India · Structures
The structures that hold Indian land.
A foreign person cannot hold Indian land directly. Everything else in cross-border development follows from that sentence. These are the lawful architectures above an Indian real asset, the traps between them, and the exit fabric every structure is built against.
01 · The base fact
Where every structure begins
The land is held by an Indian company, or it is not held.
Under India's exchange-control law, a person resident outside India does not acquire immovable property, short leases aside. The lawful instrument above Indian land is therefore an Indian company, which the law treats as resident regardless of who owns it. Every serious inbound structure is a downstream Indian entity, and the interesting questions all live in how that entity is owned, funded and exited.
This is not tax planning. It is the entry ticket, and structures that try to be clever about it stop being structures and start being findings.
02 · The company route
The default
Own the company, inherit its conditions.
A wholly owned subsidiary or a joint-venture company is the default holding instrument. Once foreign-owned or foreign-controlled, the company's own downstream investments count as indirect foreign investment, and the sector's conditions follow the money down the chain. Owning an Indian company is not an exemption from the rules. It is how the rules attach.
- Control brings consequences
Majority beneficial ownership, or the right to appoint most of the board, makes the company foreign-controlled. Its downstream equity then carries the entry route, the caps and the sectoral conditions of whatever it invests in.
- The funding rule most entries break
A foreign-controlled company does not fund downstream equity from domestic borrowings. Internal accruals or fresh foreign equity, nothing else. This is breached routinely in the market and found routinely in diligence, which is the worst possible order.
- Pricing is not negotiable paper
Entries and exits between residents and non-residents price against fair value, certified under a recognised methodology. A non-resident does not buy below it or sell above it, and the certificate is part of the file.
- Filings are the structure's pulse
Every instrument issued, transferred or pushed downstream has a reporting form and a deadline. We diarise them at entry, because a structure with missed filings is a structure with a discount attached.
03 · The partnership trap
A common, expensive error
The partnership vehicle reads cheaper and closes the door behind you.
Foreign investment into a limited liability partnership is permitted only where the sector carries no investment-linked conditions. Construction development carries them, which closes the partnership route for development almost entirely, and takes its downstream investments with it. Entries are drawn to the vehicle for its lighter compliance and discover the wall at the worst moment: when the structure already holds land.
We have watched this error priced into distressed sales. It is cheaper to read this paragraph.
04 · The fund route
The sophisticated entry
One sentence in the rules carries the institutional market.
Downstream investment by a regulated Indian investment vehicle whose sponsor and manager are owned and controlled by resident Indian citizens is treated as domestic investment. Foreign capital committed into such a fund reaches a development entity without the sectoral conditions and without the lock-in that attach to the direct route. That single treatment is why pooled institutional capital increasingly enters through regulated fund structures rather than through direct company ownership, and why the choice of manager is a structuring decision before it is a commercial one.
Alongside it stands the international financial services centre regime: an onshore jurisdiction built to repatriate the fund domiciles that once defaulted offshore, with its own regulator and its own tax treatment. Between the two, the honest question for a first India deployment is no longer whether to structure through India, but which Indian door fits the capital.
The analysis turns on facts that shift with control, with the manager, and with amendment cycles, so the entry memorandum records not just the route chosen but the routes rejected and why. Your counsel signs the law. We hold the commercial logic they are advising against.
05 · The exit fabric
Where money comes home
An exit is built, not found.
- Completion and the municipal test
The direct route's exit follows completion or trunk infrastructure, as the municipality defines them. The definition is a fact to be evidenced, and we evidence it item by item.
- Phase-wise release
Each phase is a separate project. A well-cut phase map turns one long lock into a sequence of shorter ones, and a badly cut one does the reverse.
- Offshore transfer
A transfer between non-residents, without repatriation, sits outside the lock-in entirely. For platform capital, the secondary sale of the holding structure is an exit lane in its own right.
- Income, not disposal
Rental income on leased assets sits expressly outside the prohibited land-trading definition. Hold-for-yield is a lawful strategy in a way buy-to-sell land is not, and the structure should know which one it is from day one.
- The listed channel
India's listed real estate trusts have matured into a genuine exit market for completed, income-producing assets. An asset built to institutional and regulatory grade is an asset the listed channel can eventually price, and we build with that reading in view.
06 · Structure follows exit
The decision rule
Choose the way out, then build the way in.
Every architecture on this page is judged by one test: how does the capital come home, on what date, under whose definition of done. That test is settled at the first of the Eight Gates and written into the entry memorandum, with the lock calendar and the rejected routes attached. Structures chosen for entry convenience are re-chosen later at a price.
Enquiries
The practice answers.
128 City Road, London, EC1V 2NX
The development practice is led by Tanishq Chauhan. Correspondence reaches the principal directly.
Tanishq Chauhan on LinkedIn, opens in a new tab
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