Welcome to this article aimed at simplifying the process of filing the FC-GPR form for Foreign Direct Investment (FDI) in India. The FC-GPR form is necessary when receiving FDI from non-resident investors, whether through the “Automatic Route” or “With the approval of the Government.” This article will focus on the steps and procedures related to FDI rather than the eligibility norms and guidelines prescribed under the FEMA Act.
Let me take you through all this step by step-
ISSUE OF ‘FIRC’ & ‘KYC OF INVESTOR’ BY AUTHORIZED DEALER:
After receiving funds from the non-resident investor, the authorized dealer of the Indian entity will issue the “Certificate of Foreign Inward Remittance” and the “Know Your Customer Form in respect of the Non-resident Investor.” These documents are essential for filing the FC-GPR Form.
REGISTRATION OF ENTITY USER
Meaning of Entity-
The term “Entity” refers to a company within the meaning of section 1(4) of Companies Act, 2013, a Limited Liability Partnership (LLP) registered under the Limited Liability Partnership Act, 2008, or a startup complying with specific conditions mentioned in the Notification No. G.S.R 180(E) dated February 17, 2016 issued by the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India.
An “Entity User” is the authorized person responsible for reporting foreign investment details of an Entity. The registration process requires providing necessary details such as the name of the authorized person, creating a username, email ID, PAN of the authorized person, mobile number, entity name, entity type, CIN/LLPIN, regional office selection, and registered address of the entity.
For Registration- Go to the website
Select registration form – For New Entity User
Fill the required details like–
(Name of the Authorized person of the Entity, Create User name, fill mail id, Pan of authorized person, Mobile no, fill Entity Name, select Entity type and fill CIN/LLPIN,Select regional Office and Fill Registered address of the Entity)
Authority Letter submitted by the entity user will be verified by RBI and after RBI’s approval, the user will receive the password on their registered email ID from RBI email ID firstname.lastname@example.org.
After getting this mail, login to the main screen using the credentials provided in the mail and then change the password.
CREATION OF ENTITY MASTER
After logging, following screen appears
Click on the drop down arrow, then this screen appears
Click on Add button, Entity details will be displayed like this
CREATION OF ENTITY DETAILS
Then , go to the next Tab “ Particulars” which appears as
At the bottom, there is tab of business details which is as below
Be careful, while selecting the category “Greenfield” or “Brownfield”
Greenfield Investment– Greenfield investment is investment in new plants. It is establishing new production capacity by an investor or company, Greenfield FDI in India is investment by a foreign investor in fresh production facilities.
Brownfield Investment-Brownfield investment is an investor investing in an existing plant. Brownfield investment is mainly made through merger and acquisitions. Brownfield FDI is an investment made by a foreign company in existing production arrangements.
Go to the Third Tab “Foreign Investment in Company/LLP”
Under this tab, fill all these details-
√ Paid up capital of the company/ Capital Contribution for LLP.
Fully diluted basis means the total number of shares that would be outstanding if all possible sources of conversion are exercised. It includes:
1. Equity shares: As equity shares
2. CCDS/ CCPS: Equivalent Equity shares .(If the conversion ratio is not fixed upfront, the company may enter the maximum number of equity shares possible upon conversion in compliance with the pricing guidelines )
3. Share warrants: Equivalent Equity shares considering 100% exercise upfront
4. ESOPs: Equivalent Equity shares considering 100% exercise upfront
Note: If a start-up company has issued, convertible notes the same shall not be included in the paid-up capital on fully diluted.
To report only Capital Instruments held by person resident outside India on a repatriable basis
Since, I am discussing about the FDI treatment, so here under the tab
FOREIGN INVESTMENT IN COMPANY/LLP
We will fill details under “Value of Equity shares (on fully diluted basis) other than Foreign Portfolio Investment and Indirect Foreign Investment”
FOREIGN INVESTMENT INFO
Based on the details filled under the third Tab “Foreign investment in Company/LLP” foreign investment info will show details of FDI like this as shown below:
Now, The final step Click on the declaration checkbox and finally submit the Form.
CORRECTION IN ENTITY MASTER
Note: No changes/correction can be made in “Entity master” , it can be edited in this following way:
For any correction in the entity master details, the request can be made at email@example.com and firstname.lastname@example.org in the following format:
|S.No||Date field to be updated||Old Value (Existing)||New value (to be updated)|
Conclusion: By following the step-by-step process outlined above, you can simplify the filing of the FC-GPR form for receiving Foreign Direct Investment (FDI). Remember to adhere to the registration requirements, provide accurate information, and seek assistance from RBI’s support if any corrections are needed.