S0008 Purpose Code: Repatriation of Foreign Direct Investment made by overseas Investors in India, in real estate

Purpose code S0008 is used when an Indian company or resident investor pays an overseas investor to repatriate foreign direct investment in Indian real estate.

What is the S0008 purpose code?

Purpose code S0008 is used when money is sent abroad from India to repatriate foreign direct investment in Indian real estate held by an overseas investor. It covers outward remittances such as paying a non-resident investor for sale, reduction, or exit of their FDI stake in Indian real estate in line with RBI regulations. It does not apply to routine payments for construction, brokerage, or property management services, which fall under the relevant current account service codes. Under RBI FEMA guidelines, this outward payment is classified under capital account and reported accordingly.

When to use S0008 purpose code?

Use S0008 when you are remitting funds abroad to a non-resident investor to repatriate their foreign direct investment in an Indian real estate project or property. It is the correct RBI purpose code for capital account remittances that represent the exit, reduction, or transfer of FDI in Indian real estate back to the overseas investor. S0008 covers the repatriation of the investment itself, not ongoing service or construction payments.

When to use a different code:

• Use the appropriate construction or development service code when the payment is for building or project execution services
• Use the appropriate rental or property management service code when the payment is for ongoing management or lease services
• Use the matching P code when you are receiving money rather than paying

Who typically uses S0008 purpose code?

Indian companies, LLPs and other entities that have received FDI in real estate and are now remitting funds abroad to allow the overseas investor to repatriate their investment. Resident individual investors who are party to compliant FDI real estate structures and are settling repatriation payments to non-resident co-investors may also use this code, subject to RBI and FEMA rules.

Examples of transactions covered

• Remittance to a non-resident investor for repatriation of their FDI stake in an Indian commercial real estate project after exit
• Payment to an overseas parent company to repatriate foreign equity invested in an Indian real estate subsidiary on winding up
• Outward transfer of funds to a foreign joint venture partner to settle repatriation of their capital contribution in an Indian real estate SPV
• Remittance to an overseas fund to repatriate its foreign direct investment in an Indian residential development under approved FDI terms

When NOT to use S0008 purpose code

• The payment is for construction or project execution services rather than repatriation of FDI (use the relevant construction service code)
• The payment is for rental, brokerage or property management fees on real estate (use the relevant service code for those charges)
• The payment is for purchasing property abroad or making a fresh overseas investment (use the appropriate outward investment or property purchase code)
• You are receiving money rather than paying (use the matching P code)

Documents required

To send a payment under S0008, keep the following documents ready so your authorised dealer bank can verify the transaction and report it correctly under FEMA.

How is a S0008 Purpose Code declared?

Declaring the code is pretty straightforward. Here's how the payment gets tagged and reported.

1. Confirm the repatriation transaction: Finalise the FDI exit terms with the overseas investor and gather the share transfer or repatriation agreement and supporting approvals.
2. Complete FEMA FDI filings: Ensure the required FDI reporting, such as the applicable FC-TRS or other capital account filings on the RBI portal, are completed or in process as per the transaction structure.
3. File Form 145: Submit the declaration before remitting, with Form 146 from your CA where the taxable amount exceeds ₹5 lakh in the Tax Year.
4. Complete Form A2: State the purpose of the outward remittance as S0008 and submit the supporting documents to your bank.
5. Get your MT103: Once the payment is sent, request the SWIFT MT103 as proof and retain your Form A2 record.

Common mistakes to avoid

A few common slips can hold up your payment or cause compliance issues. Here's what to watch for.

1. Mixing capital and current account flows: Tagging a construction or service payment as S0008 when it is not a repatriation of FDI in real estate.
2. Code and invoice mismatch: Using S0008 when the contract or supporting documents do not clearly show an FDI real estate repatriation, which can flag the payment.
3. Assuming a Rule 220(3) exemption: Skipping Form 145 on a capital account payment that is not on the specified exemption list, which carries a ₹1,00,000 penalty per instance.
4. Incomplete documents: Missing FDI agreements, approvals, filings or Form A2, so the bank holds the remittance until provided.
5. Missing PAN or KYC: Incomplete verification for the remitter or beneficiary stops the bank from releasing the payment.
6. Using an outward code for an inward receipt: Applying S0008 to money coming in from abroad instead of using the matching P code for receipts.

How Skydo helps Indian businesses with cross-border payments

S0008 covers capital account transactions, which sit outside the PA-CB framework and which Skydo does not process. If you also invoice foreign clients or pay overseas vendors, here is where Skydo fits.

1. Complete onboarding: Share PAN, Aadhaar and business details. Setup is fully online and takes about five minutes.
2. Get virtual account details: Receive from international clients in USD, GBP, EUR and other currencies they already pay in.
3. Pay your overseas vendors: Send payments to foreign suppliers, software platforms and service providers under Skydo's outward approval.
4. Documentation in one place: Your invoices, remittance records and payment proofs stay together for your CA and your AD bank.
5. A rate you can see: The live mid-market rate with a transparent fee, instead of a markup hidden inside the bank's rate.