Everything that you need to know about FC-GPR
Recently, the Reserve Bank has rolled out an online application, i.e., FIRMS (Foreign Investment Reporting and Management System). It provides the reporting of the form FC-GPR. FC-GPR stands for
Foreign Currency- Gross Provisional Return. To understand and learn more about this form, let’s dive into the filing procedure, the basic provisions, the
FC-GPR checklist and the FAQs relating to FC-GPR.
What is FC-GPR?
When an enterprise obtains FDI (Foreign Direct Investment) through capital investment, the entity allots shares to a foreign investor. This transaction must be reported, which needs to be done in the FC-GPR Form issued by the RBI. FC-GPR is applied when aentity receives foreign investment, and against such investment, the entity allots shares to the foreign investors. If the same happens, then the entity should file details of such
allotment of shares with the Reserve Bank of India within 30 days under the RBI compliances for FDI.
Here, the entity means the following:
1. A company within the meaning of section 1(4) of the Companies Act, 2013.
2. A Limited Liability Partnership (LLP) registered under the Limited Liability Partnership Act, 2008.
3. A startup which complies with the conditions laid down in Notification No. G.S.R 180(E) dated February 17, 2016 issued by the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, Government of India
FDI Entry Routes:
Foreign Direct Investments under different sectors is permitted either through the Automatic route or government route. Under automatic route, the non-residents or Indian companies do not require any approval from the government of India.
On the other hand, approval from the government is required before investment under the government route. The respective Administrative Ministry/Department considers proposals for investment under the Government route.
When do we need to file Form FC-GPR?
The
Filing Form FC-GPR is needed in following cases:
* In case of incorporation, if the shareholder is a non-resident, this form needs to be filed as it is a mandatory
RBI compliance for the issue of shares to a non-resident.
* When the share application money is obtained and shares are to be allotted within 60 days from the date of receipt, the FC-GPR form should be filed within 30 days.
What are the legal provisions?
* The
RBI compliance for foreign investment is subject to consolidated FDI policy that relates to whether the entry is through approval or automatic route, sectoral caps, pricing, guidelines, and more.
* The securities issues are in adherence with the provisions of the SEBI regulations, Foreign Exchange Management Act, and other applicable laws and rules under the umbrella of it.
Which securities are covered under its purview?
The following securities are covered under this form's purview-
* Equity shares
* Convertible preference shares
*Convertible debentures
What are the steps for filing FC-GPR Form?
* The business owner needs to register
* They must log into the FIRMS
* They must log in to SMF
* They should select the return type
* The common investment details like the date of the issue of shares, shareholding pattern, etc. need to be filled
* The issue details must be accounted for
* Foreign investment details should be enlisted
* The next step is filing the total amount of inflow and the total amount for which the capital instruments have been issued
* The particulars of the issue should be valued and attached
* All the details should be filed correctly, so the shareholding pattern is auto-populated
* Once all the details are filed, save and submit the form.
What are the attachments required for Form FC-GPR?
If you are up for
FC-GPR Form filing with RBI, then the following are the list of documents that you will need to submit along with the form:
* Copy of KYC
* Copy of
FIRC Certificate
* Declaration by the verified representative of the Indian Company
* CS certificate according to the format specified by the RBI user manual
* Pricing guidelines declaration
* Declaration for conversion of CCPS
* Copy of FIPB approval
* Valuation Report by Chartered Accountant / Merchant Banker that indicates the manner of the arriving at the price of the capital instruments
* Board Resolution for the allotment of securities in addition to the list of allottees.
Foreign Liabilities and Assets (FLA)
All the Indian companies who have received foreign Direct Investment and/ or made Foreign Direct Investment abroad in previous year, including the current year, should file the annual return every year by July 15th of Foreign Liabilities and Assets (FLA) in the soft copy, which is to be duly filled-in, validated and sent via email to the Reserve Bank.
To improve the data quality and enhance the security level in data submission, the present email-based reporting system for submitting the FLA return will be replaced by a web-based system online reporting portal.
The main features of the revised FLAIR (Foreign Liabilities and Assets Information Reporting) system are:
1: Reserve Bank would provide a web-portal interface
https://flair.rbi.org.in to the reporting entities to submit the “User Registration Form”, which shall include entity identification and business user details AIFs and LLPs will no longer require to use dummy CIN. The successful registration on web-portal will allow users to generate RBI-provided login-name and password for using the FLA submission gateway and also include system-driven validation checks on the data submitted.
2: The form will then seek investor-wise direct investment and other financial details on a fiscal year basis. All reporting entities must provide information on FATS-related variables (it was mandatory only for subsidiary companies earlier). In addition, the revised form seeks information on the first year of receipt of disinvestment and FDI/ODI.
3: Upon successfully submitting the form, the reporting entities will get a system-generated acknowledgement receipt.
4: If required, they can revise the data and view/download the information submitted.
5: Entities can submit FLA information for earlier year/s after receiving RBI confirmation on their request email.
6:The existing means of email-based submission of FLA forms will be discontinued.
Many of us are ignorant of the RBI compliances for FDI under the RBI when issuing securities to a non-resident. If one fails to comply with these rules and the filing gets delayed, heavy penalties get attracted. This process of reporting the issue of securities to non-residents is a bit complex; however, the RBI issues user manuals from time to time to guide the users step by step and simplify the filing procedure.
If you are seeking FCRA Registration in Delhi or assistance in complying with the RBI reporting requirements, don't hesitate to contact us at
info@manishanilgupta.com.
