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.

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

• 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