What Is FC-GPR? A Guide to Reporting Foreign Investments in India

Are you a company that has received foreign investment in India? If so, it's crucial to understand your reporting obligations under the Foreign Exchange Management Act (FEMA), 1999. One of these obligations is filing the FC-GPR (Foreign Currency-Gross Provisional Return) form with the Reserve Bank of India (RBI). In this comprehensive guide, we'll explain what FC-GPR is, who needs to file it, and the filing process. By the end, you'll have a clear understanding of how to comply with this important requirement and avoid potential penalties.

Understanding FC-GPR

Let's start by clarifying what FC-GPR is and why it's important.

FC-GPR is a form prescribed by the RBI for reporting foreign investment in Indian companies. It captures the details of the foreign investment, including the amount, source, and type of investment (equity, preference shares, etc.). The purpose of FC-GPR is to enable the RBI to monitor foreign investment flows into India and ensure compliance with FEMA regulations.

Under FEMA, foreign investment in India is regulated by the RBI and the Central Government. The FC-GPR filing is a key component of this regulatory framework, providing transparency and accountability in the foreign investment process.

Who Needs to File FC-GPR?

Any Indian company that receives foreign investment and meets the following criteria must file FC-GPR:

1. Receipt of Foreign Investment: The company should have received foreign investment in the form of equity shares, compulsorily convertible preference shares, compulsorily convertible debentures, or any other instrument as per the Foreign Direct Investment (FDI) policy.

2. Allotment of Shares: The company should have allotted shares or convertible instruments to the foreign investor pursuant to the foreign investment.

3. Threshold Limit: There is no minimum threshold for filing FC-GPR. Any amount of foreign investment, however small, triggers the filing requirement.

   
   

If your company meets these criteria, you are required to file FC-GPR within the prescribed timelines.

Timeline for Filing FC-GPR

The timeline for filing FC-GPR depends on the mode of payment for the foreign investment:

1. Inward Remittance: If the foreign investment is received through inward remittance (i.e., funds remitted from abroad), FC-GPR must be filed within 30 days from the date of allotment of shares or convertible instruments.

2. Debit to NRE/FCNR Account: If the foreign investment is received by debit to the Non-Resident External (NRE) or Foreign Currency Non-Resident (FCNR) account of the investor, FC-GPR must be filed within 30 days from the date of allotment of shares or convertible instruments.

3. Other Modes: For other modes of payment (e.g., conversion of royalty, lump-sum fee, etc.), FC-GPR must be filed within 60 days from the date of allotment of shares or convertible instruments.

   
   

It's important to adhere to these timelines to avoid potential penalties and regulatory actions.

How to File FC-GPR?

The filing process for FC-GPR involves the following steps:

1. Obtain Digital Signature Certificate (DSC): FC-GPR must be filed online through the Foreign Investment Reporting and Management System (FIRMS) portal of the RBI. To access this portal, the authorized signatory of the company must obtain a Class 2 or Class 3 Digital Signature Certificate (DSC) from a certified DSC provider.

   
   

2. Register on FIRMS Portal: The company must register on the FIRMS portal using the authorized signatory's DSC. This is a one-time registration process.

   
   

3. Fill in FC-GPR Details: After logging in to the FIRMS portal, click on the "FC-GPR" tab and fill in the required details. The form requires information such as the company's details, foreign investor's details, details of the foreign investment (amount, instrument, etc.), and the allotment of shares or convertible instruments.

   
   

4. Attach Supporting Documents: The following documents must be attached with the FC-GPR form:

   
   

   • Board resolution for allotment of shares or convertible instruments

   • Valuation certificate from a Chartered Accountant (for issue of shares other than rights issue)

   • Foreign Inward Remittance Certificate (FIRC) or debit advise for NRE/FCNR account

   • Know Your Customer (KYC) documents of the foreign investor

     
     

   Ensure that these documents are in PDF format and do not exceed 5 MB in size.

   
   

5. Certify and Submit: After filling in all the details and attaching the necessary documents, the authorized signatory must digitally sign and certify the form. Then, click on the "Submit" button to file the form.

   
   

6. Acknowledgment and Tracking: Upon successful submission, an acknowledgment number will be generated. This number can be used to track the status of the FC-GPR filing on the FIRMS portal.

   
   

Consequences of Non-Compliance

Failure to file FC-GPR or delayed filing can attract penalties under FEMA. The RBI may levy a penalty of up to INR 1,000 per day for each day of default, subject to a maximum of INR 1,00,000. In case of continued non-compliance, the company may face further regulatory action, including restrictions on future foreign investment.

Moreover, non-compliance with FEMA regulations can also have other consequences, such as difficulties in repatriation of funds, obtaining regulatory approvals, and accessing banking services.

Therefore, it's crucial to take FC-GPR filing seriously and ensure timely compliance.

How Fiscal Flow Can Help

Navigating the foreign investment reporting requirements, including filing FC-GPR, can be complex and time-consuming. This is where Fiscal Flow, a leading compliance and advisory firm in India, can help.

Our team of experienced professionals can assist you with the following:

1. Assessing Reporting Obligations: We can help you determine whether your company is required to file FC-GPR based on the nature and amount of foreign investment received.

2. Preparing and Filing FC-GPR: Our experts can assist you in preparing the FC-GPR form accurately and completely. We can also handle the filing process on your behalf, ensuring timely submission.

3. Liaison with RBI: In case of any queries or clarifications from the RBI regarding your FC-GPR filing, we can liaise with the authorities and provide the necessary responses.

4. Advisory Services: Our team can provide advisory services on foreign investment regulations, FEMA compliance, and related matters to help you navigate the complex regulatory landscape.

   
   

By partnering with Fiscal Flow, you can ensure compliance with FEMA regulations while focusing on your core business activities.

Conclusion

FC-GPR is a critical compliance requirement for Indian companies that receive foreign investment. By understanding the filing process and consequences of non-compliance, you can avoid potential penalties and regulatory issues.

At the same time, it's important to stay updated with the latest changes in foreign investment regulations and seek professional guidance when needed.

If you need assistance with FC-GPR filing or advisory services on foreign investment compliance, Fiscal Flow is here to help. Our team of experts can guide you through the compliance process and help you ensure seamless reporting of foreign investments.

Remember, timely compliance with FEMA regulations not only helps you avoid penalties but also facilitates smooth business operations and investor relations.