# NRI Investment Rules under FEMA

> NRIs and OCIs can invest in Indian shares, mutual funds, bonds, property and businesses either on a repatriation basis — funded from abroad or an NRE/FCNR account, with proceeds freely remittable — or on a non-repatriation basis from an NRO account, which FEMA treats like domestic investment. Listed shares on a repatriation basis are capped at 5% of a company per NRI. Agricultural land, plantations and farmhouses can't be bought.

Practice: FEMA & RBI Compliance — https://www.industax.com/services/fema-rbi/

The choice of route decides how easily you can take money out later, so it should be made deliberately for each investment. A non-repatriation investment can still be repatriated within the NRO USD 1 million a year facility, with tax paperwork.

Unlisted company shares, LLP contributions and partnership investments have their own conditions — some businesses (real estate business, agricultural activities, print media in partnerships) are off-limits. We confirm what is allowed, open the right account route and keep records ready for repatriation and tax.

## Key facts

| Item | Detail |
| --- | --- |
| Repatriation basis | Funded from abroad or NRE/FCNR; proceeds remittable |
| Non-repatriation basis | NRO funds; treated as domestic investment |
| Listed shares (repatriable) | 5% per NRI; 10% aggregate (can be raised to 24%) |
| Property | Residential and commercial allowed; not agricultural land or farmhouses |
| Mutual funds | Allowed; some AMCs restrict US/Canada residents |

## Who needs this

- NRIs and OCIs building Indian portfolios
- NRIs investing in a family or startup business
- NRIs planning future repatriation

## What's included

- Route selection per investment
- Account and PIS set-up guidance
- Business-investment eligibility check
- Tax and repatriation planning

## Documents

- Passport / OCI card and overseas address proof
- NRE/NRO account details
- Investment documents

## Process

1. **Plan** — Route and account chosen for each investment.
2. **Invest** — Funded and documented correctly.
3. **Track** — Records kept for tax and repatriation.

## Also covers

- **NRI investment tax** — How each investment is taxed — linked to our NRI tax pages.

## FAQs

### Can an NRI invest in a private limited company?

Yes — on a repatriation basis as FDI (with FC-GPR reporting by the company) or on a non-repatriation basis, subject to sectoral rules.

### Can NRIs buy agricultural land?

No. NRIs and OCIs can't buy agricultural land, plantations or farmhouses, though they can inherit them.

### Why won't some mutual funds accept me as a US NRI?

Some fund houses restrict investors resident in the US and Canada because of FATCA and local securities rules — it's a fund-house policy, not a FEMA ban.

## Official sources

- RBI — Master Directions (Foreign Investment, Overseas Investment, LRS): https://www.rbi.org.in/Scripts/BS_ViewMasterDirections.aspx
- DPIIT — Consolidated FDI Policy: https://dpiit.gov.in/

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Canonical page: https://www.industax.com/services/fema-rbi/nri-investment-fema
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.