FC-GPR stands for Foreign Currency- Gross Provisional Return.  An Indian company issuing equity instruments to a person resident outside India should file FC-GPR Form within 30 days from the date of issuance of the equity instruments.

There are two ways by which a foreign investor can invest in India– the automatic route and the government route.

• Automatic Route: Under this route, a prior approval from the government of India and its concerned ministries is not required. The RBI can be informed after the investment has taken place.
• Government Route: Under this route of FDI approval, a prior permission by the government and its concerned ministries is mandatory.
• However foreign investors are not allowed to invest in the following sectors as they are Prohibited sectors.

a) Lottery Business including Government/private lottery, online lotteries, etc.
b) Gambling and Betting including casinos etc.
c) Chit funds
d) Nidhi company
e) Trading in Transferable Development Rights (TDRs)
f) Real Estate Business or Construction of Farm Houses
‘Real estate business’ shall not include development of townships, construction of residential /commercial premises, roads or bridges and Real Estate Investment Trusts (REITs) registered and regulated under the SEBI (REITs) Regulations 2014.
g) Manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes
h) Activities/sectors not open to private sector investment e.g. (I) Atomic Energy and (II) Railway operations (other than permitted activities mentioned in permitted sectors).
Foreign technology collaboration in any form including licensing for franchise, trademark, brand name, management contract is also prohibited for Lottery Business, Gambling and Betting activities.

ENTITY MASTER FORM

The Reserve Bank of India vide AP (DIR Series) Circular no 30 dated June 07, 2018 introduced an interface, namely Entity Master Form (EMF), to the Indian entities, to input the details of the total foreign investment received by them as on the date of creation of the EMF account.

Pursuant to the introduction of the aforesaid FDI reporting norms, the Indian entities are now required to create an EMF account and SMF account on the Foreign Investment Reporting and Management System (FIRMS) portal by following the procedure mentioned therein.

The creation of EMF account is the first step and it is an entity specific account i.e. the Indian entity can create only one EMF account on FIRMS portal. After the EMF account is created, the Indian entity can proceed to create the SMF account on FIRMS Portal, which is an Authorized Dealer Bank (AD Bank) specific account.

SECTORAL CAPS FOR AUTOMATIC ROUTE

• Foreign Direct Investment must be compliant with the sectoral caps mentioned in the latest FDI policy. The sectors and their cap under the automatic route are given below:

Documents Required for automatic route:

• Copy of FIRC (Foreign Inward Remittance Certificate)
• Copy of KYC (Know your customer) report for the remitter and if the beneficiary and remitter are different entities, then KYC required for both.
• CS Certificate: Certificate from Company Secretary that all the requirements have been complied with as per Companies Act, 2013.
• Valuation Report by Chartered Accountant / Merchant Banker- Certificate from Chartered Accountant or Merchant Banker, shall Indicate the manner of arriving at a price of the shares issued to the person resident outside India:
• Copy of FIPB approval (if required);
• Board resolution for the Allotment of Securities;
• Appointment of Authorised Representative;
• Letter of Debit Authorization;
• Reason for any delay in submission, if required.

APPROVAL / GOVERNMENT ROUTE

The APPROVAL PROCESS for foreign direct investments in India are based on a standards and plan developed by DIPP. Submission of proposal and uploading document on Foreign Investment Facilitation Portal is required for the same. Following are the sectors and their limits under the Approval Route.

Akansha Rathi and Associates (ARACS), Company Secretary Firm in Navi Mumbai is engaged into compliance related services. We have a team of experts who not only possess required skills and experience but also have worked in complex business environment and were engaged in providing complex solutions in terms of providing related Compliance services to our clients.