FC-GPR & RBI Compliance

Foreign investment into an Indian company is governed by the Foreign Exchange Management Act (FEMA) and regulated by the Reserve Bank of India. Each step, from receiving the money to issuing shares and transferring them later, has a report and a deadline. FC-GPR is the most important of these. Small delays or errors lead to late submission fees, compounding before the RBI and awkward questions in the next funding round. We handle foreign investment reporting from before the money arrives to the annual returns that follow.

FC-GPR and FEMA compliance

FC-GPR is the report an Indian company files when it issues equity shares or compulsorily convertible instruments to a person resident outside India. It is filed on the RBI's FIRMS portal through the company's bank, within 30 days of the issue, and is how the RBI records foreign capital coming into the company.

It is one part of wider FEMA compliance, which also covers:

• sectoral caps and the automatic or government approval route;
• pricing guidelines and valuation for issues and transfers;
• transfers of shares between residents and non-residents;
• annual reporting of foreign liabilities and assets;
• downstream investment by companies with foreign investment.

When FC-GPR is required

• Equity shares issued to foreign investors or NRIs on a repatriable basis
• Compulsorily convertible debentures (CCDs) and preference shares (CCPS)
• Conversion of convertible instruments, ECBs or other amounts into equity
• Shares issued in a share swap
• Rights and bonus issues to foreign shareholders

The share subscription must be allotted within 60 days of receiving the money, or refunded within the following 15 days, and FC-GPR filed within 30 days of allotment.

Why it matters

Late or missed filings lead to:

• late submission fees, or compounding of the contravention by the RBI;
• delays in the next funding round, since investors' due diligence checks every past filing;
• less confidence from foreign investors;
• closer scrutiny of the company's foreign investment.

Documents for FC-GPR

• Board and shareholder resolutions
• FIRC and the KYC report on the foreign investor from the remitting bank
• Valuation certificate showing the issue price is not below fair value
• Company secretary's declaration of compliance
• Allotment details and statutory registers

FEMA compliance we handle

1. Before the investment: sector caps, entry route, instrument and pricing, so the structure works before money is received.
2. FC-GPR: documents, valuation, filing and follow-up until acknowledged.
3. FC-TRS: reporting transfers of shares between residents and non-residents, within 60 days of the transfer or receipt of payment.
4. FLA return: the annual return on foreign liabilities and assets, due by 15 July each year.
5. Downstream investment: reporting in Form DI within 30 days when a company with foreign investment invests in another Indian company.
6. Compounding and late submission: regularising late or missed filings through late submission fees or compounding applications to the RBI.
7. ODI and ECB: reporting for Indian companies investing abroad or borrowing from abroad, where relevant.

The FC-GPR process

1. Review the transaction: type of investment, instrument, sector and route.
2. Documents and valuation: prepare and check every document, including the valuation report.
3. FIRMS registration: register the company's business user on the FIRMS portal, if not already done.
4. File FC-GPR: within 30 days of allotment, with all details matching the bank's records.
5. Follow up: respond to the bank's or RBI's queries until the filing is approved.

Who this is for

• Startups receiving foreign funding
• Companies issuing shares to NRIs or foreign companies
• Businesses in a funding round
• Joint ventures with overseas partners
• Indian subsidiaries of foreign companies

Common questions

What happens if FC-GPR is filed late?

It can be filed with a late submission fee calculated on the amount and the delay, up to a limit of time after which compounding is needed.

Do NRI investments need FC-GPR?

Yes, where shares are issued to NRIs on a repatriable basis. Investments on a non-repatriation basis are treated like domestic investment.

Does every company with foreign investment file the FLA return?

Yes, every Indian company and LLP that has received foreign investment or made investment abroad, including in the year of first receipt.