Long-form Regulatory Guide #3

FC-GPR & FDI Reporting: Don’t Let FEMA Kill Your Foreign Round

Educational only. Not legal advice. FEMA is technical and penalties can be serious — always work with a FEMA-literate CA/CS/lawyer.

The founder mistake: money is in, so we’re done

You closed a foreign investor. Dollars hit your bank. Everyone celebrates.

Then six months later, your CA quietly tells you:

“We never filed FC-GPR. We may have a FEMA problem.”

Under the Foreign Exchange Management Act, 1999 (FEMA), Indian companies that receive foreign investment must follow FDI reporting requirements through the RBI’s FIRMS portal. A key piece is Form FC-GPR, to report the issue of shares or certain instruments to non-residents. Reserve Bank of India+5TaxGuru+5India Briefing+5

The FDI reporting flow in simple steps

Exact details vary, but a typical equity round looks like this: ICSI+5TaxGuru+5https://www.ahlawatassociates.com+5

1. Before money comes in – Entity Master & KYC

   • Your company is registered on the RBI FIRMS portal (Entity Master).

   • Your Authorised Dealer (AD) bank is ready; they know an FDI remittance is expected.

   • Investor’s foreign bank sends a KYC letter (SWIFT-style format) to your AD bank.

2. Funds received

   • Money lands in your company’s FDI/normal current account via proper banking channels.

   • The bank issues a Foreign Inward Remittance Certificate (FIRC) or equivalent proof.

3. Board approves allotment

   • Within a reasonable time, your Board passes a resolution to allot shares/CCPS/other eligible instruments to the foreign investor, at a price backed by a valuation (if required).

4. FC-GPR filing – critical deadline

   • Within 30 days of the date of allotment, you file Form FC-GPR online through the FIRMS portal. companiesnext.com+4ICSI+4Reserve Bank of India+4

   • You attach:

     • Board resolution

     • Details of the instruments

     • Valuation certificate (where applicable)

     • FIRC / KYC docs

     • Shareholder’s agreement / subscription agreement details

Other forms (like FC-TRS for transfers between resident and non-resident, or ECB reporting for debt) may also apply, but FC-GPR is the main one for primary FDI. TaxGuru+2India Briefing+2

Why investors and DD teams care

Late or missing FC-GPR filings mean:

• FEMA non-compliance (regulatory risk)

• Potential compounding applications and penalties

• A messy FDI trail for future rounds

• Possible difficulties in getting exits or ESOP liquidity approved later

In serious deals, compliance law firms and later-stage investors will go through your entire FEMA file.

Common founder mistakes

• “We treated the foreign investor like a local one” – no FDI-compliant process, no FIRMS registration.

• Allotment done, but nobody tracked the 30-day FC-GPR deadline. companiesnext.com+4ICSI+4Reserve Bank of India+4

• Wrong instrument mix (e.g. issuing something not permitted under FDI rules for that sector).

• No valuation support for pricing.

• Using the wrong purpose code or bank product when receiving the funds.

• Poor internal documentation – board minutes, PAS-3, SSA/SHA not aligned with what’s filed.

Cleaning up late filings

If you’ve missed FC-GPR deadlines:

• Talk to a FEMA-savvy CA/CS/lawyer promptly.

• They may advise late filing with additional fees and, in some cases, compounding if the RBI deems it necessary. TaxGuru+2India Briefing+2

• In investor DD, narrate the issue as: “Identified, regularised, documented”.

Practical checklist for founders raising foreign capital

•  Is our company registered on the FIRMS portal (Entity Master)?

•  Has our AD bank received the investor bank’s KYC letter?

•  Are board approvals, valuation report and agreements in place?

•  Have we diarised the 30-day FC-GPR deadline from allotment, not from receipt?

•  Are all FC-GPR acknowledgements in the data room?

Reminder: This is educational, not a substitute for formal FEMA advice. Penalties can be stiff – involve professionals early.