When a business entity in India receives Foreign Direct Investment (FDI) and issues shares to a foreign investor, it must adhere to the RBI's FDI filing requirements.
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When a business entity in India receives Foreign Direct Investment (FDI) and issues shares to a foreign investor, it must adhere to the RBI's FDI filing requirements. This involves submitting the Form FCGPR through the online Foreign Investment Reporting and Management System (FIRMS) portal.
LegallensIndia can assist you in efficiently navigating the FDI filing with the RBI. Our expertise ensures that your business complies seamlessly with all regulatory requirements.
Reach out to us today for professional support in managing your FDI Filings.
Foreign Direct Investment (FDI) filing refers to reporting the inflow of foreign investment in an Indian company to the the Reserve Bank of India (RBI). This reporting is mandatory for Indian companies that receive foreign investments in equity shares, compulsorily convertible preference shares or debentures, and warrants or partly-paid shares. The reporting process involves submitting the Foreign Currency and General Permission Route (FCGPR) form and a Company Secretary (CS) certificate.
The regulations applicable to Foreign Direct Investment (FDI) filing with the Reserve Bank of India (RBI) are primarily governed by the Foreign Exchange Management Act, 1999 (FEMA) and its regulations.
Foreign Direct Investment (FDI) involves a foreign company or individual investing in an Indian company. To ensure legal compliance, the investment must adhere to the FDI policy outlined by the Indian government. Additionally, the securities issued must be regulated under the Foreign Exchange Management Act (FEMA).
FDI is permitted fewer than two routes in various sectors:
To ensure that foreign investments are in compliance with the FDI policy and regulations, the Reserve Bank of India (RBI) has mandated that all FDI inflows in India must be reported to the RBI through the Foreign Currency and General Permission Route (FCGPR) form.
The FC-GPR form needs to be filed in the following situations:
Under FEMA, there is no specific timeline for bringing in the subscription money for newly incorporated companies. However, under the Companies Act 2013, subscribers must bring in the subscription amount within 180 days from the date of incorporation.
Form FCGPR must be filed within 30 days of the allotment of shares, Compulsorily Convertible Preference Shares (CCPS), or Compulsorily Convertible Debentures (CCD).
The following documents are required for filing the FCGPR form:
If a company fails to file the FCGPR form within the prescribed timeline, it will face penalties.
Filing Foreign Direct Investment (FDI) with the Reserve Bank of India (RBI) using Form FCGPR involves several steps.
The first step is to obtain an Authorized Dealer (AD) Code from a bank authorised by the RBI. The AD bank acts as an intermediary between the company and the RBI and verifies the information provided in the FCGPR form.
The Indian company must register as an Entity User on the RBI's online reporting portal (Firms Portal). The company must provide its details and obtain a User ID and Password.
Once registered on the Firms Portal, the company must create an Entity Master by providing details such as name, address, PAN, TAN, and other relevant information.
After creating the Entity Master, the company must register the Business Users authorised to access the Firms Portal and submit the FCGPR form. The Business Users must provide their details and obtain a User ID and Password.
After obtaining the AD Code, the company must prepare the FCGPR form in the required format. The form can be accessed on the RBI's online reporting portal.
The company must provide relevant information in the FCGPR form, including the details of the foreign investor, the amount and type of investment, and the percentage of equity held by the foreign investor. The company must also provide information on the sector where the investment is made and any other relevant details per the guidelines.
The FCGPR form must be signed and certified by the company's authorized signatory and the AD bank's authorized signatory. The certification must confirm the accuracy and completeness of the form's information.
The Indian company must report the receipt of FDI within 30 days of receipt using Form FC-GPR on the Firms Portal. The FCGPR form must be duly filled, signed, and certified by the company's and AD bank's authorised signatory. The company must also upload the required documents, such as the Foreign Inward Remittance Certificate (FIRC) and the KYC documents of the foreign investor.
Once the FCGPR form is duly completed and certified, it must be submitted to the AD bank electronically on the RBI's online reporting portal within 30 days of receiving the FDI.
After submission of the FCGPR form, the Firms Portal generates an acknowledgment receipt. The company must download and save the acknowledgement receipt for future reference.
The Company must follow up with the AD bank to ensure that the RBI has accepted the FCGPR form. The company must promptly address any discrepancies or clarifications if the RBI seeks any differences or clarifications.
Choose LegallensIndia for your FDI filing with the RBI to ensure a smooth and hassle-free process. Our team of experts provides comprehensive support, from document preparation to timely submission, ensuring full compliance with RBI regulations. With our in-depth knowledge and experience, we help you navigate the complexities of FDI filings, saving you time and preventing costly penalties.
In addition to FDI Filings, We can also help businesses with various other regulatory filings and compliance requirements.
