Process Involved In Filing Foreign Direct Investment

As the name indicates, Foreign Direct Investment stands for money transferred to India from foreign investors to have share holding in an Indian entity. Technically, ‘FDI’ means investing in the Capital of an Indian Company by non-resident entity/person outside India under schedule 1 of FEMA. Process required to allocate shares to foreign company is known as FDI reporting. Upon receipt of funds, before crediting funds into account, AD  (Authorized Dealers) bank will request for Share Capital Declaration Form by the letterhead of company. Step 1: - Obtain KYC of remitter, which will include following detailsFor Individual: -Passport No/SSN:Permanent Address detail updated with remitting bank Period of banking relationship Account no of remitterFor Companies/Non Individual: -Registered Name Registration No Registered Address Account NumberPeriod of relationshipKYC documents collected will be valid for a period of 1 year. Post which even if remittance is  initiated from same remitter, KYC needs to be re-done.Step 2: - Upon successful validation of KYC, AD will collect Share Capital Declaration Form (prescribed as per FEMA) before crediting funds into INR account.Step 3: - Initial Reporting /Submission of Intimation FormTimeline: - 30 Days from the date of credit of fundsDocuments to be submitted: -FDI Intimation Form Covering Letter Original FIRCStep 4: - Allotment of Shares Time Line:-180 Days from the date of credit of funds Indian Company will convene Board Meeting to allot shares to foreign equity investor.Step 5:- Submission of FC-GPR FormTimeline: 30 Days from the date of allotment of shareFollowing documents need to be submitted to bank (Authorized Dealer)Covering Letter Form FCGPR Original FIRC Certificate from Company Secretary Certificate from CA or Statutory Auditors indicating calculation of arrival of Share PriceKYC of foreign RemitterMOABoard Resolution approving FDI in India Copy of Letter of Intimation forwarded to RBIStep 6:- Submission MGT-14, Form GNL-2, & return of allotment in form PAS-3 to ROC.Any additional money received in India has to be repatriated to the remitter and it needs to be updated in FIRC as well.  In case, resident company doesn’t comply with the above rule of Filing FCGPR, RBI imposes a hefty penalty on non-compliance of regulations, commonly referred to as “compounding”.SaveDesk helps you to file all your all capital account transactions with RBI. In case you seek any help do reach out to us on www.savedesk.co.
Saurabh Jain
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Process Involved In Filing Foreign Direct Investment

Saurabh Jain
Blog
18th Aug, 2017
Process Involved In Filing Foreign Direct Investment

As the name indicates, Foreign Direct Investment stands for money transferred to India from foreign investors to have share holding in an Indian entity. Technically, ‘FDI’ means investing in the Capital of an Indian Company by non-resident entity/person outside India under schedule 1 of FEMA. Process required to allocate shares to foreign company is known as FDI reporting.

Upon receipt of funds, before crediting funds into account, AD  (Authorized Dealers) bank will request for Share Capital Declaration Form by the letterhead of company.

Step 1: - Obtain KYC of remitter, which will include following details

For Individual: -

  1. Passport No/SSN:

  2. Permanent Address detail updated with remitting bank

  3. Period of banking relationship

  4. Account no of remitter

For Companies/Non Individual: -

  1. Registered Name

  2. Registration No

  3. Registered Address

  4. Account Number

  5. Period of relationship

KYC documents collected will be valid for a period of 1 year. Post which even if remittance is  initiated from same remitter, KYC needs to be re-done.

Step 2: - Upon successful validation of KYC, AD will collect Share Capital 

Declaration Form (prescribed as per FEMA) before crediting funds into INR account.

Step 3: - Initial Reporting /Submission of Intimation Form

Timeline: - 30 Days from the date of credit of funds

Documents to be submitted: -

  1. FDI Intimation Form

  2. Covering Letter

  3. Original FIRC

Step 4: - Allotment of Shares

Time Line:-180 Days from the date of credit of funds

Indian Company will convene Board Meeting to allot shares to foreign equity investor.

Step 5:- Submission of FC-GPR Form

Timeline: 30 Days from the date of allotment of share

Following documents need to be submitted to bank (Authorized Dealer)

  1. Covering Letter

  2. Form FCGPR

  3. Original FIRC

  4. Certificate from Company Secretary

  5. Certificate from CA or Statutory Auditors indicating calculation of arrival of Share Price

  6. KYC of foreign Remitter

  7. MOA

  8. Board Resolution approving FDI in India

  9. Copy of Letter of Intimation forwarded to RBI

Step 6:-

Submission MGT-14, Form GNL-2, & return of allotment in form PAS-3 to ROC.

Any additional money received in India has to be repatriated to the remitter and it needs to be updated in FIRC as well.  In case, resident company doesn’t comply with the above rule of Filing FCGPR, RBI imposes a hefty penalty on non-compliance of regulations, commonly referred to as “compounding”.

SaveDesk helps you to file all your all capital account transactions with RBI. In case you seek any help do reach out to us on www.savedesk.co.

Saurabh
Blog Author

 

One of the Co-founders, Saurabh serves as an active advisor to several SaveDesk’s portfolio companies and also works closely with them to improve business performance, select key management personnel, ensuring statutory and financial oversight and compliance supported by various agreements.Prior to SaveDesk, Saurabh spent seven years with Standard Chartered Bank commercial banking team as an associate director, where he was responsible for client management,financial analysis, portfolio management and large ticket deal’s execution in South India. Saurabh holds an MBA in Marketing from the Institute of Technology Management, and graduated with Honors degree in Electrical and Electronics Engineering from RGPV, Madhya Pradesh

 

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