 24% in a local company. Till now one of the reasons for not encouraging NRI sub-accounts was to ensure that this investment cap is not breached.

Source: economic.timesofindia.com

THE NR EYE: Punjab attracts NRIs in many ways

They may not yet have any telling impact on the elections, nor have they yet fully realised their potential to invest in their state, but it is visible now that non-resident Punjabis are more interested in home affairs than before.

Some may attribute it to the overall effect that India's growth story is having on all non-residents. Others, might point towards the likelihood of NRIs getting voting rights. And then there would be those who might credit the government efforts for this. But, certainly, the intrepid global Punjabi, known for his uncanny ability to reach green pastures, is now looking homeward. Recently, hot on the heals of the Pravasi Bharatiya Divas - 2007, the International Punjabi Chamber for Service Industry (IPCSI) brought NRIs on a single platform to introduce them to investment opportunities.

The conference identified the areas of development in the area of infrastructure including roads, highways, rail, airports, power generation, SEZs, retail, real estate, housing, aviation, hospitality, travel and tourism, healthcare, schools, colleges, media-entertainment and other sectors of the service industry in north India, especially in the states of Punjab, Haryana, Himachal Pradesh and the union territory of Chandigarh.

The event took place under the banner Parvasi Punjabi Divas, which is in its fourth edition. It addressed the cause titled 'Global Investors Conference for Infrastructure Development'. The event took place in the city on January 11, 2007 registering fair governmental participation from the northern states, real estate companies and NRI investors.

He has already set up a Special Cell for the welfare of NRIs in the Chief Minister Office and a separate department for the welfare of NRIs had also been set up under the supervision of a Financial Commissioner level officer.

NRIs cheated back home or involved in a dispute over NRI property or even marriage, are just a phone call or an e-mail away from relief. All they have to do is to contact the NRI cell of the Punjab Police. Lodging a complaint is a simple process. Recently, the Cell also started a NRI Radio helpline to handle grievances of Canada-based NRIs. Located in Chandigarh, the Cell works round the clock to register NRI grievances.

NRIs' relatives too can approach the Cell. Since its formation in February 2004, the Cell has handled 932 complaints, out of which 771 have been disposed off satisfactorily, 161 cases are still being looked into.

The state is also grappling with a spate in crime. The crime rate has increased by about 20 per cent in the state, according to top police sources. Murder cases, for example, increased to 852 in 2006 against 743 in 2005. Similarly, 386 cases of rape were registered last year as compared to 366 in 2005, while the kidnapping cases increased to 654 in 2006 from the previous year's figure of 514. There has been a hike in burglaries and thefts which rose up to 5,670 as compared to 4,853 in 2005. This would surely be an area of concern for NRIs.

And, they seem to have taken note of the role they think they could play in making their home state a safer as well as a more attractive place to put money in. That's probably why there was such great interest shown by NRIs in Punjab's state elections this time.
Earlier this month, a media report said: "It is raining NRIs in Punjab. With India clocking an impressive growth rate and making waves the world over, an estimated 50,000 NRIs are in the state to throw their weight behind the candidates."

Whether or not that enthusiastic response had any effect on the outcome, observers feel the community wants a stake in the prosperity wave and the easiest way to do it is to tap those who will rule the state for the next five years.

Township For NRIs

Noida-based Shourya Towers Private Ltd, a unit of the Nitishree Group, is coming up with Shourya NRI City, spread over 150 acres in Amritsar with an initial investment of Rs 500 crore. The project is targeted at Non-Resident Indians, and is likely to be completed in two years from the date of commencement.

The township, comprising of both residential and commercial complexes, is just 8 km from the Golden Temple. The project has been conceptualized by world-renowned architects, SAA, Singapore.

The residential area will have modern infrastructure with apartments, kothies and villas. There will be other facilities like a premium club, a ladies’ club, a splash pool, an indoor games arena, a banquet hall, schools, petrol pumps, barbeque, banks and ATMs, a super-specialty hospital, and provision for a helipad. The township will also have platinum villas in varied sizes.

There will be green belts that would possess features like mediterranean façade, manicured gardens etc. Plots would be available in different sizes like 175, 250, 400 and 500 square yards and would cost about Rs 4,475 per square yard.

The township would also have provision for a magnificent mall with a difference comprising of a large-sized atrium. An ethnic touch will be created to increase the footfall in the mall and the shoppers can also enjoy laser shows from Suntech and Singapore Island.

ICICI Bank scheme for NRIs

ICICI Bank has introduced a new product 'NRI SmartSave Deposits'? an unique fixed deposit scheme for Non Resident Indians(NRIs). A one of a kind service introduced by ICICI Bank comes with a host of benefits that are tailor made for the Indian diaspora settled abroad. To avail of this service, even if the customer has a fixed deposit account in any other bank, all that the customer has to do is to get in touch with ICICI Bank, who will ensure a flawless transfer of the account on maturity.

The customer may not be in India when the deposit matures or may not have the time to go to the bank when in India. ICICI Bank will collect the documents from the customer and send the documents to the concerned bank through a vendor on behalf of the customer and get the money transferred to ICICI Bank. The customer simply has to walk into ICICI branches for the product and his requests will be taken care of by the sales executives of ICICI Bank. ICICI Bank will transfer the money for the customer so that the customer can manage funds effectively through internet banking and relationship managers.

Speaking while introducing the product, Anup Bagchi, senior general manager said, 'The customer can look towards a seamless, reliable, trustworthy and speedy transfer of money through ICICI Bank. We at ICICI Bank are committed to making banking easy and convenient for NRIs around the world. We offer a wide range of world-class banking services that are tailored to meet the unique needs of the global Indian. With ICICI Bank's convenient Balance Transfer facility switching from traditional banking service is easy. The customer can easily and conveniently transfer his deposits with other banks to ICICI Bank by completing easy formalities with us and we will handle the rest. '

Source: //newstodaynet.com

NRIs fly in - even first class - for Punjab polls

Jalandhar, Feb 9 For a retired postmaster from Britain's Birmingham city, the temptation to be part of the Punjab assembly election was too big to resist despite the non-availability of seats on most flights coming to India.

So Bhagwan Dass Badhan decided to fly first class - even if it meant paying nearly four times extra. The president of the Indian Overseas Congress in Britain, he is not the only one eager to be part of Punjab's colourful electoral scene for the 117 assembly seats. The polls are to be held Feb 13.

Badhan told IANS here that a group of 55 NRIs from Britain had come together to support Congress candidates, mainly in the Doaba belt.
The Doaba belt comprising the districts of Jalandhar, Hoshiarpur, Kapurthala and Nawanshahr districts had seen maximum immigration to Western countries from Punjab, starting in the early 1940s.

'All flights coming to India from Britain are full. The position of flights to Amritsar airport is particularly bad. Since I did not get any ticket, I travelled first class to Delhi,' Badhan said.
This group of 55 NRIs, mostly businessmen from all over Britain, is not the only one actively campaigning in Punjab.

Jaswinder Singh Khangura, who gave up his British citizenship last year to contest elections here and is the Congress candidate from Kila Raipur seat near Ludhiana, has his own band of NRI supporters canvassing for him.

'The total number of NRIs from Britain and the US could be between 1,000 and 1,500. They are very excited about the Punjab election,' NRI Kewal Singh said in Banga town, 40 km from here.
Some of the NRIs have brought their wives and families along to give them a feel of the election in Punjab and also get them to campaign for candidates.

Having seen elections in their adopted countries, the NRIs feel more at home with the electoral scene here. 'NRIs definitely help in campaigning as people in villages listen to them. The village folk here think that NRIs have seen the world and can judge candidates better,' said Jasbir Singh, a supporter of a Congress candidate in Jalandhar.

The NRIs also help candidates with money - an investment they think they can reap if the candidate wins and comes to power.

Source: //earthtimes

Investing in Indian Real Estate

Non-residents Indians [NRIs] have recently begun to show immense interest in the real estate market of India. A lot of NRI funds are coming to India, through various channels, to be invested in the real estate industry, as these NRIs want make the most of the opportunities offered by the growing real estate market in India.

We cannot ignore the important aspect of India's government in promoting real estate. The Indian government has played a major role in supporting the growth of the real estate sector by allowing NRI investment and Foreign Direct Investment [FDI] in real estate. With an exceptionally good return on the investment, the real estate sector has become the preferred choice of most of the investors.

Various lucrative avenues are being created and offered to invite maximum investments from abroad. The NRI section has responded quite positively, showing keen interest in India's real estate market. NRIs are investing a lot in residential and commercial properties to cash upon the increasing property demands.

NRIs are also allowed to participate in real estate investments by way of huge investments in the construction of residential and commercial projects, development of townships at city and regional level, constructing infrastructure facilities like roads and bridges in urban areas and investment in participatory ventures. The status of an NRI as a property owner is not much different from the Resident Indian; just like any other property owner, NRIs pay property tax to the concerned authorities, though NRI property tax is slightly different from what Indian residents pay.

NRIs also get complete support from the financial institutions and banks for the finance required for the purpose of investment in properties in India. NRIs are eligible for availing a NRI home loan facility to purchase a property in India; in fact they are considered as quite a safe profile due to their good repayment capacity. As far as the process of the repayment of the home loan is considered, it can be made through a normal banking channel by way of inward remittance. It is also possible to repay by way of direct debit into the accounts of Non-residents (External) [NRE] or Non-resident Indians who earn an income in India through rent, dividends, pension, etc [NRO]. Online banking in India, and these special accounts for NRIs, have facilitated transactions for any kind of NRI investment in India.

It is a good sign that the NRI’s trust in the real estate market of India and consider their investments to be safe and rewarding. Any kind of NRI fund inflow to India generates a lot of interest in the country, which further helps to boost the market.

Sourec://india.seekingalpha.com

ICICI Bank freezes many NRI accounts

ICICI Bank has frozen the accounts of many non-resident Indians (NRIs) in the UAE after they failed to submit personal documents demanded by the Bank.

The Bank had asked for the documents after the 2005 Mumbai floods damaged documents originally given by the customers, including papers submitted for opening savings and current accounts, demat accounts for trading and investing, NRI home loans and auto loans, and ICICI Direct online trading accounts.

Apart from NRI customers, the damage has also affected several account holders in India.
While the bank had given its customers in India until December 25, 2006 for submiting the required documents, NRIs in the UAE were given a deadline of January 31, 2007.

"Several accounts of customers who have failed to meet the deadline have been deactivated," an official at the ICICI Representative Office in Dubai said.

The official, however, said that the accounts would be reopened after the documents were submitted.

"It will definitely affect our customers. At least that way we can expect them to quickly come and rectify the problem," he said.

Source: hindu.com