FC-GPR filing: reporting foreign investment to the RBI

Shares held through another company or a trust? See BEN-2 and the significant beneficial owner rules.

The Indian company files it, not the investor. It applies whenever equity instruments are issued to a person resident outside India and the issue counts as foreign direct investment:

• a foreign parent subscribing to shares of its Indian subsidiary, including the first shares taken at incorporation;
• a foreign investor or fund taking shares in a funding round;
• an NRI investing on a repatriable basis.

Equity instruments here mean equity shares, and preference shares, debentures and warrants that must convert into equity. A transfer of existing shares between a resident and a non-resident is reported in a different form, FC-TRS.

The two clocks are separate. A company that receives money on 1 April and allots shares on 20 May has until 19 June to file FC-GPR.

An unlisted company cannot issue shares to a non-resident below fair value. The value is certified by a chartered accountant, a SEBI-registered merchant banker or a practising cost accountant, using an internationally accepted pricing method. Shares taken by a foreign subscriber to the memorandum at incorporation can be issued at face value.

Get the valuation dated before the allotment. A certificate dated afterwards is the most common reason banks send the form back.

1. Register the company in the Entity Master on FIRMS, with its foreign investment details.
2. Register a Business User: the person who will file, authorised by the company and approved by the bank.
3. Open the Single Master Form and choose FC-GPR.
4. Enter the details: the investor, the amount received, the number and price of the shares, and the shareholding after the issue.
5. Attach the documents and submit.
6. The authorised dealer bank checks the form and approves it, or returns it with queries.

• The inward remittance certificate (FIRC) and the KYC report on the foreign investor, from the bank that received the money.
• The valuation certificate.
• The board resolution allotting the shares, and the list of allottees.
• A declaration by the authorised signatory of the company.
• A certificate from a company secretary that the Companies Act and the FEMA conditions have been met.
• The memorandum of association, for shares taken at incorporation.

Banks differ on formats. Ask your bank for its checklist before the allotment, not after.

A delayed FC-GPR can be regularised by paying the Late Submission Fee (LSF) set by the RBI in September 2022:

LSF = ₹7,500 + (0.025% × A × n)

A is the amount involved in the delayed report. n is the delay in years, rounded up to the nearest month and taken to two decimal places.

• The fee is charged per return.
• It cannot exceed 100% of the amount involved.
• Once the RBI sends the payment advice, the fee must be paid within 30 days, or the advice lapses.
• The LSF route is open for three years from the due date. After that the delay is dealt with under the penal provisions of FEMA, which in practice means a compounding application to the RBI.

A late FLA return carries a flat LSF of ₹7,500.

• FLA return every year by 15 July.
• Transfer pricing: every transaction with the foreign shareholder’s group must be at arm’s length, with a report in Form 3CEB. See who counts as an associated enterprise.
• FC-TRS if shares later move between a resident and a non-resident.

We file FC-GPR as part of Indian subsidiary registration, and for existing companies after a funding round.