Mandatory Filing for FDI: FC-GPR is essential for companies receiving foreign investments and issuing shares to ensure regulatory compliance.Foreign investment is a crucial aspect of business growth, especially in a globally connected economy like India. Companies receiving foreign direct investment (FDI) are required to adhere to specific regulatory requirements to ensure transparency and compliance with Reserve Bank of India (RBI) guidelines. One of the key filings in this process is the FC-GPR (Foreign Currency-Gross Provisional Return). Here’s an overview of FC-GPR and RBI compliance requirements.
What is FC-GPR?
The FC-GPR is a mandatory filing with the RBI whenever a company receives foreign direct investment and allots shares to foreign investors. It serves as a declaration of the investment and is submitted via the FIRMS (Foreign Investment Reporting and Management System) portal.
Key Points:
- Applicable for equity shares, compulsorily convertible preference shares (CCPS), and compulsorily convertible debentures (CCD) issued to foreign investors.
- Filed under the provisions of the Foreign Exchange Management Act (FEMA), 1999.
- Ensures compliance with FDI policies set by the Government of India and the RBI.
Steps for Filing FC-GPR
- Obtain Business User Registration:
- Register on the FIRMS portal as a business user to access the FC-GPR filing system.
- Valuation of Shares:
- Conduct a valuation of shares by a SEBI-registered Category-I Merchant Banker or a Chartered Accountant as per internationally accepted pricing methodologies.
- Issue of Shares:
- After receiving the FDI, allot shares to the foreign investors within 60 days.
- Filing of FC-GPR:
- Log in to the FIRMS portal.
- Fill in the necessary details, including investment amount, shareholding pattern, and valuation certificate.
- Upload required documents such as the Board Resolution, FIRC (Foreign Inward Remittance Certificate), and KYC documents of the foreign investor.
- Submit Within Deadline:
- FC-GPR must be filed within 30 days of the issuance of shares to the foreign investors.
Documents Required for FC-GPR Filing
- Board Resolution approving the allotment of shares.
- Valuation Report from a Merchant Banker or Chartered Accountant.
- FIRC (Foreign Inward Remittance Certificate) from the AD bank.
- KYC Documents of the foreign investor from the remitting bank.
- Certificate of Incorporation of the company.
- MOA and AOA of the company.
RBI Compliance for FDI
Apart from FC-GPR filing, companies receiving FDI must adhere to the following compliance requirements:
1. Annual Return on Foreign Liabilities and Assets (FLA):
- Mandatory for all companies that have received FDI or made overseas investments.
- Filed annually by July 15 of every year.
2. FC-TRS Filing:
- Required when there is a transfer of shares between a resident and a non-resident.
- Must be filed within 60 days of the transfer.
3. ECB Compliance:
- If the company has raised External Commercial Borrowings (ECB), it must comply with RBI guidelines, including monthly ECB-2 returns.
4. ODI Compliance:
- For outbound investments, companies must comply with Overseas Direct Investment (ODI) reporting requirements.
5. Sectoral Cap Adherence:
- Ensure that the FDI received is within the sectoral caps specified by the RBI.
Importance of RBI Compliance
Non-compliance with RBI regulations can result in penalties, delays in operations, and reputational risks for businesses. Timely filings and adherence to guidelines ensure:
- Transparency in foreign investments.
- Smooth repatriation of profits and dividends.
- Credibility with regulatory authorities.
Why Choose Professional Assistance?
Handling FC-GPR filings and RBI compliance can be a complex and time-sensitive process. Engaging professional services can:
- Ensure accurate filings without delays.
- Provide guidance on valuation and sectoral compliance.
- Assist in managing all RBI-related reporting requirements efficiently.
