FEMA and RBI Compliance Services

FC-GPR is used when a company issues fresh shares to a foreign investor. FC-TRS (Foreign Collaboration-Transfer of Shares) is filed when shares are transferred between a resident Indian and a non-resident, or vice versa. Both are mandatory filings on the RBI’s SMF (Single Master Form) portal.

RBI compliance for cross-border transactions requires verifying the nature of the remittance (Current or Capital Account), obtaining necessary approvals for high-value transfers, and ensuring accurate reporting through Form A2. Businesses must also monitor pre- and post-transaction limits set by the Foreign Exchange Management Act.

Indian entities investing abroad must report the transaction through an Authorized Dealer (AD) bank using Form ODI. Compliance involves submitting a valuation report, obtaining a Unique Identification Number (UIN) from the RBI, and filing Annual Performance Reports (APR) for the foreign subsidiary.

ECB regulations require companies to borrow from recognized non-resident lenders and use funds for permitted end-uses. Compliance includes obtaining a Loan Registration Number (LRN) before drawing up funds and filing monthly Form ECB-2 returns to report principal and interest payments.

Most startups can receive foreign funding under the Automatic Route, which does not require prior RBI or Government approval. However, they must still comply with post-funding reporting requirements, such as filing the Form FC-GPR on the FIRMS portal within the stipulated timelines.

The FIFP is the Government’s single-window clearance for foreign investment proposals under the Approval Route. It streamlines the process by allowing investors to apply online, whereafter the relevant ministry reviews the application in consultation with the RBI and FEMA authorities.

Non-compliance with FEMA can result in penalties up to three times the amount involved in the contravention or INR 2 lakh if the amount is not quantifiable. Continued contravention may lead to additional daily fines and legal scrutiny by the Enforcement Directorate (ED).

You can simplify FEMA reporting by partnering with experts who manage end-to-end filings like FC-GPR, FC-TRS, and ODI. Using professional advisory ensures accurate documentation, timely portal uploads, and adherence to the latest RBI Master Directions, reducing the risk of penalties.

Yes, FEMA compliance is mandatory for all cross-border remittances in India. Individuals and businesses must declare the purpose of the transfer and ensure it falls within the Liberalized Remittance Scheme (LRS) limits or specific RBI categories to avoid legal complications.

Under the Automatic Route, no prior approval is needed, only post-facto reporting. However, under the Approval Route via FIFP, the process typically takes 8 to 12 weeks, depending on the sector and the clarity of the documentation provided to the regulatory authorities.

An AD Bank acts as the intermediary between the entity and the RBI. They are responsible for verifying documents, facilitating the transfer of foreign exchange, and ensuring that all transactions comply with the Foreign Exchange Management Act guidelines before processing.