Expert Assistance for FDI Filing with RBI

IndiaFilings offers professional services to help businesses with the Foreign Direct Investment (FDI) filing process with the Reserve Bank of India (RBI) through its online reporting portal known as the Foreign Investment Reporting and Management System (FIRMS) portal.

Our service includes filing the Foreign Currency and General Permission Route (FCGPR) form and a Company Secretary (CS) certificate, a mandatory requirement for companies receiving foreign investments.

We understand that compliance with FDI regulations can be complex and time-consuming. With IndiaFilings, businesses can rely on our expertise and experience to ensure that the FDI filing process is efficient, smooth, and compliant with all regulatory requirements.

At IndiaFilings, we believe in delivering high-quality services that are timely, efficient, and cost-effective. Our FDI filing services with the RBI's FIRMS portal are designed to meet the unique needs of businesses of all sizes and industries.

Contact our experts today to learn more about our FDI filing services through the FIRMS portal and how we can help your business comply with all regulatory requirements related to FDI.

Foreign Direct Investment (FDI) filing with Reserve Bank of India (RBI)

Foreign Direct Investment (FDI) filing with the Reserve Bank of India (RBI) refers to reporting the inflow of foreign investment in an Indian company to the 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.

Purpose of FDI reporting with RBI

• FDI reporting with RBI aims to ensure compliance with the FDI policy and provide a transparent and efficient regulatory framework for foreign investments in India.
• This helps the government and the RBI to monitor and regulate foreign investments in the country and to make sure that they comply with the FDI policy and regulations. The reporting of FDI inflows also helps in assessing the impact of foreign investments on the Indian economy and in formulating policies to attract more foreign investments into the country.

Applicable Regulation on FDI filing with RBI

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)

Foreign Direct Investment is an investment made by a foreign company or individual in an Indian company. FDI is a crucial component of India's economic growth and development. It brings capital, technology, and expertise into the country, which can help improve the domestic economy and create jobs.

Conditions required for FDI

• The foreign direct investment must be compliant with the FDI policy.
• Securities issued must be under the Foreign Exchange Management.

Routes of Foreign Direct Investment (FDI)

FDI is permitted fewer than two routes in various sectors:

• Automatic Route: Under this route, non-resident or Indian companies can invest in a company without prior approval from RBI or the Government of India.
• Government Route: Under this route, prior approval from the Government of India is required before investing in a company.

Foreign Currency and General Permission Route (FCGPR) form

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 FCGPR form is used to report the receipt of foreign investments in the form of equity shares, warrants, or partly-paid shares and compulsorily convertible preference shares or debentures.

The FCGPR form must be filed electronically on the RBI's online reporting portal (FIRMS) within 30 days of the receipt of the FDI.

The FIRM's portal can be accessed through the RBI's website, and businesses are required to create an Entity Master and register themselves on the portal before filing the FCGPR form electronically.

When Is the FC-GPR Form Required To Be Filed?

The FC-GPR form needs to be filed in the following cases:

• In the case of incorporation, if the shareholder is a non-resident: After the company's incorporation, a bank account needs to be opened. Once the subscription money is received in the bank account, the company must report to RBI in the FC-GPR form.
• Under FEMA, there is no 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.
• Further issue of shares: Only equity shares, convertible preference shares, and convertible debentures are considered under FDI (Foreign Direct Investment). If share application money is received, claims need to be allotted within 60 days from receipt of the application money. Once shares are allocated, the company must report to RBI in the FC-GPR form within 30 days of allotment.
• Investment in any other instrument will be treated as borrowings and needs to fulfill ECB requirements.

The Time Limit for filing Form FCGPR

Form FCGPR must be filed within 30 days of allotment of shares / Compulsorily Convertible Preference Shares (CCPS)/ Compulsorily Convertible Debentures (CCD).

Documents Required

The following documents are required for filing the FC-GPR form:

• Copy of KYC report of the remitter
• Declaration by an authorized representative of the Indian Company
• CS Certificate stating that all requirements have been complied with SMF- user manual
• A valuation Report by a Chartered Accountant/Merchant Banker indicates the manner of arriving at the price of the capital instruments issued to a person outside India.
• Copy of FIPB approval (if required)
• Letter of Debit Authorization
• Declaration for conversion of CCPS
• Pricing guidelines declaration
• Board Resolution for the allotment of securities along with the List of Allottees
• Reason for any delay in submission, if required
• Any other documents that may be asked for by RBI or AD Bank.
• Once all the required documents are received, the FC-GPR form can be filed.

Penalty for Non-Filing Of Form FC-GPR With RBI:

A company will be penalized if it fails to file the FC-GPR form within the prescribed timeline. The penalty for delay in reporting is 1% of the total investment amount, subject to a minimum of INR 5,000 and a maximum of INR 5 lakhs per month or part thereof for the first six months of delay. After six months, the penalty rate doubles to 2% per month until non-compliance is rectified. The penalty must be paid online into a designated account in RBI. It is, therefore, important for companies to ensure that they file the FC-GPR form within the stipulated time to avoid any penalties.

Process for Filing FCGPR

Filing Foreign Direct Investment (FDI) with the Reserve Bank of India (RBI) using Form FC-GPR involves several steps.

Obtain Authorized Dealer (AD) Code: The first step is to obtain an Authorized Dealer (AD) Code from a bank authorized 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.

Registration of Entity User on Firms Portal: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.

Creation of Entity Master: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.

Registration for Business Users on Firms Portal:After creating the Entity Master, the company must register the Business Users authorized to access the Firms Portal and submit the FCGPR form. The Business Users must provide their details and obtain a User ID and Password.

Preparation of Form FC-GPR: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.

Provide Relevant Information: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.

Signing and Certification: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.

Reporting of FDI Received: 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 authorized 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.

Submission of Form: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.

Acknowledgment Receipt:After submission of the FCGPR form, the Firms Portal generates an acknowledgment receipt. The company must download and save the acknowledgment receipt for future reference.

Follow-up: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.

How IndiaFilings can help in this process

IndiaFilings is a platform that provides professional services to businesses and individuals in India. They offer various services related to company incorporation, compliance, tax filings, and more. IndiaFilings can help businesses with the FDI filing process with the RBI in the following ways:

Obtain AD Code:IndiaFilings can help companies obtain an AD Code from an authorized bank.

Entity Master Creation:IndiaFilings can help companies create an Entity Master on the RBI's online reporting portal.

Business User Registration:IndiaFilings can assist in registering Business Users who will be authorized to access the Firms Portal and submit the FCGPR form.

Preparation and Review of FCGPR Form:IndiaFilings can help companies prepare and review the FCGPR form to ensure that all the required information is provided accurately and in the required format.

Submission of FCGPR Form:IndiaFilings can assist in submitting the FCGPR form to the AD bank electronically on the RBI's online reporting portal.

Follow-up:IndiaFilings can follow up with the AD bank to ensure that the RBI has accepted the FCGPR form and to address any discrepancies or clarifications sought by the RBI.

In addition to the above, IndiaFilings can also provide advisory services on the various regulations related to FDI and other compliance requirements. We can also help businesses with various other regulatory filings and compliance requirements.