The Reserve Bank of India (RBI) has introduced new directions under the provisions of the Foreign Exchange Management Act, 1999 vide A.P. (DIR Series) Circular No. 30 notified on the 7 June 2018 (hereinafter referred to as ‘RBI Circular’) laying down the roadmap for implementation of the reporting of foreign investments.
As per Reserve Bank of India, There are various ways of investment in India by foreigners and there are different forms for each type of investment like: Capital contribution in Company, LLP or investment in other investment vehicles.
To make it convenient, ease of doing business RBI will introduce a Single Master Form (SMF) subsuming all the existing reports. The focus of RBI is on integrating the foreign direct investment reporting system and RBI has introduced TWO FORMS for this.
Entity Master Form:
EMF is part of first Module of FIRMS (Foreign Investment Reporting and Management System). This forms is available on RBI website from (28, June 2018 to 12, July, 2018).
It would provide an interface for Indian entities to input their existing foreign investment (including indirect foreign investment) data. Entities shall provide data with respect to all foreign investments received, irrespective of the fact that the regulatory reporting to the Reserve Bank for the same has been made or not and whether the same has been acknowledged or not
Features of Form:
Some FAQ’s from RBI Circular:
A. Who is an Entity?
Important Notes for Entity Master
Complete detail that how to fill the form “EMF” has been given by RBI in the form of FAQ’s.
Indian entities not complying with these instructions will Not Be Able To Receive Foreign Investment (including indirect foreign investment) and will be treated as non-compliant with Foreign Exchange Management Act, 1999 (FEMA) and regulations made thereunder and liable for action as laid in FEMA or the regulations made thereunder.
Single Master Form:
SMF is part of second Module of FIRMS (Foreign Investment Reporting and Management System):
The SMF will be an integrated reporting form which will be an event-based. SMF would provide a facility for reporting total foreign investment in an Indian entity viz. company, LLP and other investment vehicles (Real Estate Investment Trusts (REITs)/Infrastructure Investment Trusts (InvIts)/Alternative Investment Funds (AIFs).
SMF will subsume the existing forms such as:
SMF will also be compulsory while:
(Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at [email protected])