India is developing with the highest growth rate in terms of the economy which makes people invest in the land of opportunities. Many multi-national companies across the globe are seeking their chances and started investing with different aspects. This also opens a way for many NRIs to invest. The easiest and the most reliable way to invest mainly for NRIs is to check the different prospects of investing in “Real Estate” and “Financial Estate” which comes with benefits over the course of time.
Real Estate Investment
It is one of the most popular investment plans among the NRIs as they get the possession of the land which comes with great returns after some years. All the rules and regulations should be followed as they have been regulated by the government of India and once all the correct and valid documents are submitted, physical presence is required for the maintenance and for getting the possession of the land or the property. Although it comes with great returns, it needs a long-term investment and it is one of the causes of inviting black money from foreign land in Indian currency circulation. There are different smart city projects in which Indian government allows NRI investors to invest in the development of new smart city with an allocation of 7060 crore rupees. As it was initiated by the government of India, so the risk factors are minimal with high returns and a feeling of safety for all the investments made by them.
There are certain rules which bind the investments in certain areas
• Any immovable property can be purchased by any NRI except an agricultural land, plantation property, and a farm house.
• NRI can also receive the remaining land as a gift from someone who is Indian citizen residing out of India or anyone who is of Indian origin.
• Later he can put the same land under sale which should be acquired by a resident of India.
• If an NRI owns an agricultural land, plantation property, and a farm house, he can transfer the land as a gift to any Indian resident.
Whatever be the reason, an investment in real estate or planning to make it big in real estate, even if you are an NRI, it is an investment that gives higher returns eventually. Investment in real estates also is a secure option making better planning for their return in future. Anytime, in future when they have to return, they can live in any of the property invested in. There is very less chance of NRIs returning, yet the possible flow of cash, if the property has been rented out or on a lease is a great source of income.
Gone are the days when NRIs only invested in Real Estate, now Financial Estate is another investment people settle for. With multi-national and nationalized banks offering various schemes of investment, one can easily invest and get annual return without being present physically.
Financial Estate has a higher edge over Real Estate in a few aspects
•While for Real Estate Investment, there has to be someone physically present to look after the property in the form of a tenant or an attorney; however, in case of Financial Estate, the investment is free from any obligations.
•The convenience of maintaining any financial transaction or assets is way better than that of the Real Estate. Less time to invest, less effort and you have better returns and profits in the long run. The only factor to be considered is the policy of tax. The policy can vary from a resident of a country and an NRI.
•It can be considered for a very short time to a longer period of time. It can be from one week to even 15 years and maybe more than that.
There is more liquidity with financial assets as reselling gets easy and demands less time. There are three major channels by ways of which an NRI can handle the Financial Assets.
They are mentioned below-
1.NRE or Non-Resident Rupee
2.NRO or Non-Resident Ordinary Rupee
3.FRCNR or Foreign Currency Non-Repatriable Account
The documents and procedures along with the terms and conditions for an NRI by a Bank or any Financial Institution differ when compared to the permanent resident of India. It is important to be well-equipped with the interest rate, procedures, terms and conditions applied upon an NRI on any kind of investment, especially a financial one.