FIRC filing for investment recieved from NRO account

others 109 views 3 replies
User Avatar

3 Points Joined October 2019

Sorry, wasn't sure which category to post this under. Our private limited company has recieved investment (equity) from an NRI. The money was recieved via neft from their NRO account. Do we need to file FIRC with the RBI for the same? 

0 Reply Share Follow
On 15 March 2025 at 09:47 Report
Replies (3)
User Avatar

Master in Accounts & high court Advocate
8827 Points Joined December 2011

When a private limited company receives investment (equity) from a non-resident Indian (NRI) via NEFT from their Non-Resident Ordinary (NRO) account, there are specific reporting requirements. FIRC (Foreign Inward Remittance Certificate) Filing:

1. *Not Required*: Since the investment is received from an NRI's NRO account, which is an Indian rupee-denominated account, it's not considered a foreign inward remittance. Therefore, FIRC filing with the RBI is not required. 

2. *FC-GPR (Foreign Currency - General Permission Route) Reporting*: However, the company needs to report the investment in the FC-GPR form, which is filed with the Authorized Dealer (AD) bank. 

This form is used to report investments received under the automatic route. Other Reporting Requirements:

 1. *RBI's FEMA (Foreign Exchange Management Act) Reporting*: The company may need to comply with FEMA reporting requirements, such as filing the FLA (Foreign Liabilities and Assets) return.

 2. *Income Tax Reporting*: The company must report the investment in its income tax returns and comply with other tax regulations.

Reply
On 15 March 2025 at 13:54
User Avatar

3 Points Joined October 2019

Thank you! So where we are stuck is - for FC-GPR we need the FIRC certificate from the bank right? The bank is saying they never received any foreign remittance so FIRC can't be given. 🤔

Reply
On 15 March 2025 at 15:35
User Avatar

Master in Accounts & high court Advocate
8827 Points Joined December 2011

The bank's response is correct because the investment was received from the NRI's NRO account, which is an Indian rupee-denominated account, and not a foreign remittance. Alternative Approach:

1. *Certification from the Bank*: Instead of the FIRC, you can request the bank to provide a certification or a letter confirming that the investment amount was received from the NRI's NRO account.

 This certification can be used as supporting documentation for the FC-GPR reporting.

2. *FC-GPR Reporting without FIRC*: You can file the FC-GPR form with the AD bank, explaining the situation and attaching the bank's certification or letter.

 The AD bank may accept this documentation and process the FC-GPR reporting. Consultation with the Bank and AD Bank: It's recommended to have a discussion with both the bank that received the investment and the AD bank to: - Confirm their requirements and procedures - Ensure they accept the alternative documentation -

 Clarify any additional documentation or information needed By following this approach, you should be able to complete the FC-GPR reporting and fulfill the necessary compliance requirements.

Reply
On 15 March 2025 at 17:54


CCI Pro

Leave a Reply

Post Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Recent Threads

More recent discussions | Post

Related Threads
Loading