Form FC-GPR: reporting issue of shares to foreign investors

When is FC-GPR required?

Whenever an Indian company issues equity shares, compulsorily convertible preference shares, compulsorily convertible debentures or share warrants to a non-resident under the FDI route, it must report the issue in Form FC-GPR. This includes fresh capital raised from a foreign parent, angel or venture investor, and shares issued against eligible non-cash consideration where permitted.

The consideration must be received through banking channels or from an NRE/FCNR or escrow account. Shares must be allotted within 60 days of receipt, failing which the money must be refunded within 15 days after that, unless RBI permits otherwise.

How the FIRMS portal works

FC-GPR is filed in the Single Master Form on RBI's FIRMS portal. The company first creates an Entity User, completes the Entity Master with its foreign investment details, and then registers a Business User who files the forms.

Once submitted, the AD bank that received the remittance reviews the form. It may approve, reject or ask for changes. After the AD bank's approval, RBI's system generates an acknowledgement, which is the company's proof of compliance.

Documents needed

Pricing must be at or above fair value computed by an internationally accepted pricing method. A valuation report that is stale or uses a non-standard method is a frequent reason for rejection.

• Foreign Inward Remittance Certificate (FIRC) or bank statement showing receipt
• KYC report of the foreign investor from the AD bank
• Board resolution approving the allotment
• Valuation certificate by a SEBI-registered merchant banker or practising chartered accountant, as applicable
• Certificate from a company secretary on compliance with the Companies Act and FEMA
• Declaration by the authorised representative, and MoA where shares go to subscribers
• Pre- and post-issue shareholding pattern

Late filing and the LSF

Late reporting can be regularised by paying a Late Submission Fee (LSF) under RBI's A.P. (DIR Series) Circular No. 16 of 30 September 2022. For transaction (flow) returns the LSF is ₹7,500 plus 0.025% of the amount involved multiplied by the years of delay, capped at the amount involved. The LSF route is available only up to three years from the due date; beyond that the matter goes to compounding.

Each delayed return is calculated separately, so a company that delays several allotments faces several LSFs. Pay the LSF within 30 days of RBI's advice; otherwise the advice lapses and the calculation restarts.

Common mistakes

Typical errors include filing before the PAS-3 return of allotment is ready, FIRC names not matching the investor, using KYC from a bank other than the one that received funds, wrong sector or NIC code, and missing sectoral caps or government approval requirements. Allotting shares more than 60 days after receipt is a separate contravention. Companies also sometimes forget Form FC-GPR for conversion of CCPS or CCDs into equity. Conversion is generally reported again within 30 days, so check the current Master Direction.

Step by step

1. 1Receive funds

   Get the investment into the company's bank account and obtain FIRC and KYC.

2. 2Value and allot

   Obtain the valuation certificate and allot shares within 60 days of receipt.

3. 3File PAS-3 with ROC

   File the return of allotment under the Companies Act.

4. 4Prepare Entity Master

   Register Entity and Business Users on FIRMS if not done.

5. 5File FC-GPR

   Complete the Single Master Form and upload documents within 30 days of allotment.

6. 6Track AD bank review

   Respond to queries and download the acknowledgement once approved.