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The Reserve Bank of India (RBI) has introduced new directions
under the provisions of the Foreign Exchange Management Act, 1999
vide A.P. (DIR Series) Circular No. 30 notified on the 7 June 2018
(hereinafter referred to as 'RBI Circular') laying down the
roadmap for implementation of the reporting of foreign investments
through the Single Master Form (SMF).
The present system of reporting total foreign investment in
India made by a person residing outside India through eligible
capital instruments in the investee company or capital contribution
in a Limited Liability Partnership (LLP) or investments in other
investment vehicles, involves filing of numerous forms via various
reporting platforms. This renders it as a disintegrated reporting
The RBI circular focuses on integrating the foreign direct
investment reporting system and has mandated reporting via
following two new forms:
|Name of the Form
||Points to be noted
|Entity Master Form (EMF)
- Prior to the implementation of SMF,
RBI will provide a reporting interface called as EMF to Indian
companies and LLPs that have existing foreign investment including
indirect foreign investments, to provide data input on total
foreign investment received till date by them.
- The said interface will be available
on RBI's website
www.rbi.org.in from 28 June 2018 to 12 July 2018, the
format of which is attached as the Annexure 1 to the Circular on
- There are various details required to
be filled in EMF, like identification number, registered office,
foreign holding percentage, etc.
- Indian entities not complying with
this pre-requisite, i.e., filing of EMF, will not be able to
receive foreign investment (including indirect foreign investment)
and will be considered as non-compliant with FEMA and regulations
|Single Master Form
- The SMF will be an integrated
reporting form which will be an event-based form aiding in
reporting the total foreign investment in India made by a person
residing outside India.
- SMF would provide a facility for
reporting total foreign investment in an Indian entity viz.
company, LLP and other investment vehicles (Real Estate Investment
Trusts (REITs)/Infrastructure Investment Trusts
(InvIts)/Alternative Investment Funds (AIFs).
- SMF will subsume the existing forms
- FC-GPR and FC-TRS for Issue and
transfer of shares.
- Form LLP-I & II for foreign
direct investment in LLP and disinvestment/transfer of capital
- Form ESOP for issue of employee stock
- Form CN for issue or transfer of
- Form DR for issue or transfer of
- SMF will also be compulsory
- Reporting the downstream investment
(indirect foreign investment) in a company or LLP via Form DI
– reporting of downstream investment (indirect foreign
investment) in a company or LLP.
- Reporting of investment in an
investment vehicle, including REITs, InvIts and AIFs via Form InVi
– reporting of investment by a person resident outside India
in an investment vehicle.
- While the format of the form has been
provided as Annex II to the circular, RBI is yet to notify the
form. Once notified, the form will be available in the master
direction on reporting as well as on the website for the entities
to file it as and when required.
The integration of the extant reporting structures is a positive
move made by RBI to simplify and rationalize reporting for foreign
investment in India. It is also aimed at ensuring that there is
consistency and accuracy of data on foreign investments
There may be certain practical difficulties prior to
implementation of the new form for the Indian entities to collate
details on foreign investment, especially as the window for
uploading such data on the RBI interface is open for only 15
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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