Fema rules for incorporation of a real estate llp


5 NRIs and 5 People of Indian origin in USA want to contribute in capital to an LLP with an Indian Real Estate Pvt Ltd Company. The LLP will construct and sell group housing and share the profit amongst the partners. Questions:

1) Is the above LLP allowed to be created?

2) Will the NRI and People of indian origin be able to transfer their profits to US?


The guidelines of FEMA do not apply to investment by NRIs individually. If however NRIs wish to invest through their foreign companies (or any non-individual entity), then the FDI guidelines will apply.

NRIs are also permitted to invest on non-repatriable basis. Investment can be made in a company (schedule 4 of FEMA notification 20), or a firm or a proprietory concern (FEMA notification 24). Investment in an LLP, AOP, or any other entity is not permitted. Real estate business means only construction and development activity. Thus leasing or trading is not permitted. Investment in agricultural property, plantation, and farm houses is not permitted.




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