What is direct investment outside India? Discuss the regulations in respect of acquisition and transfer of immovable property outside India.

Direct investment outside India means investment by way of contribution to the capital or subscription to the Memorandum of Association of a foreign entity, signifying a long term interest (setting up a Joint Venture (JV) or a Wholly Owned Subsidiary (WOS)) in the overseas entity and thus does not include portfolio investment. The Foreign Exchange Management Act, 1999 (FEMA) empowers the Reserve Bank to frame regulations to prohibit, restrict or regulate the acquisition or transfer of immovable property outside India by persons residents in India. The regulations governing acquisition and transfer of immovable property outside India are notified under Foreign Exchange Management (Acquisition and Transfer of Immovable Property outside India) Regulations as amended from time to time. A person resident in India can, acquire property outside India if so permitted under the FEMA or the regulations framed thereunder or with the general or special permission of the Reserve Bank. A person resident in India may acquire immovable property outside India by way of purchase out of foreign exchange held in Resident Foreign Currency (RFC) account maintained in accordance with the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations. According to the Foreign Exchange Management (Acquisition and Transfer of Immovable Property outside India) Regulations, Reserve Bank is empowered to permit a company incorporated in India having overseas offices, to acquire immovable property outside India for its business and for residential purpose of its staff subject to such terms and conditions as it considers necessary and a person resident in India who has acquired immovable property outside India may transfer it by way of gift to his relative who is a person resident in India, provided there is no outflow of funds from India.