Documentation for Foreign Direct Investment (FDI)

Reporting
Reporting requirements under FDI scheme as per extant RBI
guidelines
- Indian companies are required to report the details of the amount of
consideration received for issuance of FDI instruments. Advance
reporting format along with KYC report on the Non-resident investor
need to be reported through Authorised Dealer Category I Bank (AD
Bank) to RBI within 30 days from the date of receipt of consideration.
- Indian Companies are also required to issue the FDI instruments /
refund the advance consideration to the Non-resident investor within
180 days from the date of the receipt of consideration. In case of issue
of FDI instrument the same is required to be reported in form FC-GPR
through AD Bank to RBI within 30 days from date of issue of
instruments.
Documentation for reporting of inward remittance received for
issuance of FDI Instruments
- Advance reporting form (Annexure II) duly filled & signed by the client
- Certified copies of FIRC/s, evidencing receipt of remittance. Purpose
of FIRC should be in line with the transaction.
- KYC report on Non-resident investor from the overseas bank remitting
the amount
Documentation for form FC-GPR Issuance of FDI instruments
- Form FC-GPR (Annexure I) duly filled & signed by Managing
Director/Director/Secretary.
- Certificate from company secretary as per guidelines
- Certificate from Category I Merchant Banker or Chartered accountant
for valuation of FDI Instrument as per the RBI guidelines
- Certified copies of FIRCs
- Unique Identification numbers allotted for all the remittances received
as considerations for issuance of shares/debentures. In absence of the
same, RBI acknowledged copy of the advance reporting submitted
earlier is required.
Common discrepancies in Advance Reporting form noticed by the
AD Banks (Annexure II)
- Annexure II incompletely filled: Annexure II needs to filled correctly
with the relevant details. No field should be left blank.
- Missing FIRC/s copies: Please attach the attested copies of FIRC/s
with the Annexure II.
- Incorrect purpose in FIRC: Customers should advise the remitter to
correctly state the purpose of remittance as Application money for
equity shares/preference shares/debentures under Automatic/Approval
Route.
Common discrepancies in form FC-GPR (Annexure I)
- Description of main business activity & NIC code: Indian company
(beneficiary) needs to ensure that description of main business activity
mentioned in the form is in line with the activity mentioned in the
memorandum of association. NIC code should be as per attach list.
- Date of reporting of inflows (refer point 4 (d) of form FC-GPR): This is
date of reporting to RBI i.e. date of RBI acknowledgement on the
Annexure II
- Valuation method: Discounted Cash Flow (DCF) method needs to be
followed for valuation of shares of unlisted Indian companies. DCF
method needs to be followed even for the newly formed companies. In
case of listed companies price of shares issued shall be on the basis of
SEBI guidelines.
- Amount mentioned on FIRCs does not tally with the total amount of
FDI instrument issued: This may be due to issuance of FDI instrument
for partial amount of application money received. Client needs to
provide clarification on status of balance funds.