PROCEDURE FOR REPORTING OF FOREIGN INVESTMENT TO RBI

PROCEDURE FOR REPORTING OF FOREIGN INVESTMENT TO RBI THROUGH AUTHORIZED DEALER. Every Indian Company that receives FDI (Foreign Direct Investment) needs to report such FDI inflow to Reserve bank of India. Therefore this is my attempt to clarify the procedure regarding report of FDI to RBI. Inward Remittance and Obtain FIRC. 1. Receipt of foreign currency through VOSTRO ACCOUNT in company bank account (In USD) from overseas investor. Note: Its depend upon the bank to bank what procedure they will adopt to credit respective amount on company account. 2. Upon receipt of amount, Bank would ask for purpose of Remittance, Kindly inform the purpose to bank TOWARD SHARE CAPITAL. 3. Bank wills Issue FIRC, Check the purpose and amount on the FIRC. Know Your Customer (KYC) process: 1. Request the investors to obtain KYC from their bankers in the attached format and send it to Indian Bank. 2. Based on this overseas bank KYC, the Companys bank will issue KYC for the overseas investor. Reporting of Inward Remittance to RBI : 1. Within 30 days from the receipt of Inward remittance, The Company has to inform RBI through Companys Bank (AD Category I Bank) by submitting Annex 6 along with copy of KYC & FIRC / Debit Certificate. 2. The Companys banker (AD Category I bank) will certify Annex 6 after due verification and forward it to RBI 3. Upon receipt of intimation in Annex 6, RBI will allot and communicate the Unique Identification Number (UIN) for each such inward remittance or FCNR / NRE / NRO account debit. Allotment of Shares & filing of FC-GPR : 1. within 180 days from the receipt of the money from overseas or, the Company has to allot shares to the overseas investors (Share price should be more than the price as arrived under Discounted Cash Flow method) 2. If any excess fund remains after allotment, the un allotted sum should be remitted back to the overseas investor within 180 days from the date of receipt. 3. Prepare Form FC-GPR (Refer Annex 8 of Master Circular on Foreign Investment in India 2013 for Format of FC-GPR as amended from time to time) 4. Get a SEBI registered Merchant Banker / Chartered Accountant certificate for the share valuation (indicating the manner of arriving at the price of the shares issued to the persons resident outside India) 5. Get a Company Secretary certificate for the compliance in the format specified in the Form FC-GPR 6. File Form FC-GPR with RBI through Companys Bank (AD Category I Bank) within 30 days from the date of allotment. 7. Attachments required to file with Form FC-GPR, a. Report obtain from Chartered Accountant including Certificate. b. Company Secretary Certificate c. UIN copy of all inward remittances for which shares are allotted. If UIN is applied for and yet to be received from RBI, attach copy of the UIN application filed with RBI through AD Category I bank d. Copy of FIRCs received for all inward remittances for which shares are allotted e. Copy of PAS-3 filed with ROC as a proof of allotment f. The Companys banker (AD Category I bank) will certify Form FC-GPR after due verification and forward it to RBI 8. RBI after due verification of FC-GPR will allot a FC-GPR registration number and communicate to the Company. This FC-GPR registration number is final approval of RBI for the Foreign investment. For any future repatriation of share sale proceeds, the FC-GPR registration number to be quoted. IMP NOTE: Please note that all the Compliance related to RBI is now through electronic mode only. Create your account of E-Biz, Fill the form and send hard copy to AD, after verify the form, AD will forwarded to RBI. Once the form forwarded to RBI, RBI will give application number for all future correspondence or to track the status of transaction. File Annual return on Foreign Liabilities and Assets (FLA) Required to be submitted by all the India resident companies which have received FDI and/ or made overseas investment in any of the previous year(s), including current year by July 15 every year. Sources : RBI.ORG.In/FAQ News letter Author CS Lily Bali ,ACS is a Company Secretary from Delhi/NCR and can be contacted at [email protected], Contact Number : 9711772751