The Foreign Exchange Management Act, 1999 The Foreign Exchange Management Act, 1999 (FEMA) is an Act of the Parliament of India “to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India”. FEMA serves to make external transactions easier as its basic intention is to manage and not to regulate. This article lists out some major compliances covered under FEMA.

  1.  Annual Return on Foreign Liabilities and Assets (FLA Return)
  • FLA Return is required to be submitted mandatorily by all the India resident companies which have received FDI and/ or made ODI in any of the previous year(s), including current year
  • To be filed on or before 15 July every year.
  • If the Indian company does not have any outstanding investment in respect of FDI and/or ODI as on end of the reporting year, the Company need not submit the FLA Return

 

 

  1. Annual Performance Report

 

  • An Indian Party (IP) / Resident Individual (RI) which has made an Overseas Direct Investment (ODI) has to submit an Annual Performance Report (APR) in Form ODI Part II to the AD bank in respect of each Joint Venture (JV) / Wholly Owned Subsidiary (WOS) outside India.
  • To be filed on or before 31st December, every year.

 

  1. External Commercial Borrowings

 

  • Borrowers are required to report all ECB transactions to the RBI monthly through an AD Category – I Bank in the form of ‘ECB 2 Return’.
  • To be filed monthly

 

  1. Single Master Form (W.E.F 30.06.2018)

 

  • A master form which provides for the reporting of 9 forms for foreign investment viz., FC-GPR, FC-TRS, LLP-I, LLP-II, CN, DRR, ESOP, DI, InVi.
  • Integrates the reporting requirements for FDI in India, irrespective of the instrument through which foreign investment is made.

 

  1. Advance Reporting Form

 

  • An Indian organization enjoying the benefit of receiving investment from abroad for issue of shares or other qualified securities under the FDI Scheme needs to report the details of the amount of consideration to the concerned Regional Office of the Reserve Bank via its AD category I .
  • Need to be filed within 30 days from the date of issue of offers.

 

  1. Form FC-GPR

 

  • Foreign currency Gross provisional Return (FC-GPR) is a form in which a company is required to submit with RBI for reporting of the issue of eligible instruments to the overseas investor against any FDI inflow.
  • Form FC-GPR has to be filed with the RBI, within 30 days from the date the securities are allotted to the non-resident.

 

  1. Form FC-TRS

 

  • Reporting of transfer of shares and other eligible securities between residents and non-residents and vice- versa is to be made in Form FC-TRS through AD Category I Bank.
  • To be filed within 60 days from the date of receipt of the amount of consideration

 

  1. Form ODI

 

  • Overseas investments in Joint Ventures (JV) and Wholly Owned Subsidiaries (WOS) by an Indian party / resident individual are to be reported to the RBI in this form
  • At the point when they get a share certificate or some other documentary proof of investment in the outside JV/WOS as a proof of investment and present the equivalent to the assigned AD within 30 days.

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