FEMA advisory and RBI reporting

What this covers

Keeping cross-border transactions inside the exchange control framework and reporting them to the Reserve Bank of India in time: Form FC-GPR on an issue of shares, Form FC-TRS on a transfer between a resident and a non-resident, the LLP forms on contribution and disinvestment, Form DI on a downstream investment, the annual return on Foreign Liabilities and Assets, the overseas investment filings, and the external commercial borrowing registration with the monthly ECB-2 return. It also covers regularising late filings, by late submission fee or by compounding.

Statutory basis

The Foreign Exchange Management Act, 1999. Investment into India is governed by the FEMA (Non-debt Instruments) Rules, 2019 with the Mode of Payment and Reporting Regulations, 2019; borrowing by the Master Direction on External Commercial Borrowings, Trade Credits and Structured Obligations; investment abroad by the FEMA (Overseas Investment) Rules and Regulations, 2022 with the Overseas Investment Directions, 2022. Reporting is consolidated in the Master Direction on Reporting under FEMA and filed on the Single Master Form of the Reserve Bank's FIRMS portal. Contravention is dealt with under section 13 of the Act, and compounding under the rules made under it.

Who it applies to

Any Indian company or limited liability partnership that has received foreign investment, in the year of receipt and every year afterwards; any party to a transfer of shares across the border; any Indian party with an investment abroad; any borrower of an external commercial borrowing; and every Indian entity carrying foreign assets or liabilities on its balance sheet — which is what makes the Foreign Liabilities and Assets return due even in a year with no fresh investment.

What we do

1. 1Register the entity master and business user on the FIRMS portal, keep the authorised person current, and map every cross-border transaction to the return and date it attracts — the trigger is the transaction, not the accounting entry, and the two often fall in different months.
2. 2File Form FC-GPR within thirty days of allotment with the company secretary's certificate, the valuation certificate, the inward remittance certificate and know-your-customer report from the bank, and the declaration of compliance with the Non-debt Instruments Rules.
3. 3On a transfer between a resident and a non-resident, establish who must file and lodge Form FC-TRS within sixty days, with pricing support showing the transfer was not below fair value where a non-resident sold, or above it where one bought.
4. 4For investment abroad, remit through the authorised dealer bank under the Overseas Investment Rules, obtain the unique identification number for the overseas entity, keep the financial commitment within the prescribed limit, and file the annual performance report from its audited accounts.
5. 5For an external commercial borrowing, test the eligibility of borrower and lender, the permitted end-use, and the minimum average maturity and all-in-cost ceiling the Master Direction prescribes; obtain the loan registration number before drawdown, and file ECB-2 monthly.
6. 6File the Foreign Liabilities and Assets return by 15 July, on unaudited figures if the accounts are not yet audited; and where a filing is late, quantify the fee and pay it, or prepare a compounding application where the contravention cannot be cured that way.

What you receive

Reporting calendar

Every FEMA return the entity attracts, with its trigger, date and form.

Filings

Each return filed, with the acknowledgement and reference number retained.

Supporting file

Valuation, bank certificates and resolutions assembled per transaction.

Delay assessment

What is late, what the fee comes to, and what needs compounding.

Compounding support

The application, the facts, and attendance before the Reserve Bank.

Documents and information required

Entity master details and business-user authorisation for the FIRMS portal · resolutions for the issue or transfer · inward remittance certificate and know-your-customer report from the bank · valuation certificate · share certificates and register of members · transfer agreement, consents and proof of consideration · audited financial statements, and unaudited figures where the return falls due first · overseas entity's audited accounts · loan agreement and repayment schedule · earlier acknowledgements and identification numbers.

Key dates

Form FC-GPR within thirty days of allotment; Form FC-TRS within sixty days of the consideration moving; the LLP contribution form within thirty days of receipt; Form DI within thirty days of allotment of a downstream investment. Equity instruments must be issued within sixty days of the money arriving, or refunded within fifteen days. ECB-2 is due by the seventh of the following month until the loan is repaid. The Foreign Liabilities and Assets return is due by 15 July, with revision by 30 September once audited figures exist, and the annual performance report by 31 December. The late submission fee runs by the period of delay.