INTEGRATION OF REPORTING STRUCTURE IN FDI RECEIVED IN INDIA

Recently, India had leapt a jump of 30 to be in top 100 Countries in ease of doing business. Another big move by government to ease the procedure to do business in India. RBI vide it notification no. RBI/2017-18/194  of A.P (DIR Series) Circular No.30 dated 7^th day of June, 2018 announced to simplify its reporting structure for FDI received in India. The objective of this is to integrate the extant of reporting structure of various types of foreign investment in India. A Single Master Form shall be hosted shortly.

ALL ABOUT SINGLE MASTER FORM (SMF)

SMF would be a single form to be filled online to reporting total foreign investment in an Indian entity {as defined in Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations 2017, dated November 7, 2017}, as also investment by persons resident outside India in an Investment Vehicle. This single form will be used for reporting Foreign Direct Investment against the following existing 9 Forms

1. FC-GPR- used for issue of capital instruments by an Indian Company to Person Resident Outside India (PROI)
2. FC-TRS- used for transfer of capital instruments between a PROI and a Person Resident in India
3. Form LLP-I- used for FDI in LLP through capital contribution and profit shares
4. Form LLP-II- used for Disinvestment /transfer of capital contribution and profit shares in LLP
5. Form ESOP- used for – issue of ESOPs / sweat equity shares/ shares against exercise of ESOP by an Indian company to an employee resident outside India
6. Form CN- -used for issue/transfer of convertible notes
7. Form DRR- used for issue/transfer of Depository Receipts
8. Form DI- used for reporting of downstream investment (indirect foreign investment) in a company or LLP
9. Form InVi- used for reporting of investment by a person resident outside India in an Investment vehicle

Single Master Form is a Form wherein all the above 9 form has been clubbed to single form. This form is divided in 2 parts:

1. General information: to be reported by every entity filling the Form wherein the following basic details about the reporting entity is to be filled :
   • CIN/LLPIN
   • PAN
   • Entry Route: Automatic/approval
   • Applicable Sectoral cap/Statutory Ceiling, if any
   • FDI received for Specific Project. If yes, then details about the project like Project location, State, District and Pin code
   • Status of shareholding pattern of foreign investment in Company/LLP  Pre and Post transaction
   • Declaration by Authorised representative
   • Certificate, in case of Company, by Company Secretary/Practicing Company Secretary and in case of LLP, Designated Partner/ Authorised Signatory of LLP
2. Section wise Reporting: Reporting entity need to fill relevant section as per their requirement

Along with this necessary attachments to be made as per the Section under which filling is to be processed.

PRE-IMPLEMENTATION OF SMF COMPLIANCES

Prior to the implementation of the SMF, Reserve Bank would provide an interface (Master Form) to the Indian entities, to input the data on total foreign investment in a specified format. The interface will be available on RBI website www.rbi.org.in from June 28, 2018 to July 12, 2018. Indian entities not complying with this pre-requisite will not be able to receive foreign investment (including indirect foreign investment) and will be non-compliant with Foreign Exchange Management Act, 1999 and regulations made thereunder.

The interface/Master Form is a 3 page form wherein following details need to be filled:

1. Whether it’s a Company/LLP/Start-up
2. CIN/LLPIN
3. Name of the entity
4. Date of incorporation
5. PAN
6. Registration Number, if any, allotted by RBI
7. Whether the entity is under investigation by Directorate of Enforcement/CBI or any other investigative agency for violation of FEMA, 1999
8. Address, E-mail Id, Telephone/Mobile No.
9. Listed/Unlisted entity
10. Main business with NIC Code
11. Details of Foreign Portfolio Investment as on the date of Filling
12. Investor type- FPI/NRI/Others
    • No of shares (on a fully diluted basis)
    • Percentage Holding
13. Foreign investment in company/ LLP
    • Paid up capital (on a fully diluted basis) of the company /total capital contribution in an LLP and face value of the shares _____________as on _____________________ (date)
14. Particulars, Number and Percentage

For better compliances, it is advisable to file the Interface before the due date. Once completed, it will become very easy for the Users to file the reporting instructions in SMF with RBI.