From Foreign Investment To Exit: Master FC-GPR And FC-TRS Filings

1. INTRODUCTION

In today’s globalised economy, foreign investments and cross-border securities transfers are critical to many Indian companies. The Indian regulatory regime, via FEMA, mandates certain filings for inbound foreign direct investment (FDI) and transfers of securities between residents and non-residents. Two key compliance filings are the FCGPR and the FCTRS. These ensure transparency of foreign investments, issue or transfer of shares, and help the Reserve Bank of India (RBI) monitor foreign exchange flows and foreign liabilities and assets. Non-compliance can lead to penalties, delays in future investment rounds, and regulatory risk. This article aims to give a full and clear view of each form, how they differ, how to file, key time frames, recent amendments and practical pointers.

2. LEGAL FRAMEWORK

i. Governing Act & Regulations

The principal law is FEMA 1999, which regulates foreign exchange, cross-border investments and transactions involving residents and non-residents. Under FEMA:

• Section 6 empowers the RBI to determine the manner in which foreign exchange transactions may be made.
• Section 7 deals with capital account transactions (such as issue/transfer of shares).
• Section 13 prescribes penalties for contravention of FEMA.

Under this, the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 (“FDI-Regulations” or “Non-debt Regulations”) set out reporting obligations for Indian companies receiving FDI or transfers of securities. Schedule 1 of these Regulations covers various prescribed forms (including FC–GPR, FC–TRS).

ii. RBI Circulars & Portals

Over time, the RBI has issued circulars mandating online filing, discontinuing physical forms, and, more recently, streamlining processes via its portal (FIRMS). For example:

• The circular to make online filing of ARF, FC-GPR and FC-TRS mandatory from 8 February 2016.
• The RBI recently enabled bulk upload functionality for FCGPR, FCTRS and other forms from 1 July 2025 on the FIRMS portal.
• Why these filings matter

These forms help the RBI track:

• Inflows of foreign capital into Indian companies (via FCGPR).
• Transfers of securities where there is non-resident involvement (via FCTRS).
  They support India’s macro-prudential monitoring of foreign liabilities and assets (which also feeds into the annual Return on Foreign Liabilities & Assets (FLA) filing). Failure to comply can trigger enforcement under FEMA and result in the compounding of penalties.

3. FORM FC-GPR (FCGPR) – DETAILED BREAKDOWN

 i. What is it?

The FCGPR (Form Foreign Currency – Gross Provisional Return) is the form submitted by an Indian company when it receives foreign direct investment (FDI) and issues shares or other eligible instruments to a non-resident investor. It captures the investment inflow, share issue details, pricing, the investor, etc.

ii. Applicability / When to file

The key scenarios when the form is required include:

• Indian company receiving FDI under the automatic or government route and issuing shares/convertible instruments to the non-resident investor.
• When bonus shares are issued to non-resident investors (even if no fresh funds are received) — for example, the article on bonus shares under FEMA: even if no consideration is received, FCGPR may still be required.

iii. Time frame for filing

There is a prescribed time frame from the date of share allotment or receipt of investment. Some authorities note “within 30 days of allotment”. Some older references say “within 180 days,” but the practical guidance for companies now is 30 days.

iv. What needs to be included

Key data fields typically include:

• Investor details: name, address, nationality, residential status.
• Amount and currency of the foreign investment.
• Date of receipt of funds (or date of allotment).
• Share-issuing company details: name, CIN, sector, route (automatic or government).
• Pricing details and number of shares allotted.
• Post-allotment shareholding pattern.
• Certificate by a practising professional (CA/CS) confirming compliance with applicable laws (for example, under the Companies Act) when required.

v. Recent amendments/updates

• Online filing mandatory from 8 February 2016 via e-Biz / FIRMS portal; physical filing discontinued.
• From 1 July 2025, RBI’s FIRMS portal enables bulk upload of FCGPR (along with FCTRS) for business users via CSV template — helpful for entities with multiple investments.
• Modification option introduced on the FIRMS portal for FCGPR (edit after AD bank comments rather than filing fresh) and simplified reporting via Single Master Form (SMF).

vi. Practical Tips

• Ensure the AD Category-I bank is tied up early and an FIRC (Foreign Inward Remittance Certificate) is obtained for the investment inflow; without this, the FCGPR cannot be filed properly.
• Document the board resolution for allotment, share certificate issuance, the invoice/receipt of funds, etc.
• If bonus shares are issued, even if no fresh funds, assess whether FCGPR is required (as noted above).
• Register as a Business User on the FIRMS portal early; ensure correct code/sector and correct dropdowns.
• Use the bulk upload facility if you have many filings.
• Pay close attention to the 30-day window; delays may attract penalties (see later section).
• Keep records of acknowledgement and RBI reference number, as future upstream compliance and FLA return depend on this.

4. FORM FC-TRS (FCTRS) – DETAILED BREAKDOWN

i. What is it?

The FCTRS (Form Foreign Currency – Transfer of Shares) is the form to be filed when shares (or other equity instruments) of an Indian company (resident) are transferred between a resident and a non-resident, or between non-residents, as per the FEMA Non-debt Regulations. It helps RBI / AD bank track cross-border changes in shareholding.

ii. Applicability / When to file

Situations include:

• A non-resident investor transfers its equity shares in an Indian company to another non-resident (resident outside India) or to a resident.
• Reporting by a resident Indian company when shares are acquired by non-residents under certain circumstances.
• Transfers on a recognised stock exchange by a person resident outside India of equity instruments in an Indian company require FCTRS.

iii. Time frame for filing

The transfer must be reported within 60 days of the transaction (i.e., date of transfer of equity instruments) or receipt/remittance of funds, whichever is earlier.

iv. What needs to be included

Typical fields include:

• Common investment details: company name, CIN, PAN, route(automatic/government), sector.
• Details of the transfer: number of shares, value, date of transfer, and consideration.
• Transferor/transferee details: resident/non-resident status.
• Purpose code, mode of payment, remittance details if any.
• Post-transfer shareholding pattern.
• Bank details through which consideration was remitted/received.
  The FIRMS portal guidance lists tabs/forms for FC-TRS in SMF.

v. Recent amendments/updates

• As above, online filing has been mandatory since February 2016.
• Bulk upload via the FIRMS portal from 1 July 2025.
• Increased regulatory focus by enforcement agencies on delays in FCTRS and FCGPR — for example, the Enforcement Directorate (ED) has signalled enhanced scrutiny in FY2025 on FEMA violations, including delayed filings of FCGPR/FCTRS.

vi. Practical Tips

• Ensure the resident or non-resident transferor/transferee is correctly classified, as the party responsible for filing may vary (in resident → non-resident transfers, the resident entity often must report).
• Maintain documents such as share transfer deed, board resolution, share certificate, bank remittance evidence, etc.
• Coordinate with your AD bank early to ensure that the remittance/receipt of consideration is reflected and the FCTRS submission is not delayed.
• File within 60 days — delays increase risk of penalties, regulatory scrutiny.
• Use bulk upload if you have multiple transfers in a short period.
• Verify that the purpose code and mode of payment are correctly entered in the FIRMS portal, as mismatches may cause rejection.

5. KEY DIFFERENCES BETWEEN FCGPR AND FCTRS

*Note: While older references mention 180 days, current guidance/practice emphasises 30 days.

6. TIME FRAMES & IMPORTANT MILESTONES

• Investment receipt/share allotment: An Indian company receives foreign investment and issues shares.
• Within 30 days: File FCGPR (though companies should check the latest portal instructions and any sector-specific guidance).
• Within 60 days: File FCTRS (transfer scenario) from the date of transfer or receipt/remittance of funds, whichever is earlier.
• Ongoing: Maintain documents (board resolution, share certificate, FIRC, bank advice, valuation, KYC).
• Annually: A Company with foreign investment must file Return on Foreign Liabilities & Assets (FLA) as required by RBI (separate compliance but linked).
• From 1 July 2025: Bulk upload facility enabled for FCGPR, FCTRS via FIRMS portal.

7. FORMS TO BE FILED & FILING PROCESS

a) Portal: FIRMS / SMF

• The primary portal for filing FCGPR and FCTRS is the RBI’s FIRMS (Foreign Investment Reporting & Management System) portal.
• Use of Single Master Form (SMF) for standardised filings.
• Business User (BU) registration is required by the company (or authorised person). For bulk uploads: a CSV template + digital signature is needed.

b) Steps for submission

Typical steps:

i. Company (or its authorised Business User) logs on to the FIRMS portal.

ii. Choose return type: “Form FC-GPR” or “Form FC-TRS”.

iii. Fill in the common investment details, then specific tabs (issue/transfer details).

iv. Attach necessary declarations/certificates (if required).

v. Submit the form; acknowledgement/reference number is generated.

vi. Maintain printouts/copies for records; ensure AD bank receives evidence of acknowledgement.

c) Filing by the AD bank

In some cases, the Authorised Dealer (AD) Category-I bank has a role: they coordinate the process, validate KYC, obtain FIRC, and may upload or facilitate the form. The Indian company must ensure the AD bank is involved timely.

Documents typically required

• FIRC (Foreign Inward Remittance Certificate) – for FCGPR.
• Share-issue resolution and allotment letter.
• Share certificate.
• Valuation report (if required under FDI pricing guidelines).
• Bank remittance advice.
• KYC of foreign investor (passport, address proof, non-resident status).
• Board resolution for transfer (in FCTRS scenario).
• Transfer deed/share transfer instrument.
• Post-allotment / post-transfer shareholding pattern.

8. RECENT AMENDMENTS & KEY DEVELOPMENTS

• Online filing mandatory: From 8 February 2016, physical filing of ARF, FCGPR and FCTRS discontinued; only online mode accepted.
• Bulk upload facility (1 July 2025): For high-volume filings, the RBI enables bulk CSV upload for FCGPR, FCTRS and DI forms via FIRMS.
• Modification option: The ability to modify a submitted FCGPR on the portal when the AD bank raises queries (rather than filing afresh) – introduced recently.
• Increased enforcement focus: The ED in 2025 announced it will place renewed emphasis on FEMA violations, including delayed filings of FCGPR/FCTRS.
• Penalty matrix update (Sept 2022): The RBI updated the matrix for late submission fees for FEMA returns, including FCGPR/FCTRS.

9. DIFFERENCES IN A QUICK SNAPSHOT

• FCGPR = For issue of shares/instruments to non-resident (FDI inflow)
• FCTRS = For transfer of shares/instruments involving non-resident (resident ↔ non-resident or non-resident ↔ non-resident)
• Filing time: ~30 days for FCGPR vs ~60 days for FCTRS
• Focus: Inflow of funds (FCGPR) vs change in shareholding/cross-border transfers (FCTRS)
• Trigger event: Share allotment (FCGPR) vs share transfer (FCTRS)
• Data captured: Investor + investment details (FCGPR) vs transferor/transferee + shareholding change (FCTRS)

10. PENALTY & RISK OF NON-COMPLIANCE (DETAILED)

a) Statutory base

• Under FEMA Section 13: up to three times the amount involved, or ₹2 lakh if the amount cannot be quantified.

b) Specifics for FCGPR/FCTRS

• Delay or non-filing of FCGPR: 1% of investment amount (min ₹5,000) per month for the first six months; thereafter penalty can be doubled.
• Late submission fee matrix (Sept 2022) for returns like FCGPR, FCTRS: ₹7,500 + (0.025% × A × n) where A = amount involved, n = number of days delay
• Compounding guidelines: Fixed amounts plus variable amounts depending on the size of the transaction. For reporting contraventions (including part B of FC-GPR/FCTRS), there are slabs.

c) Practical risk

• Delay may lead to the AD bank refusing to approve fresh rounds of FDI, or valuation issues in future.
• Non-compliance may be flagged by ED in investigations of foreign exchange violations.
• Possible freezing of the benefit of the FDI route if multiple sequential non-compliances.
• Administrative cost and reputational risk in case of compounding application.

11. CONCLUSION

Compliance with FCGPR and FCTRS filings under FEMA is not optional for Indian companies receiving foreign investment or involved in cross-border share transfers. Proper timestamping, documentation, liaison with the AD bank, and timely electronic submission on the RBI’s FIRMS portal are essential. Delays or incorrect filings carry significant penalty risks and can hamper future corporate action. The regulatory environment is evolving (with bulk uploads, modification features, and stronger enforcement), so companies should stay updated and build processes accordingly.

If you are a company, investor, or adviser, it’s advisable to maintain a compliance checklist, appoint a dedicated compliance officer, register on the FIRMS portal early, and monitor timelines carefully to avoid falling foul of rules.

Disclaimer: –

The information provided is for educational purposes and should not be considered as professional advice. The author shall not be liable for any direct, indirect, special, or incidental damage resulting from, arising out of, or in connection with the use of the information.