Earlier, foreign direct investment (FDI) in an Indian company was reported with reserve bank of India (RBI) in two stages. First, at the time of inward remittance by way of filing form ARF. And at the time of allotment of shares (capital instruments) by way of form FC-GPR. This was done online through eBiz portal. There were separate forms for reporting FDI into LLP, transfer of shares between residents and non-residents and issues/transfer of convertible notes. W.e.f 1st September, 2018, all these have been integrated into Single master form (SMF). The Indian Government has taken this initiative to integrate reporting of foreign investment through a single form as a part of ‘Ease of doing Business’ initiative. A new filing platform FIRMS has come into place replacing eBiz platform.
To introduce this new filing system SMF, RBI came out with a circular in June 2018 requiring Indian companies to provide data input on total outstanding foreign investment as on date in form EMF. Link be given to the blog relating to EMF.
The new e-filing portal FIRMS at the moment facilitates filing of following transactions:
Essential features of SMF reporting:
FC-TRS: Filing by Individual:
Reporting in FC-TRS can be done by the transferor / transferee company resident in India. In case of transfer between individuals, reporting can be done by resident individual after registering as business user and in this case the authority letter must be in the name of the person who is reporting.
Has ARF been abolished?
As per the user manual provided by FIRMS RBI, separate filing of form ARF has been done away with and the same is now merged in form FC-GPR. But practically, form ARF should not be ignored completely. There is no uniform practice being followed by the banks. A few banks are still insisting for a clarification letter wherein main details of Form ARF shall be mentioned is to be signed by the authorized director and filed as an attachment along with form FC-GPR / FC-TRS.
FIRMS has reduced the number of stages through which any reporting goes by limiting its reply to: Pending for approval & Approval or Rejection unlike eBiz, where there were multiple stages with the option of resubmission. Hence it is to be noted that under FIRMS, now there is no option of resubmission, resending or attaching any clarification once the reporting is submitted. The Authorized Dealer bank has to take due precaution while approving or rejecting the form and it cannot take more than 5 working days for doing the same.
You may also like to read our other blogs on FDI Reporting: