Integrated Reporting of Foreign Investment in India
June 20, 2018 by Ankita and Komal Sharma
Single Master Form (SMF):
The present system of reporting foreign investments involves the filing of various forms at ebiz (eBiz Portal) or various other platforms. New directions have been issued by RBI vide Circular No. 30 on 7th June 2018 (New RBI Circular) which lays down the agenda for implementing the reporting of foreign investments through a single form called SMF. This Single Master Form shall integrate the foreign indirect (downstream) investment as well. Major takeaways of the Circular can be read at New Integrated Form Of Reporting FDI: 7 Point Summary
Applicants: Integrated form for reporting FDI is applicable on all investment vehicles including Companies and LLPs.
Purpose: To Integrate the reporting of foreign investments
SMF is proposed to be introduced to integrate the reporting of various types of foreign investment in India. It is an online reporting facility subsuming 8 out of 12 reporting requirements, like:
- Form FC-GPR (allotment of shares)
- Form FC-TRS (Share Transfer)
- Form LLP-I (receipt of funds)
- Form LLP-II (disinvestment/transfer)
Forms outside the purview of SMF:
- Advance Remittance Form (ARF)
- Annual Return on Foreign Liabilities and Assets (FLA)
The above forms are likely to continue to be filed in the manner they are currently filed with the RBI.
Availability of SMF:
Once notified, the final form will be available in the Master Direction-Reporting under FEMA, 1999. (Format of SMF can be viewed at Format of SMF)
RBI in its circular has also mandated the filing of Entity Master Form (EMF) which is a PREREQUISITE of Single Master Form.
ENTITY MASTER FORM (EMF):
The new reporting regime shall commence with one-time reporting form EMF. EMF is an interface provided to Indian Entities like Company and LLP that have existing foreign investment (direct or indirect). EMF is a one-time filing requirement to provide data input on total outstanding foreign investment as on date.
A fifteen days window will be provided by RBI on its website during which time these entities can submit EMF.
Availability of EMF:
On RBI website from June 28, 2018, to July 12, 2018. (Format of EMF can be viewed at Format of EMF)
Some basic details that are to be filed on EMF:
- Particulars of the Company/LLP/Investment Vehicle
- Business Activity Details
- Foreign Holding Percentage
Consequences of not filing EMF during this period:
Noncompliance of this prerequisite by Indian entities will disable them from receiving any type of foreign investment and will also be considered as non-compliance under Foreign Exchange Management Act, 1999 and regulations made thereunder.