When a U.S. or Canadian investor puts money into an Indian company, the company has reporting duties to the Reserve Bank of India (RBI) that run on short clocks. FC-GPR filing covers fresh issue of shares to a non-resident, FC-TRS covers transfers of shares between residents and non-residents, and the annual FLA return covers outstanding foreign investment. Missing them is a FEMA contravention, not a mere tax lapse.
Which rules govern foreign investment in an Indian company?
Foreign investment in India is regulated by the Foreign Exchange Management Act, 1999 (FEMA) and the Non-Debt Instruments Rules, 2019. The RBI's Master Direction on Foreign Investment in India, updated up to June 15, 2026, explains how they work in practice for banks and companies. Its main points:
- Routes: the automatic route needs no prior approval. The government route needs approval through the Foreign Investment Facilitation Portal. Investors from countries sharing a land border with India, or with beneficial owners there, must use the government route.
- Sectors: foreign investment is prohibited in a short list, including lottery, gambling, chit funds, Nidhi companies and real estate business. Other sectors have caps and conditions.
- Instruments: equity shares, convertible debentures, preference shares and share warrants, each with pricing rules. Partly paid shares issued to non-residents must be fully called up within twelve months.
- Pricing: for an unlisted company, the valuation must follow an internationally accepted pricing methodology, certified by a Chartered Accountant, a SEBI-registered merchant banker or a practising cost accountant.
- LLPs: capital contributions follow Annex 5, in sectors with 100% automatic-route investment and no performance conditions.
How does FC-GPR filing work for foreign investment in an Indian company?
- Receive the funds correctly. The investor remits through banking channels into the company's bank account. The company keeps the bank evidence of inward remittance and the investor's KYC information.
- Issue the shares within 60 days. If the equity instruments are not issued within 60 days from receiving the consideration, the amount has to be refunded through banking channels or credited to the investor's repatriable account.
- Fix the price. Obtain the valuation certificate described above, and make sure the issue price is not below the fair value.
- Pass the corporate approvals. Board and shareholder resolutions, the allotment, and the statutory filings with the Registrar sit alongside the FEMA steps.
- File FC-GPR on FIRMS within 30 days of issue. The RBI's Master Direction repeats the 30-day clock when shares are issued against pre-incorporation expenses, and the Master Direction on Reporting prescribes the form and its attachments. Your authorised dealer (AD) bank and Chartered Accountant (CA) confirm the current document list.
- Keep the evidence. FC-GPR, valuation, remittance advice and the share register are all asked for later in due diligence.
Transfers, downstream investment and exits
Any sale of equity instruments between a resident and a person resident outside India is reported on FC-TRS, subject to pricing guidelines and the sectoral cap. The RBI's Master Direction ties both FC-GPR and FC-TRS to the compliance conditions for the transfer or issue. A first-level Indian company that makes downstream investment into a second-level company is responsible for making sure the downstream rules are followed. Because the reporting window for FC-TRS is set in the Master Direction on Reporting, confirm the current day count with your AD bank before you close a share sale.
The FLA return: what it is and who files
The annual return on Foreign Liabilities and Assets (FLA) is required from Indian companies, LLPs, SEBI-registered Alternative Investment Funds, partnership firms and similar entities that hold outstanding FDI and/or overseas direct investment at the end of March. The RBI's FAQ confirms:
- The due date is 15 July of the reporting year.
- Filing is on the FLAIR portal. A new entity registers, uploads the verification and authority letters, receives login details, and files.
- Provisional or unaudited financials may be used, then a revised return is filed after the entity requests permission through FLAIR.
- Non-filing is treated as a FEMA violation. The RBI cites FEMA Notification 395/2019-RB and A.P. (DIR Series) Circular No. 16 of 30 September 2022 for the consequences.
- Individual entity data are kept confidential and only aggregates are published.
Documents and information you need
- Bank evidence of the inward remittance and the investor's KYC
- Valuation certificate and the board-approved issue price
- Allotment resolution, share certificates and the updated register of members
- Investor's incorporation documents or passport, and its beneficial-ownership details
- Audited or provisional financials for the FLA return, and a record of any overseas direct investment
How the three countries' reports line up
| Event | India (RBI) | United States | Canada |
|---|---|---|---|
| Capital goes into the Indian company | FC-GPR within 30 days of issue | Form 926 and Form 5471 | T1134 for a foreign affiliate, T1135 for other foreign property |
| Shares change hands | FC-TRS | Gain reporting on the U.S. return | Capital gain on the T1 or T2 |
| Yearly status | FLA return by 15 July | Form 5471 with the return | T1134 or T1135 with the return |
The Indian company, the U.S. owner and the Canadian owner each file their own forms, so the same share issue appears three times. Our foreign asset reporting deadlines comparison keeps the dates side by side, and the private limited company compliance guide shows how the FLA fits into the ROC year.
A worked example
An Aurora investor sends USD 250,000 to a Pune company on 3 November 2026. Shares must be issued by 2 January 2027. The board allots on 15 December 2026, so FC-GPR is due by 14 January 2027. On 15 July 2027 the company files its FLA return because it ended March 2027 with foreign investment outstanding. If the investor later sells part of the stake to an Indian co-founder, that sale is reported on FC-TRS.
Mistakes to avoid
- Receiving money into a director's personal account
- Letting the 60-day issue window lapse without a refund
- Skipping the valuation certificate or using a price below fair value
- Forgetting the FLA return in years with no new investment
- Overlooking the land-border restriction on a complex investor structure
How we can help
From Aurora, Illinois, we handle the U.S. side of an Indian investment: U.S. information returns, treaty planning and the funding structure. We coordinate with your Indian CA and AD bank so FC-GPR, the books and the U.S. return all show the same numbers. We do not file with the RBI. See cross-border tax and foreign account and asset reporting. Browse the full India: Tax and Compliance section.
Frequently asked questions
What is FC-GPR?
It is the report an Indian company files with the RBI after issuing shares or other equity instruments to a person resident outside India.
What is the deadline for FC-GPR filing?
Within 30 days of issuing the shares, which must themselves be issued within 60 days of receiving the money.
Who must file the FLA return and by when?
Entities with outstanding FDI or overseas direct investment at the end of March file by 15 July on the FLAIR portal.
Is FC-TRS needed when two shareholders transfer shares?
If one party is a resident and the other a non-resident, yes. Transfers between two residents are not FEMA reports.
Can late FEMA reporting be fixed?
Usually, but through the RBI's regularisation route, so approach your AD bank and CA promptly.
Official sources
- RBI: Master Direction on Foreign Investment in India (updated up to June 15, 2026)
- RBI: Master Direction on Reporting under FEMA, 1999 (page)
- RBI: FAQs on the annual FLA return (updated July 1, 2026)
- RBI: FAQs on the FLAIR portal
- RBI: List of RBI reporting portals (FIRMS, FLAIR)
This page summarizes public guidance in plain language. If anything here differs from the official source, the official source controls.
General information only. It is not tax, legal, accounting or immigration advice for your situation, and rules change; confirm the current rules with the official source or a licensed professional in the relevant country.