FDI Reporting for allotment of Shares of the Company - Form FCGPR

And it is also expected to direct to the Regional Office of the Reserve Bank the information on the number of considerations in not more than 30 days of the date of allotment of the shares allotted by Indian Company as recipient of investment outside India and as an issuer of shares / convertible debentures or, preferences shares to Filth the FDI Scheme.

• Laws that govern it are under the Foreign Exchange Management Act (FEMA), 1999.

• Regulations and rules:

1. Rules (Non-Debt Instruments) made under the FEMA, 2019
2. Master Direction - Reporting under FEMA (arising under RBI)
3. The Department of Promotion of Industry and Internal Trade (DPIIT) issued the FDI Policy

Form FCGPR is that form of returns which is supposed to be submitted to the Reserve Bank of India on a possible foreign investment in any Indian company offering equity shares or any compulsorily convertible portion (CCPS, CCDs) to a foreign resident.

It is ex post facto reporting requirement and shall be furnished only after foreign investors have been allotted the share/securities.

Delay in reporting attracts penalties under FEMA.

The following should be in place prior to filling Form FCGPR:

• Indian Company is a company having entity user registrant named as Indian Company in FIRMS portal.

• Business user registration of authorised persons that files on behalf of business.

• FDI investment in the company balances of the bank.

• Distribution of the shares should be done through board resolution by the board of directors.

• Submission of PAS-3 to the Ministry of Corporate Affairs (MCA) on the issue of allotment of the shares.

• Valuation report of a Securities Exchange Board of India (SEBI) Registered Merchant Banker or a Chartered Accountant to the effect that the shares have been fairly valued by FEMA pricing guidelines.

• The KYC report of the remitting bank.

The documents indicated below (must be) uploaded on the FIRMS Portal:

• Allotment of shares- Board Resolution

• FIRC ( Foreign Inward Remittance Certificate ) is given by the bank.

• AD bank KYC report

• Valuation Certificate (ICAI registered Merchant Banker)

• The authorization of the Coming out statement

• Certificate of incorporation of foreign investor (where his/her is a corporation)

• MoA of the company

• Suitable governmental consents (in the event that they are needed, like FIPB or DPIIT approval)

• PAS-3 filled at MCA

• Post allotment polling of the company

• Login to FIRMS Portal: https://firms.rbi.org.in

• Click on Single Master Form -> FC-GPR

• Fill in:

1. Company details
2. Particulars of Foreign investor
3. Investment particulars
4. Price and value information
5. Pref and Post shareholding pattern

• Upload documents required

• Present to the Authorised Dealer (AD) Bank to be verified

• On the review of AD Bank, it is relayed to RBI where it is to be processed finally

• FEMA punishments:

1. 3 times as much money is involved in contravention
2. In the event that it is not quantifiable, punishment of up to 2,00,000 rupees

• Moreover, there is an imposition of a fine of upto 5000 Rs. per day in case of persisting violation

• Will affect later financing or international financing

• Proper communication with AD banks should be maintained since they help in confirming documents.

• Submit up-to-date formats of KYC and valuation reports.

• Forms may be necessitated to be uploaded using digital signatures (DSCs).

• RBI does not compromise on valuation standards and, you must make sure that there is no violation in the valuation process.

• Review industry sector specific limits and entry, (Auto entry vs government approval).