What do you mean by a Greenfield Project?

Getting your hands on to any new industry can be broadly referred to as Greenfield project and Brownfield project. Meaning of the aforesaid terms are mentioned hereunder:

1. Greenfield project refers to completely new venture that has to be executed from scratch viz a viz setting up a newly incorporated company in India.

2. Brownfield project is construed as a venture that has been already kicked-off by someone and is now being handed off to someone else for completion viz a viz acquisition or purchase of already established company in India.

In accordance with Regulation 5(1) read with Schedule 1 of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017, A person resident outside India (PROI) may subscribe, purchase or sell capital instruments of an Indian company and has to comply with the reporting requirements.

When a PROI subscribes or purchases capital instruments of an Indian Company it is required to file Form FC-GPR consequently when a PROI sells capital instruments of an Indian Company, it will be required to file Form FC-TRS in order to report the same with Reserve Bank of India (RBI) through Authorized Dealer (AD) Category Bank.

Capital Instruments as defined under Regulation 2(v) of the said regulations shall mean and include the following issued by an Indian Company:

1. Equity shares;

2. Convertible Debentures;

3. Convertible Preference Shares; and

4. Convertible Share Warrants.

Time line for reporting Form FC-GPR

1. In case of subscription: Within 30 days of receipt of investment money against the capital instruments.

2. In case of Purchase: Within 30 days of allotment of capital instruments.

Note: Here date of allotment shall be construed with the period within which capital instruments are required to be allotted as per the relevant provisions of Companies Act, 2013.

Procedure for filing FC-GPR for the first time:

1. First instance of reporting in form FC-GPR is usually at the time of subscription of the capital instruments at the time of incorporation.

2. There are two pre-requisites which one needs to ensure before filing form FC-GPR and are mentioned below

3. Creation of Entity user – Creating a background of the Company in RBI database as Entity Master Form (EMF).

4. Registration of Business User – For filing in FIRMS (FCGPR) application with RBI as Single Master Form (SMF).

5. Login into SMF and reach your workspace.

Documents required for first FC-GPR:     

1. Declaration to be filed by the Authorized Representative of the Indian company;

2. Company Secretary Certificate;

3. Memorandum of Association;

4. FIRC and KYC;

5. Board Resolution;

6. No Object Certificate from Remitter – In case Remitter is different from the foreign investor;

7. Reason for delay – In case filing is done after 30 days;

8. Valuation Certificate from Chartered Accountant*

*Requirement of Valuation Certificate may vary depending on the AD Category Bank.  

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