FEMA - FDI Issues & UpdatesCA Murali Krishna Ggmk@sbsandco.comDate: 19th February 2016 by

Construction Sector FDI PolicyDevelopment of Serviced PlotsNo Minimum Land AreaConstruction Development ProjectsNo Minimum Floor areaMinimum InvestmentNot ApplicableEach Phase of the ProjectConsidered to be separate projectLock-in PeriodEarlier of 3 Years of each tranche or Project Completion or Trunk InfrastructureApplicable Norms for the ProjectBuilding Regulations of State Government/ Municipality/ Local BodySale of Undeveloped PlotsNot PermittedResponsibility of monitoringLocal Authority

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Renting of Immovable PropertyRenting of Immovable property (not amounting to transfer) is no more considered as Real Estate BusinessSharing of common infrastructure among group companies - subject to the below:ALP norms are followedThe rental Income does not exceed 5% of total revenue319/02/16www.sbsandco.com

Issue of Partly paid sharesPartly paid equity shares or share warrants Automatic RouteCCDs and CCPs fully paid only419/02/16www.sbsandco.com

Foreign Investment Prohibited Sectors (1/2)Atomic EnergyLottery Business including Government / private lottery, online lotteries etc.Gambling and Betting including casinos etc.Business of chit fundNidhi CompanyTrading in Transferable Development Rights (TDRs)Agriculture (excluding Floriculture, Horticulture, Development of seeds, Animal Husbandry, Pisciculture and cultivation of vegetables, mushrooms etc. under controlled conditions and services related to agro and allied sectors) and Plantations (Other than Tea Plantations, coffee, rubber, cardamom , palm oil tree and olive oil tree plantations)519/02/16www.sbsandco.com

Foreign Investment Prohibited Sectors (2/2)Real estate business, or construction of farm houses.Manufacturing of Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco or of tobacco substitutes.Activities / sectors not opened to private sector investment including Atomic Energy and Railway Transport (other than Mass Rapid Transport Systems).foreign investment in any form, foreign technology collaboration in any form including licensing for franchise, trademark, brand name, management contract is also completely prohibited for Lottery Business and Gambling and Betting activities.Foreign investment in Trusts other than investment by SEBI registered FVCIs in domestic VCF619/02/16www.sbsandco.com

Investment in Limited Liability Partnership FirmNon Resident Investor can invest on repatriation basis under automatic route where 100% FDI is permitted and there are no FDI linked performance related conditions.Amount is invested by inward remittance or out of NRE/FCNR(B)/NRO account maintained with AD/ Authorized banks.LLP is now eligible to make downstream investmentsOnly by way of cash considerationLLPs not be permitted to avail ECBsThe entity should not engage any prohibited activityConversion of a company with FDI, into an LLP, with the prior approval of FIPB/Government

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