Analysis And Prevention On Legal Risk Of Chinese Firms Investing And Developing In India Real Estate Industry

In recent years,India real estate has developed rapidly with the support of favorable domestic policies and the rise of market demand in the background of the improvement of the macro environment for foreign investment and the promotion of the ‘One Belt and One Road'Initiative.And Chinese firms began to invest in India real estate industry.However,Chinese firms are faced with certain legal risks in the investing stage of admission,operation and exit.The main risks faced during the admission stage are: the legal risks of restrictive provisions in the admission stage and the legal risks of the national security review.The main risks faced during the operation stage are: the legal risks derived from the practice of Real Estate(Regulation and Development)Act,2016 including legal risks of enterprise decision-making and management,legal risks of land management and labour laws.The main legal risks faced during exit stage are: the legal risks of restrictive provisions in the exit stage and the legal risks of nationalization and expropriation.In view of the above-mentioned legal risks,the following countermeasures should be taken: Chinese firms can set up enterprise in third countries,invest in India real estate in another way around,weaken foreign investors' identity and adopt different business entities in different stages during admission stage.Chinese firms ought to familiar with specific provisions on India real estate management,conduct due diligence on land title,make use of data from Digital India Land Records Modernization Programme and provide training in localization and professionalization of labour during operation stage.Chinese firms also can take advantage of overseas investment insurance system,convention establishing the multilateral investment guarantee agency or franchise agreement signed with host country to protect its interests in exit stage.