Procedure for Transfer of Equity Shares of Indian Company from Resident to Non Resident
Foreign Currency – Transfer of Shares (FC-TRS)
- The form FCTRS shall be filed within sixty days from the date of transfer of equity instruments or receipt / remittance of funds whichever is earlier.
- As per Para 8.10.3 of RBI Master Direction on Foreign Investment in India, The valuation certificate issued by a Chartered Accountant or a SEBI registered Merchant Banker or a practicing Cost Accountant must not be more than ninety days old as on the date of the transfer.
- The onus of Filling of FCTRS Form shall be on the resident transferor/ transferee.
- There is no fee for filing FC-TRS Form through RBI-FIRMS Portal
- Sectoral Limits applicable on the company must be taken care of before transferring shares.
- If Form FCTRS not filled within time limit then responsible person / entity liable for payment of late submission fee as decided by RBI.
Registration on RBI-FIRMS Portal
There are two types of registration is required to be done on RBI-Firms Portal before filling of FC-TRS Form:
1. Entity Registration
2. Business User Registration
First we need to done Entity User registration on RBI Firms Portal. After getting entity registration we need to done Business User registration.
For this purpose we need to visit on https://firms.rbi.org.in/
Pricing Guidelines of Equity instruments transferred by a person resident in India to a person resident outside India
As per Para 8.2 of RBI Master Direction on Foreign Investment in India, updated on March 17, 2022
The price of equity instruments of an Indian company transferred by a person resident in India to a person resident outside India should not be less than:
| In case of Listed Entity | The price worked out in accordance with the relevant SEBI guidelines in case of a listed Indian company |
| In case of unlisted Company | The valuation of equity instruments done as per any internationally accepted pricing methodology for valuation on an arm’s length basis duly certified by a Chartered Accountant or a SEBI registered Merchant Banker or a practicing Cost Accountant, in case of an unlisted Indian Company. |
Following documents shall be attached while filling e-form FC-TRS:
1) Consent Letter duly signed by the Buyer and Seller
2) Declaration by the Non-resident transferor / transferee, as per the format prescribed in FIRM User Manual of RBI
3) Share Transfer Deed in Form (SH-4)
4) Certificate indicating fair value of shares form Chartered Accountant or a SEBI registered Merchant Banker as specified in RBI circular
5) Share Purchase Agreement
6) Board Resolution of Investee Company
7) Shareholding Pattern of the Investee Company before and after the Acquisition of Shares by a Person Resident Outside India
8) FIRC and KYC received from AD Bank
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