The Reserve Bank of India (RBI) has introduced two significant regulatory updates aimed at streamlining foreign investment compliance for Indian companies. These changes relate to the reporting of foreign direct investment (FDI) under the Foreign Exchange Management Act (FEMA), 1999, through the FIRMS Portal. The updates include:
- Introduction of Modification Option for FC-GPR Filings – allowing rectification of errors without immediate rejection
- Simplified Reporting of Foreign Investment via the Single Master Form (SMF)
Recent updates by the Reserve Bank of India (RBI) have significantly enhanced the efficiency, transparency, and user experience of the FIRMS Portal. These improvements benefit a wide spectrum of stakeholders, including companies, compliance professionals, Authorized Dealer (AD) banks, and especially specialized teams like CertificationsBay LLP. Our experts, including Company Secretaries, are equipped to assist startups and compliance officers managing regular Foreign Direct Investment (FDI) inflows and share allotment compliances, ensuring seamless adherence to regulatory requirements.
Modification Option for FC-GPR Filing Enabled on FIRMS Portal
Previously, if an FC-GPR form submitted on the FIRMS Portal was rejected by an AD bank, applicants were required to restart the entire process — re-entering all details, re-uploading documents, and submitting a fresh application. This repetitive cycle often resulted in compliance fatigue, delayed statutory timelines, and additional queries for each resubmission.
Recognizing these challenges, the RBI has introduced a much-needed modification feature for FC-GPR filings on the FIRMS Portal. This update allows applicants to edit the originally submitted form based on feedback from the AD bank.
Key Highlights of the Modification Feature:
- Applicants can now revise and update the existing FC-GPR form without having to create a new one.
- There is no requirement to re-upload all supporting documents unless changes are necessary.
- Once the required corrections are made, the form can be resubmitted directly, significantly streamlining the process and enabling faster FDI approvals.
How Beneficial Are These Updates?
| Earlier | Now |
|---|---|
| Fresh FC-GPR form had to be created on every rejection | Existing FC-GPR form can be edited and resubmitted |
| Complete re-entry of data and documents was mandatory | Only minimal corrections are required before resubmission |
| High time and effort spent on repeated submissions | Significant reduction in compliance burden and processing time |
| Greater risk of delays and non-compliance due to repetitive processes | Timely resolution leading to enhanced efficiency and compliance |
RBI Introduces Simplified Single Master Form (SMF) Filing Procedure
In addition to the modification option, RBI has simplified the foreign investment reporting process through the introduction of the Single Master Form (SMF) filing on the FIRMS Portal. This initiative, outlined in RBI A.P. (DIR Series) Circular No. 22 dated January 4, 2023, offers a streamlined, fully digital, and time-bound workflow for reporting foreign investments.
Key Features of the Simplified SMF Process:
- Auto-Acknowledgement of Forms
Once submitted, forms receive an automatic acknowledgement with a timestamp on the FIRMS Portal. Simultaneously, applicants receive an automated email confirming submission. - AD Bank Review Within 5 Working Days
The Authorised Dealer (AD) Bank reviews the submitted form and documents within five working days, ensuring prompt verification. - Clear Protocol for Delayed Submissions
- For delays up to 3 years, applicants are required to pay a Late Submission Fee (LSF).
- For delays exceeding 3 years, cases must be compounded under the Foreign Exchange Management Act (FEMA).
- Post-LSF Actions by RBI
Upon payment of the LSF, the concerned Regional Office (RO) of RBI updates the status on the FIRMS Portal, with system-generated email notifications sent to the applicant. - Transparent Communication of Rejection Reasons
Any rejection remarks are communicated through automated emails and made available on the FIRMS Portal for reference, enhancing transparency.
Impact of These RBI Updates on Foreign Investment Compliance
These changes collectively signify RBI’s commitment to enhancing the efficiency and transparency of foreign investment reporting. Key improvements include:
- Elimination of redundant FC-GPR form filings
- Timely status updates and acknowledgements
- Defined workflows to address delayed filings
- An overall improved user experience on the FIRMS Portal
Recommendations for Professionals and Companies
To ensure full compliance with FEMA regulations, professionals and companies handling foreign direct investments are advised to:
- Leverage the new modification and SMF features on the FIRMS Portal
- Stay alert to compliance deadlines and submission timelines
- Maintain comprehensive and accurate documentation
- Utilize expert support, especially during Foreign Wholly Owned Subsidiary (WOS) registrations or foreign investments in Indian companies
By adopting these best practices, businesses can ensure timely FC-GPR filings and smoother regulatory adherence.
For compliance professionals, startups, and entities handling regular equity infusion from foreign investors, this update brings long-awaited relief. Firms like CertificationsBay, which specialize in FDI compliance, FEMA Compliance, and foreign subsidiary setup in India, can now assist clients more efficiently—ensuring quicker turnaround times, fewer rejections, and a smoother post-investment regulatory journey.
Professionals are now better positioned to manage their clients’ foreign investment reporting obligations using these new features. With the ability to modify FC-GPR filings directly and adhere to the structured SMF workflow, the process is not only simplified but also much more aligned with global best practices.
These new provisions also underscore the importance of maintaining accurate data, timely submissions, and comprehensive documentation. Whether it’s a new foreign investment, an allotment of shares to non-residents, or a conversion of external commercial borrowings into equity, businesses must leverage these digital tools to stay compliant under FEMA, 1999.
As the regulatory landscape evolves, staying updated and proactive is crucial. These updates from the RBI reflect a broader push toward digitization, efficiency, and accountability in India’s cross-border investment ecosystem. Businesses that adapt quickly and adopt these features will not only ensure timely compliance but also gain a strategic advantage in attracting and managing foreign capital.
