RBI Filings and Compliances in connection with the receipt and transfer of/to Foreign Funds

There are a number of rules and regulations while receiving and transfer of funds from/to a foreign entity. The funds received have to be kept in a separate bank account till allotment and the money cannot be utilized for any other purpose etc.

  • FIRMS (Foreign Investment Reporting and Management System) – Single Master Form (SMF) : FIRMS is an online reporting platform/application for reporting Foreign investment in India through various returns. It is in two phases – Entity Master and SMF. SMF is a master form which facilitates reporting of 9 forms for foreign investment – FC-GPR, FC-TRS, LLP-I, LLP-II, CN, DRR, ESOP, DI, InVi. Form InVi is not made available yet. Therefore SMF is used for submitting all the existing reports to RBI w.r.t foreign transactions.

 

Some of the crucial filings are mentioned below: 

  • Filing Foreign Liabilities and Assets Annual Return (FLA): To be submitted by every Indian Company, LLP’s and SEBI registered Investment partners which has received Foreign Direct Investment or made Overseas Direct Investment in any of the previous year, including the current year have to file Foreign Liabilities and Assets (FLA return) by 15th July of every year. It is basically Annual return filed with RBI.

 

  • Reporting FDI in Form FC-GPR (Foreign Collaboration – Gross Provisional Return): Foreign Collaboration – Gross Provisional Return is required to be filed when an Indian company issues and allots shares/capital instrument to a foreign investor and receives investment in return. The form is required to be filed within 30 days of the transaction.

 

  • Reporting transfer of securities (outgo or inwards) in Form FC – TRS (Foreign Collaboration – Transfer of Shares): Foreign Collaboration – Transfer of Shares is to be filed when Indian company has transferred or has acquired shares/securities to/from a foreign entity. It is required to be filed within 60 days from the date of receipt of the amount.

 

Annual Performance Report in Form Overseas Direct Investment (ODI): ODI is reverse of FDI. If an Indian company invests in a foreign entity ODI reporting has to be done in Form ODI III to Reserve Bank by 30th June of every year.