Overview
When an Indian company issues shares to a non-resident, it must allot the shares within 60 days of receiving the funds and report the allotment to the RBI in Form FC-GPR within 30 days of allotment. Transfers between residents and non-residents must be reported in Form FC-TRS within 60 days. Every company that has received FDI must also file the annual FLA return by 15 July. All of these are governed by FEMA and the FEM (Non-Debt Instruments) Rules, 2019.
Who Needs This Service?
Indian companies and LLPs receiving foreign investment, NRIs and foreign investors acquiring shares, and startups raising funds from overseas VCs.
FDI in Chennai / Tamil Nadu
FDI reporting is national and filed through the AD bank. For Tamil Nadu companies, stamp duty on share certificates issued to foreign investors follows Tamil Nadu law, and the related company-law filings go to the jurisdictional ROC.
Automatic and Government Routes Compared
The route depends on the sector and the cap.
| Aspect | Automatic route | Government route |
|---|---|---|
| Prior approval | Not required | Required |
| Application | None before investment | Through the single-window portal |
| Reporting after investment | Required | Required |
Key FDI Requirements
- Route: Automatic (no prior approval) or government route, depending on the sector and the investor’s country.
- Sectoral caps and conditions: As set out in Schedule I of the NDI Rules and the consolidated FDI Policy.
- Press Note 3 (2020): Investment from entities or beneficial owners in countries that share a land border with India requires government approval.
- Pricing: Shares are issued to non-residents at not less than fair value, determined by an internationally accepted pricing methodology and certified by a CA, SEBI-registered merchant banker or practising cost accountant. Transfers must also follow the pricing guidelines.
- Eligible instruments: Equity, fully and mandatorily convertible preference shares and debentures, share warrants, and startup convertible notes.
- Downstream investment: Indirect foreign investment rules apply to Indian companies owned or controlled by non-residents.
Reporting Calendar
| Event | Form | Due date |
|---|---|---|
| Issue of shares to a non-resident | FC-GPR | Within 30 days of allotment |
| Transfer between resident and non-resident | FC-TRS | Within 60 days of transfer or receipt of funds, whichever is earlier |
| Annual return on foreign liabilities and assets | FLA | By 15 July each year |
| Downstream investment | DI | Within 30 days |
| Foreign investment in an LLP | LLP(I) / LLP(II) | Within 30 days |
| Convertible notes issued by startups | CN | Within 30 days |
Instruments That Count as Foreign Investment
Only certain instruments count as equity under FDI rules.
| Instrument | Treatment |
|---|---|
| Equity shares | Counts as FDI |
| Compulsorily convertible preference shares | Counts as FDI |
| Compulsorily convertible debentures | Counts as FDI |
| Optionally convertible instruments | Treated as debt |
Documents Required
The FIRC or bank certificate, the investor KYC from the remitting bank, the valuation certificate, board and shareholder resolutions, the allotment details and PAS-3, the declaration by the authorised representative, and the CS certificate required for the filing.
Process
- Check the sector, the route and the investor’s eligibility.
- Obtain the valuation.
- Receive the funds through banking channels.
- Allot the shares within 60 days.
- Update the entity master on FIRMS and file FC-GPR or FC-TRS.
- The AD bank and the RBI review the filing and acknowledge it.
- File the FLA return annually.
How KVA Handles Foreign Investment and FDI Compliance
Karthick Vijayakumar & Associates, Company Secretaries, supports you through each stage with a single point of contact and a clear record of what has been done.
| Step | Stage | What KVA does |
|---|---|---|
| 1 | Requirement review | We understand your entity, objective and timeline, and confirm what Foreign Investment and FDI Compliance involves for your specific facts. |
| 2 | Document checklist | You receive a clear list of documents, particulars and approvals needed, with gaps flagged early. |
| 3 | Preparation and filing | Our team prepares, reviews and files the required forms and records, and tracks each acknowledgement. |
| 4 | Completion and follow-up | We hand over final records and explain the compliance that follows, so nothing is missed afterwards. |
Fees and Timelines
There is no RBI filing fee for normal reporting. Late Submission Fees apply for delays. Professional fees are available on enquiry.
Why Karthick Vijayakumar & Associates
Work is handled by company secretaries who deal with statutory filings and governance every day.
Timelines for Foreign Investment and FDI Compliance are tracked so that approvals and filings do not slip.
Plain-language updates at each stage, with no guesswork about what is pending.
Organised, decision-ready documentation that supports audits, banks and future filings.
Frequently Asked Questions
Within 30 days of the date of allotment of the shares.
The money must be refunded to the investor within 15 days after the 60-day period. Otherwise, the amount is treated as a contravention.
15 July each year, for companies and LLPs that have received FDI or made ODI.
No. Issue price to non-residents must not be less than the fair value determined under the pricing guidelines.
Yes. Under Press Note 3 (2020), investment by an entity or beneficial owner from a country sharing a land border with India requires government approval.
Yes, under the automatic route in sectors where 100% FDI is permitted under the automatic route without FDI-linked performance conditions.
No. Certain sectors are prohibited, and others have caps or conditions.
Investment by an NRI on a repatriation basis is treated as foreign investment. Investment on a non-repatriation basis is treated as domestic investment under Schedule IV.
It is a one-time registration on the FIRMS portal that records the company’s foreign investment details. It must be kept updated.
It is a fee the RBI charges for regularising delayed FEMA reporting, calculated according to the formula in the RBI’s directions.
Yes, under the NDI Rules, subject to pricing and, where the sector falls under the approval route, government approval.
Yes. Fully and mandatorily convertible debentures count as equity instruments for FDI purposes.
A Company Secretary in practice certifies FC-GPR filings, alongside the other documents the form requires.
The form used to report the transfer of equity instruments between a resident and a non-resident, filed on the RBI’s FIRMS portal within the prescribed period.
An annual return filed by Indian entities with foreign investment, reporting their foreign liabilities and assets, due by the date notified by the RBI.
A valuation by a registered valuer or chartered accountant, using an internationally accepted pricing methodology, is generally required, and issue price must not be below fair value.
If an Indian company is owned or controlled by non-residents, its investment in another Indian company is treated as foreign investment and must follow FDI norms.
Limits on the percentage of foreign ownership in certain sectors, such as defence, insurance and media, which vary and are updated by the Government.
Compliance with the entry route, sectoral cap, pricing guidelines and the receipt of consideration through banking channels, followed by allotment within the prescribed time.
Start-ups may issue convertible notes to non-resident investors for the amounts and tenure that the rules permit, with reporting requirements through the AD bank.
Receiving Foreign Investment?
Contact Karthick Vijayakumar & Associates to discuss the approval route, pricing and RBI reporting for your investment.
Contact UsSpeak with Karthick Vijayakumar & Associates
Third Floor, New No. 599, Old No. 230, Konnur High Road, Ayanavaram, Chennai, Tamil Nadu, 600023, India
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