A Private Company got subscripttion from a NRI for Rs. 65000/-.at the time of incorporation, So now is it necessary under FEMA to intimate RBI ,within 30 days of the receipt of the subscripttion amount and then filing of FCGPR Part A.???
Plzz suggest its urgent.
Regards
Priya Sharma
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Subscription of shares by NRI-plz suggest
Replies (9)
Dear Priyanka,
yes you are right but first of all plz check that This investment not come under prohibited sector.
Then inform to RBI with in precsribed limit and within 6 month u have to allot the shares and after allotment within 30 days file form FC-GPR with AD Bank.
The main business of the Company is advertising abroad,wireless transfers.....
Priya
yes,
its not prohibited.
Dear Memeber
A note on FDI compliances is as under :
Foreign Exchange Management Act
Foreign Investments in India is governed by Sub Section (3) of Section 6 of the Foreign Exchange Management Act, 1999 read with Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended from time to time. Company would be required to adhere to following compliances regarding FDI:
1. ALLOTMENT/REFUND
As per FEMA Notification no. FEMA 170/2007-RB dated November 13, 2007, Company receiving FDI in India should allot equity shares or refund the money within 6 (Six) months from the date of receipt of investment from outside India.
2. REPORTING OF FDI
A. Reporting of inflow:
Company would be required to report the details of the inflow to the Authorised Dealer Banker within 30 days from the date of receiving investment from outside India for issuing shares under the FDI Scheme. Details to be reported are stated hereunder:
(i) Covering letter;
(ii) FIRC Reporting Form;
(iii) KYC signed by AD Bank; and
(iv) Foreign Inward Remittance Certificate (FIRC).
B. Reporting of Allotment
After allotment of shares, the company should file Form FC-GPR – Part A within 30 days from the date of allotment of shares. Equity instruments must be issued within 180 days from receipt of funds.
Part A of Form FC-GPR has to be duly filled up and signed by the Authorised Signatory and submitted to the Authorised Dealer of the company, who will forward it to the Reserve Bank.
While forwarding the Form, , the following documents has to be attached by the company:
(i) A certificate from the Company Secretary of the company certifying that
(a) all the requirements of the Companies Act, 1956 have been complied with;
(b) terms and conditions of the Government approval, if any, have been complied with;
(c) the company is eligible to issue shares under these Regulations; and
(d) the company has all original certificates issued by authorised dealers in India evidencing receipt of amount of consideration;
(ii) A certificate from Statutory Auditors or Chartered Accountant indicating the manner of arriving at the price of the shares issued to the persons resident outside India. This certificate should be obtained before making allotment of shares in Board Meeting to ensure that allotment price adheres to pricing guidelines under FDI policy.
(iii) Certified True Copy of Board Resolution.
(iv) Foreign Inward Remittance Certificate (FIRC).
C. Yearly Reporting
Company should file Part-B of FC-GPR on an annual basis with the Director, Balance of Payment Statistical Division, Department of Statistical Analysis & Computer Services, Reserve Bank of India, C9, 8th Floor, Bandra-Kurla Complex, Bandra (E), Mumbai – 400051.
This is an annual report to be submitted by 31st of July every year, pertaining to all investments by way of direct investments/retained earnings in the company made during the preceding financial year (April to March).
3. ISSUE PRICE
Price of shares issued to Foreign Investor under the FDI Scheme should be done by a Chartered Accountant in accordance with the guidelines issued by the erstwhile Controller of Capital Issues. Board of Directors should ensure that allotment price adheres to pricing guidelines under FDI Scheme.
Hope it serves your purpose.
regards
Gaurav Jain
gaurav @ rsj.co.in
Thanks a lot to al.....But I have a little doubt.I remember that MOA subscripttion by NRI was exempted from the intimation to RBI.
Is it correct??
Regards
Priya Sharma
Dear Sharma,
Exemption of reporting to RBI if NRI subscribe to MoA is there if he subscribe the shares with Indian Currency Available with him during his present in India.
If NRI brings any Foreign Exchange specifically as FDI and subscribes MoA then there is no exemption in reporting toRBI is available.
Dear Priya,
Can you pls send me draft documents of the same as i think u did the same.
pls treat it on urgent basis.
hi friends, can any body know about that the remitter of fund and allotte of shares should be same person as per FEMA / RBI or any other rules?
Falling under automatic route.
Get your FIRC issued
cover letter-
Certified Board Resolution
file FC - GPR with AD category I withing 30 days of allotment
further docs. required are -
CA certi.
CS certi.
DCF method to be followed
Make sure your bank has enough knowledge about it, as many times there little knowledge leads to confusion and give rise to lot more paper work.
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