Comprehensive FDI compliance services for inbound foreign investment. Expert FC-GPR filing, FC-TRS filing, downstream investment compliance, and FDI structuring advisory.
India is one of the most attractive destinations for foreign direct investment, driven by its large market, young demographics, liberalized FDI policy, and growing integration with the global economy. The FDI policy framework in India is governed by the Foreign Exchange Management Act, 1999 (FEMA), the FDI policy issued by the Department for Promotion of Industry and Internal Trade (DPIIT), and various RBI Master Directions and circulars. FDI can flow into India through two routes — the automatic route, where no prior government approval is required, and the government route, where prior approval from the concerned ministry or department is mandated.
At ComplianceBridge Advisory, we provide end-to-end FDI compliance services that cover the entire lifecycle of foreign investment in India. From pre-investment structuring and regulatory mapping to post-investment reporting and ongoing compliance, our team of qualified Company Secretaries and regulatory professionals ensures that your FDI transaction is executed in full compliance with all applicable laws and regulations. We work with startups seeking angel and venture capital funding, mid-size companies attracting strategic investors, and large corporates executing complex cross-border transactions.
FDI compliance involves multiple layers of regulatory requirements — from pricing guidelines and sectoral caps to reporting obligations and post-transaction compliance. Non-compliance can result in penalties, compounding proceedings, and complications in future fundraising or exit transactions. Our preventive approach to FDI compliance ensures that every aspect of the investment is properly documented, reported, and maintained, building a clean compliance record that supports your business objectives.
Understanding the difference between the two FDI routes is critical for structuring your investment correctly and avoiding regulatory complications.
Under the automatic route, foreign investment can be made without prior approval from the RBI or any government ministry. The investor or the Indian company simply needs to comply with the reporting requirements and sectoral conditions. Most sectors in India are now under the automatic route, making it the most common pathway for FDI.
Under the government route, prior approval from the concerned ministry or department is required before making the investment. This route applies to sectors that are restricted or have specific policy considerations. The application is filed through the Foreign Investment Facilitation Portal (FIFP), and approval is granted based on the sectoral policy and conditions.
FC-GPR is the primary form for reporting FDI in Indian companies. Timely and accurate filing is essential to maintain compliance.
FC-GPR must be filed within 30 days of allotment of shares in the following cases: (a) Allotment of shares to a non-resident under the FDI scheme, (b) Conversion of external commercial borrowings (ECB) into equity, (c) Conversion of foreign currency convertible bonds (FCCBs) into equity, (d) Allotment of shares under the scheme of arrangement approved by NCLT, and (e) Issue of equity shares under the swap ratio in a scheme of merger or amalgamation. The form must be filed through the AD Category-I bank and is submitted on the FIRMS portal of the RBI.
The following documents must be submitted along with the FC-GPR form: (a) Copy of the board resolution allotting shares, (b) Copy of the shareholder agreement, (c) Certificate from the Company Secretary certifying compliance with FDI conditions, (d) valuation certificate from a registered valuer (for unlisted companies), (e) share allotment certificate, (f) FLA details if applicable, and (g) any other document as may be required by the AD bank. All documents must be properly certified and submitted through the designated AD bank.
Late filing of FC-GPR attracts compounding proceedings before the RBI. The compounding amount is determined based on the amount involved and the delay period. In addition to the compounding amount, the late filing may also result in complications during future fundraising, exit transactions, or regulatory inspections. It is therefore critical to ensure timely filing of FC-GPR within the 30-day deadline.
FC-TRS is required when shares are transferred between a resident and a non-resident, or vice versa.
When a non-resident transfers shares of an Indian company to a resident, FC-TRS must be filed within 60 days from the date of transfer. The transfer must comply with the pricing guidelines — the shares must be priced at fair market value as determined by a registered valuer. The buyer must also comply with the KYC requirements and the source of funds must be established.
When a resident transfers shares of an Indian company to a non-resident, FC-TRS must be filed within 60 days from the date of transfer. The transfer must comply with the FDI pricing guidelines, and the seller must ensure that the transaction is in compliance with the sectoral cap and other conditions applicable to the FDI route under which the original investment was made.
Downstream investment refers to investment by an Indian company with FDI in another Indian company, subject to specific compliance requirements.
Downstream investment occurs when an Indian company that has received FDI makes an investment in another Indian company (whether by way of equity, compulsorily convertible debentures, or compulsorily convertible preference shares). This creates a chain of foreign investment that must be tracked and reported to the RBI. The downstream entity is treated as an entity with indirect foreign investment and must comply with the same sectoral caps and conditionalities that apply to the parent entity.
The Indian company making the downstream investment must report the investment to the RBI through the designated AD bank. The reporting must be completed within the prescribed timeline, and the downstream entity must maintain all records supporting the compliance. The downstream entity must also ensure that its activities fall within the permitted sectoral caps and that any conditions attached to the original FDI are met.
Downstream entities must establish a robust compliance framework that includes tracking the foreign investment chain, maintaining records of all upstream and downstream investments, ensuring compliance with sectoral caps, and filing all required returns with the RBI. Our team helps downstream entities set up this framework and provides ongoing compliance support to ensure continued adherence to regulatory requirements.
We follow a systematic approach to ensure your FDI transaction is executed and reported in full compliance with all applicable regulations.
We analyze the proposed investment structure, identify the applicable FDI route (automatic or government), map sectoral caps and conditions, and recommend the optimal structure for the transaction.
We prepare all required documents including board resolutions, shareholder agreements, valuation certificates, and compliance certificates, ensuring all documents meet RBI and FEMA requirements.
We file FC-GPR, FC-TRS, and other applicable forms through the AD bank within the prescribed timelines, ensuring accurate data entry and proper documentation support.
We track all ongoing compliance requirements including FLA returns, downstream investment reporting, and regulatory changes, providing proactive advisory to maintain continuous compliance.
Our team has deep expertise in FDI compliance, having handled hundreds of inbound investment transactions across diverse sectors including technology, manufacturing, healthcare, and financial services.
From pre-investment structuring to post-investment compliance, we provide comprehensive support throughout the FDI lifecycle, ensuring no compliance gap at any stage.
A clean FDI compliance record builds investor confidence and facilitates future fundraising. Our thorough approach ensures your compliance record is impeccable.
We coordinate directly with AD Category-I banks to ensure smooth filing and processing of all FDI-related forms and applications, leveraging our strong banking relationships.
Comprehensive foreign exchange regulatory compliance covering FDI, ODI, ECB, and cross-border transactions.
Company registration services for foreign investors setting up operations in India.
Share transfer advisory including cross-border transfers and FC-TRS compliance.
Foreign Direct Investment (FDI) in India is regulated under the Foreign Exchange Management Act (FEMA), 1999 and the FDI policy issued by the DPIIT. FDI can be made through the automatic route or the government route, depending on the sector and the nature of the investment.
FC-GPR is the form to be filed with the RBI within 30 days of allotment of shares to a foreign investor. It is required for all instances of FDI in Indian companies, including initial allotment, conversion of ECB into equity, and allotment under the scheme of arrangement.
For unlisted companies, shares must be issued to non-residents at a price not less than the fair market value determined as per internationally accepted pricing methodologies, typically the DCF method. For listed companies, the pricing must comply with SEBI regulations.
Downstream investment refers to investment made by an Indian company with FDI in another Indian company. Such investments must be reported to the RBI and must comply with the same FDI conditions that apply to the parent entity.
The Annual Return on Foreign Liabilities and Assets (FLA) must be filed by all Indian companies that have received FDI or made ODI. It is due by June 30 every year.
Our team of qualified professionals is ready to assist you with all aspects of FDI compliance. Contact us for a comprehensive review of your foreign investment transactions.
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