FDI Compliances under FEMA
For a country where capital is not readily available, Foreign Direct Investment (FDI) has been an important source of funds for companies. Under FDI, overseas money, either by an individual or entity, is invested in an Indian company.
In India, Foreign Direct Investment policy is regulated under the Foreign Exchange Management Act, 1999 governed by the Reserve Bank of India. According to Organization for Economic Co-operation and Development (OECD), an investment of 10% or above from overseas is considered as FDI.
FEMA has acted as an important source for the growth and development of various sectors in India. The main aim of FEMA is to facilitate external trade, balance payments, promote the orderly development, and maintain the foreign exchange market in India.
It is an electronic form issued by RBI under Foreign Exchange Management Act,1999. When the company receives the foreign investment and against such investment the company allots shares to such foreign investor then it is the duty of the company to file details of such allotment of shares with The RBI within 30 days and for that company has to use the form FC-GPR (Foreign Currency- Gross Provisional Return) for submitting details with RBI.
The Reserve Bank of India (the “RBI”), on September 1, 2018, released a user manual (the “SMF Manual”) to clearly set out the procedure for filing a single master form (the “SMF”), which it introduced on June 7, 2018, to integrate the existing reporting norms for foreign investment in India. Now different forms relating to the FDI in India are electronically filed through RBI’s FIRMS portal.
How can Startup Movers assist you in FDI Compliance?
- Preparation of Application for Filing FC_GPR to RBI within 30 days of Investment
- Preparation of Declaration to be obtained from Company
- Other documents to be submitted to RBI
- CS Certificate for certification form FC‐GPR
- Submitting Form FC‐GPR to RBI
- Follow up including department visit to take approval on Form FCGPR