Overview
The Foreign Exchange Management Act, 1999 (FEMA) governs transactions between residents and non-residents. Foreign investment into India, investment by Indian entities abroad and external borrowings each come with pricing rules, sectoral conditions and reporting to the RBI through authorised dealer banks.
Most reporting is done on the RBI's FIRMS portal. Late or missed reporting can be regularised by paying a late submission fee, and other contraventions through compounding.
Who needs this service
Legal and regulatory framework
- Foreign Exchange Management Act, 1999
- FEM (Non-debt Instruments) Rules, 2019
- FEM (Overseas Investment) Rules and Regulations, 2022
- RBI Master Directions on foreign investment, ECB and reporting
Scope of services
Foreign direct investment
- Sectoral cap and entry route analysis
- Pricing guidelines and valuation certificates
- FC-GPR for share allotment and FC-TRS for transfers
- Annual Return on Foreign Liabilities and Assets (FLA)
Overseas investment
- ODI structuring and bank filings
- Annual performance reports
Borrowings
- ECB framework and monthly ECB-2 returns
Regularisation
- Late submission fee computation
- Compounding applications
How the engagement works
- Transaction reviewRoute, pricing and documents.
- Bank and RBI filingsThrough the AD bank and FIRMS portal.
- AnnualFLA and other annual returns.
- RegularisationLSF or compounding where needed.
Documents typically required
Key forms and due dates
| Item | Timeline |
|---|---|
| FC-GPR | Within 30 days of allotment |
| FC-TRS | Within 60 days of transfer or receipt of consideration |
| FLA return | 15 July |
| ECB-2 | Within 7 working days after month end |
Deliverables
- Filed forms on FIRMS
- Valuation and compliance certificates
- Compounding applications
The scope of each engagement is agreed in writing and depends on the nature, size and regulatory requirements of the entity.
Frequently asked questions
Is RBI approval needed for foreign investment?
Most sectors are under the automatic route, which needs no prior approval but does need reporting. Some sectors need government approval.
What if FC-GPR was filed late?
The delay can be regularised by paying a late submission fee, subject to the conditions in the regulations.