Welcome to India! If you are a founder from the US, UK, or Europe, you have made a great choice. India is a booming market. However, money cannot just be sent freely; it must be reported. This is where the FC-GPR compliance in India comes in.
Do not worry. The rules are strict, but they can be handled easily with the right help. Let us break it down simply.
What is FC-GPR?
FC-GPR stands for Foreign Currency-Gross Provisional Return. It is a form that is filed with the Reserve Bank of India (RBI).
When your new Indian company issues shares to you (the foreign investor), the government wants to know. This reporting is done through the FC-GPR form. It is the way foreign investment is tracked by the RBI.
When Should FC-GPR be Filed?
Timing is everything in India. The timelines are very specific and must be followed.
Receipt of Money: First, the investment money is received in your Indian bank account.
Allotment of Shares: The shares must be allotted to the investor within 60 days of receiving the money.
Filing the Form: The Form FC-GPR must be filed within 30 days after the shares are allotted.
Important Note: If these deadlines are missed, penalties are imposed. It is always better to be early!
How is the Filing Done?
The filing is done online. A platform called the FIRMS Portal (Foreign Investment Reporting and Management System) is used.
Step 1: An account is created on the FIRMS portal.
Step 2: The “Entity Master” details are registered. This is where your company details are entered.Download checklist for Entity master creation
Step 3: The “Single Master Form” (SMF) is selected.
Step 4: The FC-GPR form is chosen and filled out.
Step 5: The form is submitted to your AD Bank (Authorized Dealer Bank).
The AD Bank checks the form. If everything is correct, it is approved by the RBI.
Documents Required for FC-GPR
Paperwork is needed to prove the transaction is genuine. The following documents should be kept ready:
FIRC (Foreign Inward Remittance Certificate): This is proof that money was received from abroad. It is issued by your bank.
KYC (Know Your Customer): A KYC report for the foreign investor is required. This is obtained from the investor’s bank overseas.
Valuation Report: The share price must be valued correctly. A report from a Chartered Accountant or Merchant Banker is needed.
CS Certificate: A certificate from a Company Secretary is required to confirm that laws were followed.
Board Resolution: A formal note that shares were allotted by the company directors.
What Happens if You Delay?
If the form is not filed on time, it is considered a violation. However, it can be fixed.
A Late Submission Fee (LSF) is charged by the RBI. The amount depends on how late the filing is and the amount of investment. To avoid this extra cost, compliance should be prioritized.
Summary
Setting up in India is exciting. But, compliance is key. The FC-GPR compliance in India ensures that your foreign investment is legal and safe.
Money is received.
Shares are allotted.
The form is filed within 30 days.
It is that simple!
Who is responsible for filing FC-GPR?
The Indian company receiving the foreign investment is responsible for filing the form.
What is the difference between FC-GPR and FC-TRS?
FC-GPR is used when new shares are issued by the company. FC-TRS is used when shares are transferred between a foreigner and an Indian resident.
How long does approval take?
It takes 7-10 days for form approval.