MUMBAI: The Reserve Bank of India extended curbs on real-estate transactions in India by Chinese people to residents of Hong Kong and Macau as well, since it believes some Chinese citizens may have been using independent enclaves to buy properties in this country.
In a notification, the RBI said residents of Hong Kong and Macau cannot buy or sell properties in India without prior approval of the banking regulator. Currently, no citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan can buy or sell immovable property in India without the approval of the RBI. They can lease properties for up to five years.
According to the central bank, the decision was made in consultation with the government. The RBI in its notification said: "It has been observed that Macau and Hong Kong are the two Special Administrative Regions of China. As they are notified separately, it has been decided, in consultation with the government of India, that citizens of Macau and Hong Kong will also be included in the list of countries which are prohibited to acquire/transfer immovable property in India in terms of Regulation 7 of Fema."
Although the Chinese government has maintained that it would allow Hong Kong to retain its independence after it was handed over by Britain to China in 1997, Beijing continues to have a significant say in their political framework.
A tax consultant, who has over 50 clients in Hong Kong on condition of anonymity said, "This is applicable to citizens of Hong Kong and Macau and not to a person of Indian origin who isn't holding a Chinese or Hong Kong passport. It won't be applicable to most or all persons of Indian origin residing there, holding Indian or British passports. The decision is political as it was applicable to China, and Hong Kong is part of China."