The rules and regulations have been simplified to a great extent to help in the NRI investment. In the meantime, the economy is predicted to grow at a healthy rate. As a result, NRI and PIO are also showing a growing interest in investing in the Indian economy.

Want to invest/trade in INDIA?

Open a FREE “ALL-IN-1 Investment Account” : www.NriCapital.com

The major investment opportunities

Before you learn about the many different investment opportunities for the NRI in India, you should know that this investment can enter the economy via either of the two routes. One is the automatic route where you can directly invest in the company. The other is the government route where you will require prior government approval.

The various investment opportunities are as follows:

• For the NRI who is looking for high returns, attention should be concentrated on the huge number of central and state sponsored projects in key infrastructural sectors like education, healthcare and construction.
• In general NRI investment is made through three major sectors. These include bank accounts, investment in immovable properties and investment in securities and debts.
• There are many types of bank accounts. The regulations vary according to the repatriation of the interest income. These different types are NRE account, NRO account, NRNR account and FCNR account.
• Debts and securities provide the largest and most lucrative investment opportunities in India for the NRI. However, you should be aware that these are liable to market risks.
• The securities in which the NRI can invest through the automatic route include agriculture, mining, alcohol brewing, power, industrial explosives, hazardous chemicals, drugs and pharmaceuticals, transport, insurance, industrial parks, non banking financial institutions etc. You do not need the approval of the RBI to invest in these securities. In some cases, the approval of the Foreign Investment Promotion Board (FIPB) may be required. These include sectors like tea, infrastructural companies except telecom, publication of newspaper and periodicals, courier service and single brand product retailing.
• If you are looking for investment opportunities with repatriation benefits, you will have to invest in mutual funds, term deposits and bonds for at least three years.
• A NRI can invest in proprietary and partnership firms in India, but the income will not be repatriated outside the country.
• NRI can directly invest in real estate in India except if you are buying agricultural lands or plantations. Investments in housing schemes and commercial properties are free.
• There are certain prescribed sectors where foreign investments as well as the NRI investments are prohibited. These include retail, atomic energy, chit funds, nidhi companies, lottery and gambling establishments, tobacco products and other sectors which are not opened to private sector investment.

Points to remember regarding NRI investment in India

Now that you know the investment opportunities that are available to the NRI in India, you have to bear in mind certain technicalities regarding such investments:

• Foreign and NRI investment is regulated in accordance with the FDI policy, 2010 and FEMA, 1999.
• NRI as well as a person of foreign origin, except Pakistan can now invest in the many different prescribed sectors of Indian economy.
• The investment is made through equity shares, convertible preference shares and convertible debentures. All these have to be carried out in accordance to the FEMA (Foreign Exchange Management Act) guidelines.
• Repatriation issue varies in each sector and commodity. You have to understand the norms regarding the particular commodity that you choose.

There is a lot of confusion among international companies not registered or having no presence in India when it comes to with holding taxes. Our goal through this literature is to provide useful and resourceful information to all our readers. So what is withholding tax? Well it is nothing but a type of taxation imposed by the Indian govt on the payer where it is mandatory for him to hold tax and pay the same to the govt. This type of tax is quite common and essential while getting paid on invoices..

Why do you have to pay withholding tax in India?

Chapter XVII B of the Income tax Act provide for deduction of tax at source at the time of making payment by any assessee. It also covers all payments made to Non Resident. Section 195 deals with deduction of tax at source at the time of making any payment or at the time of crediting any sum to a Non Resident.

Section 195 of the Income Tax Act, 1961 provides “Any person responsible for paying to the Non Residents, not being a company, or to a foreign company, any Interest or any other sum chargeable under the provisions of this Act (not being Income chargeable under the head salaries) shall, at the time of credit of such Income to the account of the payee or the time of payment thereof in cash or in Cheque or in draft or in any other mode, whichever is earlier, shall deduct Income tax thereon at the rates in force.

There is no threshold limit defined in section 195, even Re. 1 is covered under section 195. All payers are covered irrespective of Legal Character i.e. Individual, HUF etc.

H’ble Supreme Court in the case of EILY LILY 312 ITR 225 views that:

The purpose of TDS provisions in Chapter XVII B is to see that the sum which is chargeable under Section 4 for levy and collection of income-tax, the payer should deduct tax thereon at the rates in force, if the amount is to be paid to a non-resident.

Get a PAN (PERMANENT ACCOUNT NUMBER) – if you want to reduce your withholding tax liability.

The amendment made applicable from 01^st April, 2010 requires every recipient of Income to Obtain Permanent Account Number.

PAN is a ten-digit alphanumeric number issued in the form of laminated card by the Income tax department of India.

As per section 206AA of Income tax act, if the recipient of Income fails to provide PAN, then rate of withholding tax shall be at higher of following rates:

1. Rate specified in relevant section depending upon nature of payment;
2. Rates in force (rate specified in ITA or in tax treaty);
3. Rate of 20%.

So it is advise for all to start applying for PAN, if you do not have one.

How to file with-holding taxes via INCOME TAX FILING?

Section 139 of Income tax Act, 1961 speaks about filing taxes in India. As per Section 139(1), every company is required to file taxes in India irrespective of level of Income.

 “A body corporate incorporated by or under the laws of country outside India” is also covered within definition of company as defined in Section 2(17) of the Income Tax act.

Section 139(1) comes attracted only when transaction entered into by the assessee is liable to taxes in India. This view is affirmed by Hon’ble AAR in the case of Vanenburg Group B.V., 289 ITR 464.

TAXABILITY OF BUSINESS INCOME

Any profit arising to foreign enterprise from Business in India will be taxed in India only if that foreign enterprise is having Permanent establishment (PE) in India. Only profits attributable to that PE will be taxed in India.

Permanent establishment means:

• A Place of Management;
• A branch;
• An office;
• A factory;
• A workshop;
• Or any other place of effective management.

Business of foreign enterprise should be carried through PE. Existence of PE in India is a must condition for tax-ability of business profits in India of a foreign enterprise.

A foreign enterprise and a PE in India will be considered as a separate entity and transactions between two must be carried on arm’s length price.

TAXABILITY OF FEES FOR TECHNICAL SERVICES AND ROYALTY

In general sense, Fees for Technical service is any consideration for rendering of technical, managerial services. Fees for technical services is defined in section 9(1)(vii) of Income tax Act.

Hon’ble Supreme Court in the case of Ishikawajima-Harima heavy Industries 288 ITR 408 held that in order to be chargeable to tax in the hands of the non-resident, fees for technical services had to be rendered in India as well as utilized in India.

Further above decision is overruled by Finance Act 2010 by adding an explanation to Section 9 which clearly explains that Fees for technical services of a Non Resident shall be deemed to accrue or arise in India and shall be included in total Income whether or not:

• the non-resident has a residence or place of business or business connection in India; or
• the non-resident has rendered services in India.

It is now clear from above explanation that Fees for technical services would attract withholding tax if services are utilized in India.

Royalty is generally a consideration received in respect of transfer of rights, rights to use property and imparting of any information. Royalty is broadly defined in section 9(1)(vi) of Income tax Act.

Taxability of payment made for softwares has always been a subject of litigation. The decisions in Indian courts for software payments have mainly focused their decision on treating this revenue as ‘Royalty’ or ‘Sales’ Income. Income which is characterized as ‘Royalty’ would obviously attract Withholding tax, whereas any Income characterized as

‘sales’ Income would not be subject to tax in absence of Permanent establishment in India.

It was held by Karnataka High court in the case of Samsung Electronics Co. Ltd that payment made for purchase of copy of a computer program for internal business use as well as for resale to end user is taxable as royalty and would attract withholding tax. Further Supreme court by reversing the order of high court, held that withholding provisions would apply only when payments are chargeable to tax in India.

With the Finance Bill 2012, the government would like to tax all payments made for software as ‘Royalty’ as they consider this payment toward ‘license to use’. This amendment is retrospectively made with effect from 01^st June, 1976 i.e. AY 1977-78.

Withholding TAX RATES

Withholding tax rate in connection with Income arising in India can be obtained by:

1. Determining the tax-ability of Income as per Indian tax laws;
2. If Income is taxable as per Income tax Act, then refer to tax treaty between India and Residence country.
3. Compare the rates as per Income tax Act and DTAA.
4. Apply the rate whichever is beneficial to assessee.

RECENT BUDGET HIGHLIGHTS

Section 9-  Major Amendment is proposed in this section which deals with “Income deemed to accrue or arise in India”. An explanation shall be inserted in sub section (1) and shall be restrospectively effective from 01^st April, 1962.

Explanation- For the removal of doubts, it is hereby clarified that an asset or a capital asset being any share or interest in a company or entity registered or incorporated outside India shall be deemed to be and shall always be deemed to have been situated in India, if the share of the interest derives, directly or indirectly, its value substantially from the assets located in India.”

Supreme Court decides in favor of Vodafone in January, 2012 and held that government has no jurisdiction over vodafone’s purchase as the transaction took place in Cayman Island.

However, the retrospective amendment in Section 9 have now overruled supreme court judgement in Vodafone case, which won Rs. 11000 crore tax dispute case against Indian tax authorities.

Section 115BBA- This section covers taxability of Non Resident sports person, sport association and institutions and they are presently taxed at 10% on their gross earning in India. Now, with the Finance Bill, 2012, this facility is extended to Non Resident entertainers, who earns from their performances in India. Tax rate is also extended from 10% to 20% and revised rate for deduction will be applicable from 01^st July, 2012.

Section 90- According to amendment proposed in Section 90 of Income tax act, if an NRI wish to avail DTAA rates for Financial Year 2012-13 will have to submit Tax residency certificate (TRC) to deductor. TRC is issued by the authorities of country in which NRI resides. Rules in this context are still pending with Indian tax authorities.

>> NRIs file tax here – FREE

The most important fact that you, as a NRI should know is that you are required to have a PAN card, even though you are a non resident Indian. Since the process of applying for a PAN card has been made so easy, you can apply for it online and obtain your PAN card.

There is several taxable income of a NRI as well as several exemptions. You need to understand all of them so that you can pay the correct amount of tax on time and avoid any penalty. If you find the information too complicated, you should take the help of an accountant to sort out your tax questions.

Laws and regulations relating to NRI taxation

If you are a NRI, you have to bear the following facts in mind as regards to the filing of your tax:

• You can be taxed only on that income which is earned in India. You do not have to pay tax on the income you earned abroad in India. However, the reverse may not be true and you should check the tax laws of your country of residence to verify it. For example, you do not have to pay tax on dividend income received from Indian companies, but you will have to pay tax on these in the USA.
• If your resident country has a Double Tax Avoidance Agreement with India, you will get tax concessions there. So, you should find out about these details.
• If your total income is less than the prescribed limit, you need not pay tax in India. However, there are a few exceptions to this clause.
• If your income is above the prescribed limit, you will have to pay tax on income from such sources as immovable assets in India, investments, capital gains and any other income obtained from India.
• However, even if your income is below the exemption limit, you still will have to pay tax in certain cases. For example, you will have to pay taxes on short term capital gains like equity shares. In case of long term capital gains, the tax is almost always deducted at source. If it is not so deducted, then you will have to pay tax on it.
• You will not have to pay tax on inheriting property in India, but you will have to pay tax on any income derived from it like rent.

The tax filing process:

The process of filing tax return of a NRI is as follows:

• Obtain your PAN number, either physically or online or with help of specialized brokerage firm.
• Then you will have to select the correct form for filing your return. The categories are :

o        ITR 1 for income from salary, interest, agricultural activities or pension.

o        ITR 2 for those not earning from profession or business.

o        ITR 3 for partners in a firm.

o        ITR 4 for those earning from proprietary profession or business.

• Fill up the form and deposit them using either of two methods:

o        You can deposit them online after obtaining your digital signature from designated authority.

o        You can physically file them. In that case, the form should be accompanied by the acknowledgement of an income tax officer.

• You have to sign the returns yourself or authorize a signatory for the purpose.

Get a Free Forex Course: Click To Learn More

The subject of forex trade has many misconceptions about it. It was previously thought to be the domain of corporate and financial institutions. But that is hardly a fact. Forex trading is as much an individual enterprise activity as with banks.

Forex trading is not complicated. Even though initially the numbers may look intimidating, the process of investing through foreign exchange trading is simple. So much so that forex trading is one of the simplest ways to make money.

Like any other investment in the markets, forex trading does come with risks. You have to master the basics even before thinking of advancing to more serious forex trading.

The basics of forex trading for beginners

A forex market is a place where trading of currencies takes place. Alternatively, a forex market is known as currency market. The forex market is a place where buying and selling of foreign exchange happens between many currencies. Such buying and selling is the infrastructure of international finance.

The main parties involved in forex trade are the banks. For instance, if India has to import raw materials from the U.S. it has to pay the U.S exporters in dollars. For this it has to convert the Rupee into Dollars.

This conversion is a perennial thing and happens at all times during the day. The U.S. dollar is pegged at four trillion dollars a day worth of transaction conversions.

Now if you are an individual trying to get into forex trade, you are simply an actor in the above-mentioned process of buying and selling currency to facilitate trade. You will not own a trillion of currency, but with whatever money you have, you buy currencies.

You buy through a pairing financial mechanism. In this process, when you purchase a particular currency (For e.g. the Canadian Dollar), it is exchanged with another currency (for e.g. the Japanese Yen). This is known as pairing.

So here you trade with pairs. You buy pairs and sell them. Just like you trade with shares on the stock market, here you trade with pairs. This is the fundamental difference.

Understanding the dissimilarities between forex trading and stock trading

If you are confused between stock trading and forex trading, the following information will help you get more perspective.

• The stock market is a place that has a huge list of companies and their stocks. But with the forex market, you are only concerned with leading currencies. You do not trade with currencies that are not used extensively in the world. This means that you trade in currencies of economically strong countries.
• The stock market does not operate throughout the day. It is active only for a couple of hours during the day. A forex market is active throughout the day.
• Margin trading is high in forex trading. You get significant margins when you sell your pairs. And this exposes you to buying probabilities of more pairs.
• Unlike the stock market, even a small change in the value of currency can affect your pair value in currency market trading.

How to begin

Open an account with any online forex trading agencies. Deposit money to your account and start trading. Before starting to invest, learn the art of trading. Start off with practice accounts to give you more hands-on experience. Most online trading accounts give you access to practice accounts to perfect your art of online forex trading.

Dematerialization converts the securities held by an investor to its electronic form. The number of physical units is equal to the number of electronic units. The amount is credited to the investor’s demat account.

Demat Shares Online >> Here

Advantages of dematerialized securities

Dematerialized securities are a more convenient way of holding securities. If you have shares of multiple organizations, you typically convert all of them into electronic form and credit the same to your demat account.

With dematerialization, your securities are transferred instantaneously. You don’t incur any cost on paying stamp duties for the transfer. You also avoid the risk of being cheated or being at the receiving end of a bad delivery.

Dematerialization reduces paperwork to a minimum. You maintain all records of your shares in electronic format. This is more convenient than maintaining them physically.

Whenever you change your address or bank account with the Depository Participant (DP), this information is registered with all the companies in which you hold shares in. This is better than manually updating all your share accounts in various companies with this information. A centralized system that automatically syncs information across your share accounts saves you a lot of time.

In the event of your demise, your shares are transmitted by the DP. Your family members don’t need to correspond with the different companies to obtain your nominated shares. In the event of non-dematerializing your account, your family members may have to go to each company and spend a lot of time in completing the formalities. This is a highly time consuming process. It may not just take days, it may take months together.

You are directly credited with IPO allotted share profits. Your dividend is directed to your specified account from your multiple company shares.

The process of dematerializing accounts

After locating a DP registered with the SEBI (Securities and Exchange Board), you open a beneficiary account with them. You also open beneficiary accounts with any one of the depositories such as NSDL and CDSL.

After filling the dematerialization request form, you submit the same to your DP. The form should enclose the signature of all shareholders. Also enclosed should be the share certificates. You ensure that the names as per the certificate match to the ones on the DP account.

You need to obtain a written acknowledgement from the depository participant (DP). Once you fill he dematerialization request form, the DP generates the Dematerialization Request Number. This number is transmitted electronically to the company and transfer agent. The transmission is routed through the concerned depository.

The DP whilst sending the dematerialization request number also sends the physical copies of the share certificates to the companies for cross verification. The company, on receiving the filled and duly signed dematerialization request form and the share certificates proceeds to process the request.

The company electronically approves the request and the same is received by the DP. The DP then proceeds to update your demat account with these details.

Pledging facility of dematerialized shares

A much evolved facility offered to NRI investors and local investors alike is the pledging facility. You can use the dematerialized shares as collateral to obtain loans. This facility is monitored by the DP. You will understand the terms and conditions laid out by the DP concerning this activity.

Dematerialization is highly beneficial for NRI investors who can have a centralized system to manage their multiple portfolio investments. This provides better visibility and tracking power over multiple invesments.

A Permanent account number is also known as a PAN. You can use this number as your own personal ID or as a tax id number. This number is given to everyone by the income tax department for you to use as a tax id. This card will look the size of a credit card. It will mention your name, birth date, father’s name, and it will have your photo. It will also have your signature along with your pan number.

If you are ever looking to file taxes, buy property, open a bank account, etc. in India, you need to have a pan card number handy. This is true even for the Non Resident Indians…or NRIs. If you are looking to invest in India or open up a demat account, again, you need a pan card number. If you apply for a pan card ahead of time, it can help you in the future as not having one, will hold up any/all of your investment plans for at least 15 days. The income tax department uses pan card numbers as a way of keeping track of who is paying their taxes on time and who is not.

Are you required to file Taxes in India as long as you have a PAN Number?

Having a pan number does NOT mean that you have to file taxes in India. If you are not makeing money in India, you do not have to pay taxes in India. If an NRIs is making money in a foreign country, then that means that he only needs to file taxes in that country where he/she is making money. If you were to invest into a mutual fund in India and then you make money on it, you will have to pay taxes in India for the profit that you have made. Even if you are not making money in India, if you are associated with india in any way, it is still advisable for you to file your taxes in India. If you did not make any money in India, you can simply file your taxes as “0″. Doing this will give you a very good credit rating in India for the future. This can benefit you if you would even need to apply for a loan in the future. Filing Taxes does not mean that you are paying anything in taxes. If you are an Indian, you should file taxes even if you are an NRI.

How to apply for a PAN card?

NRIs can apply for a pan card online. There are many brokers online that can help you when you are living abroad. When NRIs go through the government directly for a pan card, they usually have issues because they are living abroad, so this is how these brokers come in handy.

= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =

An example of a pan card broker online is: www.PanCardNri.com

= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =

>> You will need to submit some documents along with your pan applications and you might have to have them attested by the Indian embassy or apostilled.

This is a step by step process for getting a pan card number if you are an NRI.

Number 1: Go to a pan card broker site such as: www.PanCardNri.com

Number 2: Go to the “apply now” page and make a payment, then get the forms.

Number 3: The representatives of www.pancardnri.com can help you through the whole process and answer any questions you might have. They also provide you with a full set of instructions for filling the forms.

Number 4: After you fill up the form, send it along with the required documents to their Pan card processing office.

Number 5: The broker will then get all of the remaining attestation done and then submit your application in the pan departments office.

Number 6: The pan department will give a coupon number for the submission. It will be the broker’s job to take it and email it to you.

Number 7: You can track your pan application as it is being processed using this coupon number.

Number 8: Finally, your pan card will be dispatched to your foreign address and you can receive it at the address mentioned on your application.

For those working abroad who also happen to be homeowners, deciding what to do with your house while you are out of the country can be problematic – especially if you are facing the possibility of paying rent in your new country as well as a mortgage on your residence back home. One option available (if you want to avoid selling your home), is to consider renting out your house for the duration of your stay abroad. This can be useful for a few reasons. Firstly, based on the amount of rent you charge versus your monthly mortgage payment, you may be able to bring in additional income each month. Having a little extra money is never a bad thing. In addition to the extra capital, you can rest easy knowing that your home is not sitting empty in your absence. Unoccupied houses, especially those that stay so for an extended period, can attract thieves and vandals, so keeping your home occupied can serve as an added security measure. Bear in mind that any rental income will be taxable.

It is also possible to help build your capital by taking advantage of certain tax loopholes that are available to many expats and those working abroad. In many cases, if you are working outside the country, you are not required to pay income taxes to your home country. Keep in mind, though, that it is ALWAYS important to file your taxes, regardless of your liability. Failing to do so can result in penalties and fines that could be easily avoided. In the United Kingdom, for example, if you are working overseas for the full tax year, you are not liable for income taxes for that particular tax period.  As you may still be responsible for taxes in the country in which you are working, or where your money is invested, it may be advisable to bank using an offshore account to avoid unexpected reporting of income.

Of course, if you are working abroad and have become familiar with the foreign currency exchange market and its processes, you may also consider investing in Forex to increase your capital. A qualified professional can provide with you with the financial advice you need to make educated investing decisions and avoid the pitfalls of haphazard trading. Your capital is your livelihood, not only as current income, but as a means of retirement for your future, and it is important to take every opportunity available to build upon it.

Procedure to Apply for a New or Duplicate PAN card:

STEP 1: Visit www.PanCardNri.com and download a PAN Application.

STEP 2: Fill up the NRI form 49a using Samples & Simple Instructions.

STEP 3: Mail it back with your Supporting Documents + INR (DD).

STEP 4: PanCardNri.com checks your documents & submits to the Govt.

STEP 5: They then follow up with the Government on your behalf.

STEP 6: Track your Status online and Receive it abroad in 15 days.

NOTE: PanCardNri also makes a Bank Demand Draft (DD) in Indian Rupees AND get your documents ATTESTED if needed.

Why is pan card required for NRIs? The main purpose of a pan card is for filing Income tax, but you need to quote your “pan number” in all financial transactions in India. You can find out more about this card at our website.

It is now Required for a foreign company to hold a pan card if they are interested in doing any business in India or with an Indian company. This is true even for the foreign companies with having no offices or presence in India and that are not even registered in India.

Settling financial/tax issues with the CBDT department is made easy with the use of this card. Nowadays, even simply buying a phone or purchasing a phone for your home requires a PAN number; even to reduce your with holding tax OR tds you need a pan number.

When you need to make a business trip abroad, the pan card can serve the purpose of an ID. It works as a legal id proof and it is much easier to use as it simply fits in your wallet like a credit card.

Here are the steps you need to take in order to get a pan card.

Submit your application along with the required documents so that it can be looked over. After that, they are usually sent to the utisl. The income tax department outsources pan cards to the utisl. They will be the ones accepting/denying your pan application. They now have many offices open all over India. They are useful because of the abundance of applications everyday.

Next is processing of your application. If you dont know where to find the pan form for filing a new pan card OR to download duplication pan form and pan card correction form, then you can find it on this website. Online pan forms are very convenient for NRIs as they can just download the form and print it. The name of this form is 49A. It is important that this form is filled correctly without any mistakes and is filled truthfully to the best of your knowledge.

Take your time and write legibly in black color ink. To get started on your NRI pan application 49A or to apply for a pan number online then log into: http://www.pancardnri.com/apply.php or from the Indian income tax pan department website of nsdl or uti. After downloading the nri pan number application, go ahead and print it. If you are in India, you can just go straight to the PanCardNri.com officer or you can simply email them and they will let you submit your forms, help you know all of the information on filing pan card form, and assist you to register a pan number online – easily.

Our site always has the lastest news and updates on applying for a pan card, while other sites take time. Dont forget to get all of your necessary supporting documentation and submit it along with your application, this includes a photo.

There are many things that serve as an ID proof in India such as: Utility bill, passport copy, voter id card, graduation certificate, legal driving id or ration card.

If you cannot find the new pan application, duplicate pan form, lost pan card form or an application to get corrections in a pan card then simply contact us.

Got Questions, email at: info@nriinvestindia.com

FII means an entity established or incorporated outside India which proposes to make investment in India.

Who can get Register as an FII – foreign institutional investor in India?

Ø  Pension Funds.

Ø  Mutual funds.

Ø  Insurance or Reinsurance Companies.

Ø  Charitable Trusts/ Charitable Societies.

Ø  Endowment Funds.

Ø  University Funds.

Ø  Investment Trust

Ø  Asset Management Companies.

Ø  Nominee Companies.

Ø  Institutional Portfolio Managers.

Ø  Banks.

Ø  Trustees.

Ø  Power of Attorney Holders.

Eligibility or Requirements for making an FII:

1.    Applicant should have track record, professional competence, financial soundness, experience, general reputation of fairness and integrity.

2.    The applicant should be regulated by an appropriate foreign regulatory authority in the same capacity/ category where registration is sought from SEBI. Registration with authorities, which are responsible for incorporation, is not adequate to qualify as Foreign Institutional Investor.

3.    The applicant is required to have the permission under the provisions of the Foreign Exchange Management Act, 1999 from the Reserve Bank of India.

4.    Applicant must be legally permitted to invest in securities outside the country or its in-corporation / establishment.

5.    The applicant must be a “fit and proper” person.

6.    The applicant has to appoint a local custodian and enter into an agreement with the custodian. Besides it also has to appoint a designated bank to route its transactions.

FII Sub-Account

Sub-account includes those foreign corporates, foreign individuals, and institutions, funds or portfolios established or incorporated outside India on whose behalf investments are proposed to be made in India by a FII.

Foreign Companies and foreign Individuals can get registered as a Sub- account.

Non Resident Individuals and Overseas Corporate Bodies cannot get themselves registered as Sub-Account.

Investments on behalf of sub-account shall not exceed 10% of total issued capital of Indian company.

Registration fee for a Foreign Institutional Investor is US$ 5,000 and that for a sub-account is US$ 1,000. The fee may be paid by a bankers cheque or Demand draft drawn in favour of “Securities and Exchange Board of India” payable at a bank in New York.

It takes generally 10-12 working days in granting FII registration.

FII registration is valid for 5 years and needs to be renewed upon payment of fee of US $5000.

Foreign Institutional Investor can make Investments in following:

Ø  Securities in primary and secondary markets including shares, debentures and warrants of companies, unlisted, listed or to be listed on a recognized stock exchange in India.

Ø  Units of mutual funds.

Ø  Dated Government Securities.

Ø  Derivatives traded on a recognized stock exchange.

Ø  Commercial papers.

FII/sub-account may issue, deal in or hold off-shore derivative instruments such as Participatory Notes, Equity Linked Notes or any other similar instruments against underlying securities, listed or proposed to be listed on any stock exchange in India.

• Designated Bank means any bank in India which has been authorized by the Reserve Bank of India to act as a banker to FII.

• Domestic Custodian means any entity registered with SEBI to carry on the activity of providing custodial services in respect of securities.

Interested to form an FII or Have Questions??
>> We assist foreign companies to form an FII.!!
Please email us at: info@nriinvestindia.com

Issue name:

Issue Opens :  6th March 2012
Issue Closes:  12th March 2012

Instrument Type: Tax Free Secured Redeemable Non-Convertible Bonds in the nature of Debentures
Indicative Coupon/Interest Rate: 8.12% p.a. (tax free).

Download REC Bond Application Form >> HERE

SUBMISSION CENTERs: Submit your Application at any Bank – ICICI, SBI, HDFC, AXIS, etc.

Got questions, email us: info@nriinvestindia.com

Mode of Allotment: Only in Dematerialised Form (Through DEMAT account only).
Trading Compulsory in dematerialized form over the BSE (Bombay stock exchange).

Issue Size : Rs. 1,500 Crores with an option to retain oversubscription upto a total amount of Rs.3000 Crores.
Credit Rating: “CRISIL AAA/Stable” by CRISIL, “CARE  AAA” by CARE,  “ICRA AAA” by ICRA & “Fitch AAA (Ind)by FITCH.

Tenor:  10 Years and 15 Years from the deemed date of allotment.
Depositories NSDL and CDSL
Proposed to be listed on  BSE

Loan against Bonds: The Bonds can be pledged or hypothecated for obtaining loans.

People/Entities below cannot invest in REC Bonds:
a) Minors without a guardian name;
b) Foreign nationals;
c) Persons resident outside India including NRIs;
d) Overseas Corporate Bodies;
e) FII

Terms of Payment: The entire Face Value per Bond is payable on application. In the event of Allotment of a lesser number of Bonds than applied for, the Company shall refund the amount paid on application to the Applicant, in accordance with the terms of the Prospectus.

TERMS OF THE ISSUE:
The Bonds being offered as part of the Issue are subject to the provisions of the SEBI Debt Regulations, the Companies Act, CBDT Notification, the terms of this Draft Prospectus, the Prospectus, the Application Form, the terms and conditions of the Trustee Agreement and the Debenture Trust Deed, other applicable statutory and/or regulatory requirements including those issued from time to time by SEBI, the GoI, BSE, RBI, RoC and/or other statutory/regulatory authorities relating to the offer, issue and listing of securities and any other documents that may be executed in connection with the Bonds.

1) Authority for the Issue:
The GoI, by virtue of power conferred upon it under item (h) of sub clause (iv) of clause (15) of Section 10 of the Income Tax Act, 1961, has issued CBDT Notification authorising REC to issue the said Bonds upto a total amount of ` 30,000 million during the financial year 2011-12. At the meeting of the Board, held on January 25, 2012 and February 16, 2012, the Board approved the issue of the Bonds for an aggregate amount not exceeding ` 15,000 million with an option to retain oversubscription upto an aggregate amount of ` 30,000 million in the financial year 2011-12.

2) Issue and Status of Bonds:
2.1. Bonds are being issued as Tax free Secured Redeemable Non Convertible Bonds of face value of Rs. 1,000 each in the nature of Debentures having tax benefits under Section 10(15) (iv) (h) of the Income Tax Act, 1961 upto an aggregate amount of ` 30,000 million during the financial year 2011-12.

2.2. The Bonds shall be secured pursuant to a Debenture Trust Deed and underlying security documents. The Bondholders are entitled to the benefit of the Debenture Trust Deed and are bound by and are deemed to have notice of all the provisions of the Debenture Trust Deed.  REC is issuing the Bonds in accordance with the CBDT Notification.

2.3. The Bonds shall be secured by way of first  pari passu charge on the identified immovable property(ies) of the Company and first pari passu charge on the book debts of the Company,  other than those that are exclusively charged/earmarked to ITSL and/or any other lender(s) of the Company, as may be agreed between the Company and the Debenture Trustee, pursuant to the terms of the Debenture Trust Deed with a minimum security cover of one time of the face value of Bonds outstanding at all times.

2.4 The claims of the Bondholders shall be superior to the claims of any unsecured creditors, and shall rank pari passu with other secured creditors having a first  pari passu charge on the identified immovable property(ies) of the Company and/or first pari passu charge on the book debts of the Company that are charged as security under this Issue.

3.  Form, Face Value, Title and Listing etc:
3.1.1. Form of Allotment: The Allotment of the Bonds shall be only in a dematerialized form. REC has made depository arrangements with CDSL and NSDL for issuance of the Bonds in dematerialized form, pursuant to the tripartite agreement dated October 16, 2007  among REC, CDSL and the Registrar to the Issue and the tripartite agreement dated November 15, 2007 among REC, NSDL and the Registrar to the Issue (collectively,“Tripartite Agreements”).

REC shall take necessary steps to credit the Depository Participant account of the Applicants with the number of Bonds allotted.The Bondholders shall deal with the Bonds in accordance with the provisions of the Depositories Act, 1996 (“Depositories Act”) and/or rules as notified by the Depositories from time to time.

3.1.2. The Bondholders may rematerialize the Bonds issued in dematerialized form, at any time after Allotment, in accordance with the provisions of the Depositories Act and/or rules as notified by 244 the Depositories from time to time.

3.1.3. In case of Bonds held in physical form, on rematerialization of Bonds Allotted in dematerialized form,  REC will issue one certificate for each Series of the Bonds to the Bondholder for the aggregate amount of the Bonds that are held by such Bondholder (each such certificate,a “Consolidated Bond Certificate”). In respect of the Consolidated Bond Certificate(s), REC will, on receipt of a request from the Bondholder within 30 days of such request, split such Consolidated Bond Certificate(s) into smaller denominations in accordance with the applicable regulations/rules/act, subject to a minimum denomination of one Bond. No fees will be charged for splitting any Consolidated Bond Certificate(s) and any stamp duty, if payable,will be paid by the Bondholder.The request to split a Consolidated Bond Certificate shall be accompanied by the original Consolidated Bond Certificate(s) which will, on issuance of the split Consolidated Bond Certificate(s), be cancelled by REC.

3.2.  FaceValue: The face value of each Bond is ` 1,000.
3.3.  Title:
3.3.1 In case of:

i) Bonds held in the dematerialized form, the person for the time being appearing in the Register of beneficial owners maintained by the Depositories.

ii) Bonds held in physical form, on rematerization of Bonds allotted in dematerialised form, the person for the time being appearing in the Register of Bondholders maintained by REC/ Registrar shall be treated for all purposes by REC, the Debenture Trustee, the Depositories and all other persons dealing with such persons as the holder thereof and its absolute owner for all purposes whether or not it is overdue and regardless of any notice of ownership, trust or any interest in it or any writing on, theft or loss of the Consolidated Bond Certificate issued in respect of the Bonds and no person will be liable for so treating the Bondholder.

3.3.2 No transfer of title of a Bond will be valid unless and until entered on the Register of Bondholders or the register of beneficial owners, maintained by the Depositories and/or REC or the Registrar to the Issue prior to the Record Date. In the absence of transfer being registered, interest and/or Maturity Amount, as the case may be, will be paid to the person, whose name appears first in the list of beneficial owners, Register of Bondholders maintained by the Depositories and/or REC and/or the Registrar to the Issue, as the case may be. In such cases, claims, if any, by the purchasers of the Bonds will need to be settled with the seller of the Bonds and not with REC or the Registrar to the Issue.

Need REC Application Form >> CLICK HERE

Application Acceptance Centers: Deposit your Application at any Bank – ICICI, SBI, HDFC, AXIS, etc.

Got questions, email us: info@nriinvestindia.com

Disclaimer: “Invest only after referring to final prospectus”.
- Kindly note that online/electronic versions of the application form you are seeking to access are being made available on this website by us on a good faith basis. By accessing this application form you confirm that your downloading, viewing or using the same will not constitute in the jurisdiction applicable to you a directed solicitation and/or a selling efforts. If you are not permitted to view materials on this website or are in any doubt as to whether you are permitted to view these materials, please exit this webpage.
- Making documents available online in an electronic format does not constitute an offer to sell or the solicitation of an offer to buy securities in National Highway Authority of India – NHAI (“Issuer”). Further, it does not constitute a recommendation by NriInvestIndia.com (ni2 Financial Consultancy Pvt Ltd) or any other party to sell or buy securities in National Highway Authority of India – NHAI.
- Use of our website confirms your acceptance to the terms and conditions related to the Issue as provided in the Draft Shelf Prospectus of National Highway Authority of India – NHAI bonds and Prospectus Tranche (referred as the “Prospectus”). You also confirm that you are eligible to make an application for the Issue and the decision to invest in the Issue is based on your own discretion and your examination of the Issuer and the Issue and based on disclosures made in the Prospectus.