Foreign Direct Investment in Indian Companies and the Form FC-GPR

What are the entry routes for foreign investment in India?

Foreign Direct Investments (FDI) can be made under two routes—Automatic Route and Government Route.

Under the Automatic Route, the foreign investor or the Indian company does not require any approval from the Reserve Bank of India (RBI) or the Government of India.

Under the Government Route, prior approval of the Government of India, Ministry of Finance, Foreign Investment Promotion Board (FIPB) is required.

Who is eligible to invest in India ?

A person resident outside India (other than a citizen of Pakistan or Bangladesh) or an entity incorporated outside India, (other than an entity incorporated in Pakistan or Bangladesh) can invest in India, subject to the FDI Policy of the Government of India. An Indian company receiving investment from outside India for issuing shares / convertible debentures/ preference shares under the FDI Scheme, should report the details of the inflow to the Reserve Bank within 30 days from the date of receipt.

What is Form FC-GPR?

The Indian company receiving foreign direct investment by way of issue of securities to a foreign investor should report the details pertaining to such issue by filing Form FC-GPR with the RBI. FC-GPR stands for Foreign Currency Gross Provisional Return and is a mandatory compliance under the Foreign Exchange Management Act 1999.

What are the details to be reported/ documents to be uploaded in Form FC- GPR?

• Name and address of the foreign investor/s

• Date of receipt of funds in foreign currency and its rupee equivalent

• Name and address of the Authorised Dealer through whom the funds have been received

• Details of Government approval for the investment, if any

• Foreign Inward Remittance Certificate (FIRC) issued by the bank

• Six pointer KYC form in the prescribed format

• Company Secretary Certificate in the prescribed format

• Valuation certificate issued by the person authorized as per FEMA 20 (R). A valuation certificate is mandatory where nature of issues is “Preferential Allotment/Private Placement/Private arrangement” and “Conversion of Convertible Notes”.

What is the due date for submission of form FC-GPR?

Form FC GPR should be filed within 30 days from the date of issue of shares.

What is the time allotment for allotment of shares under the Indian Companies Act, 2013?

• In case of further issue of shares – shares are required to be allotted within 60 days from the date of receipt of the application money

• In case of first issue of shares for a newly incorporated company – subscribers are mandatorily required to bring in subscription money within 180 days from the date of incorporation and the directors are required to file a declaration to this effect with the Registrar.

What is the time allotment for allotment of shares under the Indian FEMA, 1999?

Para 2.2 of Schedule 1 of FEMA-20(R) / 2017-RB dated November 07, 2017. Capital instruments shall be issued to the person resident outside India making such investment within 60 days from the date of receipt of the consideration.

What are the penalties for non-compliance?

Please refer “Master Direction- Compounding of Contraventions under FEMA, 1999” as amended from time to time.

What is the process of filing Form FC-GPR?

Filing Form FC-GPR is a two-pronged process so for the sake of clarity lets split it into two parts. To start with, one has to register on RBI’S FIRMS website as a Business User (BU) by performing the below steps:

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Part 1 - Registration for Business User 

Step 1. Go to the FIRMS website at https://firms.rbi.org.in 

Step 2 : At the Login box, click on Registration form for New Business User. 

Step 3 : Fill up the details in the popped up registration form for BU as below

Step-4 : Click Submit button. In case any error is displayed, rectify the same and click Submit  button. 

Step 5: A Message “Record Saved Successfully” is displayed at the top of Login box. 

After BU submits the registration form, the same will have to be verified by the AD Bank Branch  concerned. The approval/ rejection of the same would be communicated through email notification to the  BU. 

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Part 2 - Filing of FC-GPR 

Step 1: Go to the FIRMS website at https://firms.rbi.org.in . Enter User Name and password  as provided via email notification after performing the steps outlined in Part 1 above. Enter  captcha and click submit. Change the password and login again using the new password. In  your workspace, Click on the left burger menu, click “File Return” button and select “Single  Master Form”.

Step 2 : Click on the drop down menu “Return Type”. Select “Form FC-GPR” and then click on “Add  New Return” in the right corner. The user will be taken to form FC-GPR.

The complete form is arranged into two parts, Common Investment details and “Form FC-GPR”  which is further arranged into 5 tabs.  (Common Investment details: These details are common to all returns that can be reported in  SMF.)

Step 3: Fill up the common investment details such as: Details of received FDI-entry Route and Applicable Sectoral Cap.

Step 4 : Fill up the details in form FC-GPR as below :
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Step 4.1: Tab 1: Issue details

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Step 4.2: Tab 2 : Foreign investors details

Tip : Please select the “Nature of issue” in tab 1, before entering the investor details. The investor details are erased in case “nature of issue” selected after.

Step 4.3 : Tab 3-Amount of Issue
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Step 4.4: Tab 4-Particulars of Issue
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Step 4.5: Tab 5-Shareholding Pattern

Step 5.6: After filling in all details, click on Save and Submit for submitting the form. 

“Save as draft” feature: The Business User can also save the draft and submit later, by filling in  all mandatory details in the “Common details” page. 

“Reset” feature : This will reset the complete form. 

“Back” button: To go back to the Dashboard. 

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