NRI investment on a non-repatriation basis is the least-known and most powerful route for NRIs and OCIs putting money into Indian businesses: under Schedule IV of the FEMA (Non-Debt Instruments) Rules, 2019, such investment is deemed to be domestic investment – on par with investment by residents. That one sentence removes almost the entire FDI rulebook: no sectoral caps, no pricing guidelines, no FC-GPR reporting. This guide explains how the route works, when to choose it over normal (repatriable) FDI, and its few real restrictions.
The two bases every NRI investment falls under
| Aspect | Repatriation basis (Schedule I FDI) | Non-repatriation basis (Schedule IV) |
|---|---|---|
| Legal character | Foreign investment – full FDI rulebook applies | Deemed domestic investment |
| Sectoral caps & conditions | Apply (per FDI policy) | Do not apply |
| Pricing guidelines (FMV floor) | Apply – valuation certificate needed | Do not apply – invest at any price the parties agree |
| RBI reporting (FC-GPR/FC-TRS) | Mandatory, with timelines | Not required |
| Take the money back abroad? | Yes – sale proceeds freely repatriable | Principal stays in India (NRO); current income (dividends, interest, rent) remains repatriable within the USD 1 million/year NRO scheme |
| Funding source | Inward remittance / NRE / FCNR(B) | Inward remittance or NRE / FCNR(B) / NRO balances |
What you can invest in under Schedule IV
- Equity instruments of Indian companies – equity shares, compulsorily convertible preference shares (CCPS) and debentures (CCD) – without limit, purchased from the company or from other holders;
- Units of investment vehicles (mutual funds, and units of investment vehicles as permitted);
- Capital of an LLP / partnership firm or a proprietary concern carrying on business in India.
The restrictions that DO remain
Schedule IV keeps a short negative list. The investee (company, firm or proprietary concern) must not be engaged in:
- agricultural or plantation activity;
- real estate business (trading in land/immovable property or transferable development rights) or construction of farm houses – note that development of townships/built-up infrastructure is a different, permitted activity;
- print media (for contribution to firms/proprietary concerns);
- and the investment cannot be made in Nidhi companies or chit funds (chit fund subscription has a separate limited window).
Mechanics: how the money flows
| Step | What happens |
|---|---|
| 1. Fund | Remit from abroad or use NRE / FCNR(B) / NRO balances |
| 2. Invest | Subscribe or purchase; no valuation certificate or RBI form required (keep board minutes, share certificates, bank trail as for any domestic investment) |
| 3. Hold | Dividends/interest/profit share are current income – credited to NRO, taxable in India like a resident’s income, repatriable under the USD 1 million/year scheme with Form 15CA/CB |
| 4. Exit | Sale/redemption proceeds go to the NRO account; principal is not directly repatriable, but the USD 1 million per financial year NRO remittance window (all NRO sources combined) is available with tax clearance |
Non-repatriation vs FDI: choosing correctly
- Choose Schedule IV when: funding your own/family business; the sector has FDI conditions you want to avoid; speed matters (no valuation, no FC-GPR); you plan to redeploy money within India anyway.
- Choose repatriable FDI when: you may sell and want the full proceeds abroad without the USD 1 million ceiling; foreign co-investors are involved (their money is FDI anyway); institutional exit (buy-back by foreign parent etc.) is contemplated.
- The two can coexist: part of your holding on repatriation basis (filed via FC-GPR) and part non-repat – keep the folios/records clearly separated.
Structuring an investment into an Indian business?
Get the route, documentation and tax side done right the first time – our partner team handles NRI investment structuring end to end.
Talk to My Cloud AccountantFrequently asked questions
Is there any limit on how much an NRI can invest on non-repatriation basis?
No monetary or percentage limit under FEMA – the investment is treated as domestic. Company-law limits (like private company shareholder counts) apply as they would to any resident investor.
Can I fund my own Indian startup this way and avoid FC-GPR?
Yes – if you invest on non-repatriation basis from NRE/NRO/FCNR funds, the company issues shares to you like to a resident: no FC-GPR, no pricing certificate. Many NRI founders needlessly run the FDI route for their own money.
Can the investment later be converted to repatriation basis?
There is no automatic conversion. Fresh investments can be made on repatriation basis, and the NRO USD 1 million/year window can move funds out over time. Plan the basis before investing, not after.
Does Schedule IV work for buying listed shares?
Yes – NRIs can buy listed shares on non-repatriation basis (this operates outside the PIS/repatriable portfolio route), as well as unlisted shares, without pricing guidelines.
What about investing in an LLP?
Contribution to LLP/firm capital on non-repatriation basis is permitted, subject to the same negative list (no agri/plantation, real estate business, print media). On repatriation basis, LLP investment runs under the separate FDI-in-LLP conditions – see our FDI in LLP guide.
Fact-checked against the FEMA (Non-Debt Instruments) Rules, 2019 (Schedule IV) as amended, including the 2026 amendment rules. Last reviewed: July 2026.