FDI Filing with RBI & FEMA Compliance
What is FDI Filing?
Foreign Direct Investment (FDI) is the capital investment made by a foreign individual or entity into an Indian company. While FDI is permitted under both automatic and approval routes, all investments must be reported to the Reserve Bank of India (RBI) within prescribed timelines.
Under the Foreign Exchange Management Act (FEMA), 1999 and RBI's Foreign Investment Reporting and Management System (FIRMS), companies receiving FDI are required to file multiple forms depending on the nature and stage of the investment. Failure to file FDI returns accurately or within time may lead to penalties under FEMA and can delay further foreign investments.
Who Must File FDI Returns?
Any Indian entity (Private Ltd, Public Ltd, LLP) that receives foreign investment under the automatic or government route must file:
- FC-GPR (Form for allotment of shares)
- FC-TRS (Transfer of shares between resident and non-resident)
- FDI Reporting for LLPs (Form LLP I and LLP II)
- Annual Return on Foreign Liabilities and Assets (FLA Return)
These filings apply to:
- Startups raising foreign equity capital
- Companies with foreign shareholders
- Firms receiving convertible notes, debentures, or share premium
- LLPs receiving capital contributions from non-residents
Types of FDI Filing & Applicable Forms
| Form | Purpose | Timeline |
|---|---|---|
| FC-GPR | Issue of shares by Indian company to foreign investor | Within 30 days from issue |
| FC-TRS | Transfer of shares between resident and non-resident | Within 60 days of transfer |
| LLP(I) | Receipt of capital contribution from non-resident into LLP | Within 30 days from receipt |
| LLP(II) | Disinvestment or transfer of capital in LLP | Within 60 days of transfer |
| CN (Convertible Notes) | Issue or transfer of convertible notes to foreign investors | Within 30 days |
| ESOP Reporting | Allotment of ESOPs to non-resident employees/directors | Within 30 days of allotment |
| DRR Reporting | Downstream investment by Indian entity having FDI | Within 30 days of investment |
Documents Required for FDI Filing
For FC-GPR:
- Board resolution for share allotment
- FIRC (Foreign Inward Remittance Certificate) from AD bank
- KYC from remitter’s overseas bank
- Valuation certificate by CA/merchant banker
- MOA & AOA, shareholding pattern post-issue
- Declaration by authorised signatory
- CS Certificate (Form ESOP if applicable)
For FC-TRS:
- Transfer agreement
- Consent letter from buyer and seller
- FIRC/Outward Remittance Certificate
- Valuation report
- PAN and passport copies of foreign investor
Penalty for Non-Compliance under FEMA
| Nature of Default | Penalty under FEMA |
|---|---|
| Delay in filing FC-GPR/FC-TRS | Up to ₹5,000 per day and prosecution under compounding |
| Wrong/incomplete filings | Summon from RBI, compounding fee, inspection of books |
| Non-reporting of ESOP/Bonus | ₹10,000 + ₹1,000 per day thereafter |
Compounding under FEMA is now mandatory in case of reporting delays.
Why Timely FDI Filing Matters
- Prevents legal exposure under FEMA & RBI
- Avoids penalties and delays in future funding rounds
- Mandatory for due diligence in M&A and VC investments
- Keeps company compliant with sectoral caps and automatic route thresholds
- Necessary for seamless remittance processing through AD Banks
CACSFinacc’s FDI Filing Services
End-to-End FDI Structuring & Advisory
We help structure the investment to remain FEMA & Income Tax compliant
FIRMS Portal Registration & Entity Setup
Register Business User, link entity, and manage DSC-based login for filing
Preparation & Filing of FC-GPR / FC-TRS / CN / LLP Forms
Draft, validate, and submit forms through RBI FIRMS portal with tracking
Valuation Report and KYC Coordination
Liaise with SEBI merchant banker or CA for compliance-ready valuation
FLA Return Filing
Annual reporting of foreign liabilities to RBI, even if no new investment
Penalty Resolution and FEMA Compounding Support
If forms were missed, we handle penalty waivers or compounding applications with RBI
Why Choose CACSFinacc for FDI Filing?
- 100% adherence to RBI, FEMA, and DIPP guidelines
- Experience with startups, tech firms, VC-funded companies, and cross-border M&A
- One-stop solution for valuation, documentation, and RBI portal filings
- Ongoing support for TDS on FDI, share certificates, and ROC updates