FDI filing with RBI
FCGPR filing is a mandatory RBI reporting requirement under FEMA compliance for foreign investment via a Convertible Note. The filing requires a Company Secretary certificate to be completed through the FIRMS portal.
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FDI Filing with RBI: A Comprehensive Guide
FDI filing is the mandatory process of reporting foreign investments to the Reserve Bank of India (RBI). This ensures that all foreign capital inflows into Indian companies comply with the government’s FDI regulations and the Foreign Exchange Management Act (FEMA), 1999. The primary form used for this reporting is the Form FCGPR, which must be submitted through the online FIRMS portal.
Form FCGPR: Due Date and Penalties
The Form FCGPR must be filed within 30 days of the allotment of shares to a foreign investor.
Failure to meet this deadline results in a penalty based on the investment amount and the duration of the delay:
- Initial Penalty: 1% of the total investment for each month of delay, with a minimum of ₹5,000.
- Extended Penalty: After six months of delay, the penalty doubles to 2% per month.
FDI Filing Process
The FDI filing process is handled entirely online through the RBI’s Foreign Investment Reporting and Management System (FIRMS).
1. Registration on FIRMS Portal
The first step is for the Indian company to register as an “Entity User” on the FIRMS portal. This creates a master record for the company and allows a designated “Business User” to access the portal and submit the forms.
2. Document Collection
The company must gather a specific set of documents for the filing, including:
- Foreign Inward Remittance Certificate (FIRC) from the bank.
- KYC of the foreign investor.
- A valuation report by a certified professional to justify the share price.
- A board resolution approving the share allotment.
- A certificate from a Company Secretary (CS) verifying compliance.
3. Filing and Submission
The designated Business User fills out Form FCGPR on the FIRMS portal, attaches the required documents, and submits the form electronically.
4. AD Bank Verification
The Authorized Dealer (AD) bank (the bank that received the foreign remittance) verifies the submitted information. Once approved, the bank forwards the filing to the RBI.
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The FDI reporting process can be complex and time-sensitive. FileMyFirm offers expert services to ensure your Form FCGPR is filed accurately and on time, helping you avoid costly penalties. We assist with everything from document preparation and portal registration to final submission and follow-up, ensuring full compliance with all RBI regulations.
Frequestly asked questions ( FAQ )
The primary purpose is to fulfill the mandatory reporting requirement under the Foreign Exchange Management Act (FEMA). Companies that receive foreign investment (inward remittance) and subsequently issue capital instruments (like equity shares or convertible notes) must officially report this transaction to the RBI to ensure compliance and proper regulatory tracking of foreign capital flow.
The mandatory form used for reporting the issue of capital instruments against foreign investment is Form FCGPR (Foreign Currency Gross Provisional Return).
The Form FCGPR must be filed within 30 days from the date of issue of the capital instruments (e.g., the date the shares were allotted).
Failure to file Form FCGPR within the 30-day deadline constitutes a contravention of FEMA regulations. The company must then apply to the RBI for compounding of the contravention, which involves paying a penalty calculated based on the investment amount and the duration of the delay.
FIRMS stands for the Foreign Investment Reporting and Management System. This is the official online portal where the company must register and submit Form FCGPR electronically.
The Form FCGPR filing requires a compliance certificate from a practicing Company Secretary (CS) or a Chartered Accountant (CA) to certify that the transaction adheres to all FEMA regulations.