- Reporting is mostly through the Reserve Bank’s portal, and most forms are due 30 or 60 days after the event.
- Late reporting is not fatal: the Late Submission Fee regime lets a company regularise delays without compounding in many cases.
- The annual FLA return is due by 15 July and applies to every Indian entity with foreign investment.
- Contraventions can attract a penalty of up to three times the amount involved under section 13 of FEMA, and are normally resolved by compounding with the RBI.
| Event | Form / return | Due | Who files |
|---|---|---|---|
| Issue of equity instruments to a non-resident | FC-GPR | Within 30 days of allotment | Indian company |
| Transfer of equity instruments between a resident and a non-resident | FC-TRS | Within 60 days of transfer, or of receipt of funds, whichever is earlier | Resident party in the case of sale by a non-resident; the non-resident in the case of purchase |
| Downstream investment by an Indian company having foreign investment | DI | Within 30 days of the investment | Indian investing company |
| Capital contribution or profit share in an LLP | LLP-I, LLP-II | Within 30 days of receipt of funds / transfer | LLP |
| Foreign liabilities and assets of the entity | FLA return | By 15 July for the preceding financial year | Indian entity with foreign investment |
| Annual activity certificate for a liaison office | Annual Activity Certificate | By 30 September | Liaison office through its auditor |
| External commercial borrowing | ECB-2 | Monthly return within seven working days of month-end | Borrower through its authorised dealer |
A calendar view
Typical year for a company with foreign shareholders
- On each allotmentFC-GPR within 30 days, with valuation, board resolution and auditor’s certificate.
- On each transferFC-TRS within 60 days, with the transaction’s valuation compliance.
- Monthly (ECB)ECB-2 returns within seven working days of month-end.
- By 15 JulyFLA return for the preceding financial year.
- By 30 SeptemberAnnual activity certificate for any liaison office.
- Year-roundMaintain FIRC, KYC and bank advice for each inward remittance.
Pricing and the “60-day” rules that cause defaults
- 60 days from receipt of funds to allotment. If shares are not allotted within 60 days of receipt of the inward remittance, the amount must be refunded within 15 days after that period, otherwise it needs RBI approval to be retained.
- Pricing. Equity instruments issued to non-residents must be at or above fair value determined by an internationally accepted pricing methodology; those transferred from a resident to a non-resident cannot be below that value, and from a non-resident to a resident cannot be above it.
- Deferred consideration. Where part of the price is deferred or placed in escrow, the Rules cap the percentage and period that can be left outstanding.
- Conversion of convertible instruments requires a fresh reporting event and a valuation at the time of conversion.
Late reporting
The Reserve Bank’s Late Submission Fee framework, introduced in 2020, allows a person who has delayed reporting to submit the form with a fee calculated as a function of the amount involved and the delay, rather than going through compounding. Where the contravention goes beyond late reporting — for instance, issuing shares without the required approval or at below fair value — compounding with the Reserve Bank under section 15 of FEMA is the route. Compounding results in a consent order and a fixed amount; it is not a finding of guilt.
| Contravention | Typical route |
|---|---|
| Late filing of FC-GPR, FC-TRS or FLA | File with Late Submission Fee |
| Allotment of shares after 60 days without refund or approval | Application to the RBI; possible compounding |
| Issue at below fair value | Compounding application with valuation revisited |
| Investment in a prohibited sector or without government approval | Compounding, if permissible, and conditions imposed by the RBI |
Foreign-investment compliance file
- Cap table showing resident and non-resident holders, updated on every event
- FIRC and KYC for each remittance
- Valuation reports supporting each issue and transfer
- FC-GPR, FC-TRS and DI acknowledgements with dates
- FLA return for each year with the audited balance sheet
- Board resolutions and ROC filings aligned to the same allotment dates
For the route into India, see FDI routes and caps and setting up an Indian subsidiary.
Frequently asked
Who is responsible for filing FC-TRS?
Under the reporting framework, the resident transferor or transferee is responsible depending on the direction of the transfer; the Indian company often assists but is not the filing party in every case. Agree this in the share purchase agreement.
Does an NRI’s investment follow the same reporting?
Investment by an NRI on a non-repatriation basis in an Indian company falls in a different scheme with its own reporting; repatriable investment follows the non-resident framework above. Confirm which route applies.
Do all companies file the FLA return?
Every Indian entity that has received foreign investment or made overseas investment must file the FLA return by 15 July, even if there was no movement in the year.
Is delayed reporting a criminal offence?
No. FEMA contraventions are civil, with penalty up to three times the sum involved under section 13, and are normally compounded.
RBI forms, portals, the Late Submission Fee schedule and compounding rules are revised by circular and rule. Confirm the current Master Direction and the RBI portal requirements before filing. Not a substitute for advice from an advocate or chartered accountant on your facts.