FC-GPR (Foreign Currency - Gross Provisional Return) is a crucial compliance requirement in India for companies that receive Foreign Direct Investment (FDI). It's a form that must be filed with the Reserve Bank of India (RBI) to report the issuance of capital instruments (like equity shares, convertible preference shares, convertible debentures) to a person resident outside India.

 

What is FC-GPR and its purpose?

• Purpose: The primary purpose of FC-GPR is to monitor and regulate foreign investment flowing into India. It ensures transparency and compliance with the Foreign Exchange Management Act (FEMA), 1999, and its associated regulations. By filing FC-GPR, the Indian company formally informs the RBI about the foreign investment received and the corresponding allotment of shares/securities.

• Trigger Event: FC-GPR is triggered after an Indian company has received foreign investment and allotted shares or other eligible capital instruments to the foreign investor. It's not filed merely upon receipt of funds, but specifically after the issuance of securities against those funds.

• Mandatory Requirement: It is a mandatory compliance requirement for Indian companies that issue capital instruments to non-residents under the FDI scheme.

• Due Date: The FC-GPR form must be filed within 30 days from the date of issuance of the capital instruments.

 

Who needs to file FC-GPR?

Any Indian company that issues shares/convertible debentures/preference shares against funds received from outside India under the FDI Scheme is required to file Form FC-GPR. This also includes instances where eligible instruments are offered without consideration, such as bonus shares or shares issued due to merger/demerger.

 

FC-GPR Filing Process:

The filing of FC-GPR is done online through the RBI's FIRMS (Foreign Investment Reporting and Management System) portal (https://firms.rbi.org.in/firms/faces/pages/login.xhtml). The process typically involves several steps:

1. Preparation of Documents: Before initiating the online filing, the Indian company must gather several key documents and information:

   • Valuation Report: A valuation report from a SEBI-registered Category I Merchant Banker or a Chartered Accountant (CA) is essential, certifying the fair value of the shares issued. The valuation date should generally not be older than 90 days from the transaction date.

   • Foreign Inward Remittance Certificate (FIRC): Obtained from the Authorized Dealer (AD) Bank through which the foreign funds were received, confirming the inward remittance.

   • KYC (Know Your Customer) Report: KYC of the foreign investor, usually provided by their remitting bank.

   • Board Resolution: A copy of the Indian company's Board Resolution authorizing the allotment of securities to the foreign investor.

   • Company Secretary (CS) Certificate: A certificate from the Company Secretary (or a practicing CA if no CS) confirming compliance with the Companies Act, 2013, and other applicable laws/regulations.

   • Shareholding Pattern: Pre and Post-issue shareholding patterns of the company.

   • PAS-3 Form and Challan: Confirmation of filing of Form PAS-3 with the Registrar of Companies (ROC) within 30 days of share issuance.

   • Government Approval Letter: If the investment is under the Government Route, a copy of the Foreign Investment Promotion Board (FIPB) or relevant government approval.

   • Terms and Conditions: In case of Convertible Compulsorily Convertible Debentures (CCD) or Compulsorily Convertible Preference Shares (CCPS), the terms and conditions of their issue.

2. RBI FIRMS Portal Registration (Crucial Step): The FIRMS portal requires a two-tiered registration process:

   • a) Entity User Registration:

     • Who: This registration is for the Indian entity (company, LLP, or startup) itself. Only one "Entity User" can be registered per entity.

     • Process:

       1. Go to the FIRMS portal: https://firms.rbi.org.in

       2. Click on "Registration Form for New Entity User."

       3. Fill in the details of the authorized signatory (First Name, Last Name, User Name, Email, PAN, Mobile Number). Crucially, the PAN here belongs to the authorized signatory, not the entity itself.

       4. Provide the entity's details: Entity Name, Company Type, CIN/LLPIN, Registered Address, and select the RBI Regional Office under whose jurisdiction the registered office falls.

       5. Upload a scanned copy of the Authority Letter (Board Resolution) and PAN of the authorized signatory (in PDF format). The authority letter must be in the format prescribed in the FIRMS user manual and signed by the authorized signatory and stamped by the company.

       6. Click "Submit." You will receive a success message.

       7. The RBI back office verifies the details. Within approximately 2-3 working days, you will receive an email (to the registered email ID) from autoreply-fid@rbi.org.in with your Entity User ID and a default password.

       8. Upon first login, you will be prompted to change this default password.

       9. Fill Entity Master: After successful Entity User login, you need to go to "Master Setup" -> "Entity Master" -> "Add Details" and fill in comprehensive details about the entity's foreign investment history. This is a one-time activity.

   • b) Business User Registration:

     • Who: This registration is for the individual who will actually file the forms on behalf of the entity. This can be the same person as the Entity User or another authorized finance/CS staff member. One Business User per PAN.

     • Process:

       1. Once the Entity Master is approved, log in to the FIRMS portal.

       2. Click on "Registration Form for New Business User."

       3. Enter the details of the Business User (which can be the same as the Entity User or a different person).

       4. Link the Business User to the Entity by providing the Entity ID (which you would have obtained after Entity User registration).

       5. Upload the same authorization letter and KYC proof (PAN card of the Business User).

       6. Submit the form.

       7. Your AD Bank (not RBI) vets and approves the Business User registration. An email will be sent to the Business User upon approval.

       8. Only a registered Business User can access the Single Master Form (SMF) workspace and file FC-GPR and other returns.

3. Filing Form FC-GPR (Single Master Form - SMF):

   • Login as Business User: Log in to the FIRMS portal using the Business User credentials.

   • Navigate to SMF: Go to File Return -> Single Master Form.

   • Select Form FC-GPR: Choose "FC-GPR" from the dropdown list of return types. Click "Add New Return."

   • Fill in Sections: The form is divided into various tabs, and you need to accurately fill all the required details:

     • Common Details: Transaction date (date of allotment), nature of issue (fresh issue, rights, bonus, conversion), automatic vs. government route, and approval details (if government route).

     • Issue Details: Type of security (equity, CCPS, CCD), face value, issue price, premium, number of instruments.

     • Foreign Investor Details: For each investor – name, country, address, constitution (individual/company), existing shareholding, and post-issue shareholding.

     • Amount of Issue / Remittance Details: Currency of receipt, amount received, conversion rate, INR equivalent, FIRC reference number, KYC reference number.

     • Shareholding Pattern: This tab usually auto-computes the resident vs. non-resident shareholding percentages before and after the allotment. Verify these against your company's cap table.

     • Attachments: Upload all the necessary supporting documents prepared in Step 1 (Valuation Report, FIRC, KYC, CS Certificate, Board Resolution, etc.) in PDF format.

   • Declaration and Digital Signature: Tick the declarations and then digitally sign the form using the Business User's Digital Signature Certificate (DSC). (The DSC must be registered on the FIRMS portal).

   • Submit to AD Bank: After successful signing, submit the form. The status will change to "Pending at AD-Bank."

   • AD Bank Scrutiny: Your Authorized Dealer (AD) Bank will conduct a preliminary verification. They may raise e-queries on the portal if there are discrepancies. You must respond to these queries by "resubmitting" the form.

   • RBI Approval: Once the AD Bank is satisfied, they will forward the submission to the RBI for final approval. The portal status will eventually change to "Approved by RBI."

   • Download Acknowledgement: After RBI approval, download the auto-generated PDF acknowledgement and keep it for your records and audit purposes.

Penalties for Non-Compliance/Delay:

Failure to file FC-GPR within the stipulated 30 days or providing incorrect information can attract penalties, including a Late Submission Fee (LSF). The LSF amount depends on the delay period and the amount involved in the delayed reporting. The RBI has a compounding mechanism for contraventions under FEMA.