\n| Reporting trigger<\/td>\n | Issue\/allotment of equity instruments<\/td>\n | Transfer of equity instruments<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n The easiest way to distinguish the two is to ask: Are new shares being issued, or are existing shares changing hands?<\/p>\n <\/span>When Does FC-GPR Apply?<\/b><\/strong><\/span><\/h2>\n<\/span>1. Fresh Issue of Equity Shares<\/b><\/strong><\/span><\/h2>\nSuppose a company receives foreign investment and allots new equity shares to the overseas investor. Since the company is creating and issuing new securities, FC-GPR would generally be the relevant reporting form.<\/p>\n <\/span>2. Issue of Compulsorily Convertible Instruments<\/b><\/strong><\/span><\/h2>\nWhere eligible compulsorily convertible preference shares or debentures are issued to a person resident outside India and treated as equity instruments under the applicable FEMA framework, FC-GPR reporting may apply.<\/p>\n <\/span>3. Rights Issue to a Non-Resident Shareholder<\/b><\/strong><\/span><\/h2>\nWhere an existing non-resident investor receives new equity instruments through an eligible rights issue, the transaction may fall under FC-GPR reporting because new instruments are being issued.<\/p>\n <\/span>4. Bonus Issue to a Non-Resident<\/b><\/strong><\/span><\/h2>\nCertain bonus issues to non-resident shareholders can also fall within FC-GPR reporting requirements.<\/p>\n <\/span>5. Conversion Into Equity Instruments<\/b><\/strong><\/span><\/h2>\nWhere an eligible instrument is converted, and fresh equity instruments are issued to a non-resident investor, the transaction may require FC-GPR reporting depending on the nature of the conversion and applicable regulations.<\/p>\n <\/span>When Does FC-TRS Apply?<\/b><\/strong><\/span><\/h2>\n<\/span>1. Resident Sells Shares to a Non-Resident<\/b><\/strong><\/span><\/h2>\nIf a resident shareholder sells existing shares of an Indian company to a person resident outside India, the transaction may require FC-TRS reporting. The company is not issuing new shares in this case. Only ownership of existing securities changes.<\/p>\n <\/span>2. Non-Resident Transfers Shares to a Resident<\/b><\/strong><\/span><\/h2>\nWhere a foreign shareholder transfers existing equity instruments to a resident, FC-TRS reporting may also apply, subject to the applicable conditions and exemptions.<\/p>\n <\/span>3. Transfer Between Certain Categories of Non-Residents<\/b><\/strong><\/span><\/h2>\nSome transfers involving non-resident investors with different repatriation statuses may also be reportable through FC-TRS.<\/p>\n <\/span>4. Secondary Sale of Shares<\/b><\/strong><\/span><\/h2>\nIf a foreign investor buys shares from an existing shareholder instead of subscribing to newly issued shares, the transaction is a secondary transfer. This generally points toward FC-TRS rather than FC-GPR.<\/p>\n <\/span>A Simple Decision Test<\/b><\/strong><\/span><\/h2>\n<\/span>Question 1: Is the Company Issuing New Equity Instruments?<\/b><\/strong><\/span><\/h2>\nIf yes, FC-GPR may apply. If no, move to the next question.<\/p>\n <\/span>Question 2: Are Existing Shares Being Transferred?<\/b><\/strong><\/span><\/h2>\nIf yes, FC-TRS may apply.<\/p>\n <\/span>Question 3: Who Is the Transferor and Who Is the Transferee?<\/b><\/strong><\/span><\/h2>\nCheck whether the parties are resident to non-resident, non-resident to resident, or another category where repatriation status affects reporting.<\/p>\n <\/span>Question 4: Is the Transaction Covered by a Specific Exemption?<\/b><\/strong><\/span><\/h2>\nNot every transfer involving a non-resident necessarily requires FC-TRS. The exact transaction structure should therefore be reviewed before filing.<\/p>\n <\/span>Example 1: Fresh Foreign Investment<\/b><\/strong><\/span><\/h2>\nA company wants to raise capital from an overseas investor. The company issues 50,000 new shares to the investor.<\/p>\n Nature of transaction: Fresh issue<\/p>\n Likely reporting: FC-GPR<\/p>\n The foreign investor is subscribing directly to new equity instruments issued by the company.<\/p>\n <\/span>Example 2: Existing Shareholder Sells Shares<\/b><\/strong><\/span><\/h2>\nA resident promoter sells a portion of existing shares to a foreign investor. No new shares are created.<\/p>\n Nature of transaction: Transfer of existing shares<\/p>\n Likely reporting: FC-TRS<\/p>\n This is a secondary transfer rather than fresh capital issuance.<\/p>\n <\/span>FC-GPR Reporting Timeline<\/b><\/strong><\/span><\/h2>\nFC-GPR is generally required to be filed within 30 days from the date of issue of equity instruments where the transaction falls within the reporting requirement.<\/p>\n Businesses should not confuse the date of receipt of foreign funds, date of Board approval, date of allotment and date of issue of equity instruments. The applicable reporting timeline should be calculated using the correct trigger event.<\/p>\n <\/span>FC-TRS Reporting Timeline<\/b><\/strong><\/span><\/h2>\nFC-TRS reporting is linked to the transfer transaction and applicable consideration timeline.<\/p>\n Because transaction structures can vary, the relevant filing timeline should be checked against the current RBI reporting framework before submission.<\/p>\n <\/span>Documents Commonly Reviewed for FC-GPR<\/b><\/strong><\/span><\/h2>\n |