RBI/FEMA Compliance – Foreign Exchange Management Act,1999
Foreign Exchange Management Act, 1999 (FEMA) was introduced to ensure smooth external transactions, maintaining a healthy foreign exchange market, and encourage the importance of the balance of payments.
Mandatory compliances under FEMA
- Annual Return on Foreign Liabilities and Assets - Every Indian Resident company that has made a Foreign Direct Investment (FDI) in the preceding year, including the current year, must submit the Foreign Liabilities and Assets (FLA) Return. If no such investment is made, then the company is not under any obligation to submit the FLA. Such a return must be submitted every year.
- Annual Performance Report - This report is to be submitted by a Resident individual who has made an Overseas Direct Investment (ODI). It is to be provided in Form ODI Part II to the AD (Authorised Dealer) bank regarding Joint Venture or Wholly Owned Subsidiaries outside India on or before 31st December every year.
- External Commercial Borrowings (ECB) - All borrowers must report all ECB transactions to the RBI through an AD Category – I Bank every month in the Form ‘ECB 2 Return’.
Following forms are to be filled and submitted.
- Advance Remittance Form - An Indian company that receives investment outside India for the issue of shares or other eligible securities under the FDI scheme must report all the details of the amount of consideration to the concerned Regional Office of the Reserve Bank of India through its AD category I bank within 30 days from the date of issue of shares.
- Form FC- GPR - The Indian company that receives foreign investment and allots shares against such investment should file such allotment with the RBI. The company must provide details of allotment in the Form FC- GPR (Foreign Currency – Gross Provisional Return) within 30 days of allotment to the RBI.
- Form FC- TRS - This form must be filed by the shareholder resident outside India or resident Indian when they transfer the shares of the Indian company from a resident to non-resident Indian or vice versa.
- Form ODI - A resident Indian individual who makes an overseas investment is required to submit Form ODI. Share certificates or any other documentary evidence received for investment in a foreign Joint Venture or Wholly owned subsidiary must be submitted to the designated AD within 30 days.
The foreign transactions under FEMA Compliance are categorized into two categories –
- 1. Capital account transactions: The capital Account consists of all capital transactions.
- 2. Current account transactions. The current account comprises the trade of goods or services. Current Account transactions are those transactions that involve inflow and outflow of money to and from the country/countries during a year, due to the trading/rendering of commodity, service, and income. In addition to the above, some transactions are specifically prohibited by RBI/Govt. of India.
How S.K. Agrawal & Co. Helps in FEMA Compliances?
With S.K. Agrawal & Co., you can able to fulfill FEMA Compliances seamlessly. We can help in FEMA Compliance in just 4 simple steps:
Step 1: Confirmation Mail Acceptance of our Proposal
Send confirmation mail at our email id regarding acceptance of our Proposal for FEMA Compliance. You can request a callback or directly call to our expert on phone number provided at our website. Our experts will contact you and clear all your queries.
Step 2: Send the Documents on our Email Id
Send documents/information on our email Id for FEMA Compliance
The FEMA Compliance from S.K. Agrawal & Co. is completely online and thus, you can save time and money as you need not have to visit our office. If you want to visit to our office you are most welcome.
Step 3: Document Verification by our Experts Team
Our expert team will verify the documents Submitted by you.
Step 4: Our Experts Team will submit Information/Document to the concerned Authority for Compliance of FEMA.
Submission of Document/Information to the concerned Authority.
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