FEMA Compliance Services

The Foreign Exchange Management Act, 1999 governs every cross-border transaction that an Indian entity undertakes, whether it is receiving foreign investment, borrowing from an overseas lender, or setting up a subsidiary abroad. Compliance is administered through the Reserve Bank of India and its authorised dealer banks, and the framework covers inbound foreign direct investment, external commercial borrowings (ECBs), overseas direct investment (ODI), and a range of periodic reporting obligations. Any company, LLP, or individual dealing in foreign exchange, foreign securities, or immovable property outside India falls within its scope, making FEMA one of the most pervasive yet frequently misunderstood compliance regimes for growing businesses.

Why This Matters

FEMA violations are treated as civil contraventions but can attract penalties of up to three times the amount involved, and in cases of continuing default, additional daily penalties until the contravention is rectified. Beyond the monetary exposure, unresolved FEMA lapses can delay fundraising rounds, complicate exits, and surface as red flags during buyer or investor due diligence. Because filings such as FC-GPR and the Annual Return on Foreign Liabilities and Assets (FLA) are time-bound and transaction-specific, even well-intentioned businesses often discover gaps only when a compliance certificate is demanded during a later transaction.

How We Help

Foreign Investment Reporting

We assist with the complete lifecycle of inbound investment reporting, including filing Form FC-GPR on allotment of shares to non-resident investors, Form FC-TRS for transfer of capital instruments between resident and non-resident holders, and other single master form (SMF) filings on the RBI's FIRMS portal, ensuring each filing is made within the prescribed timelines and with the correct valuation certification.

External Commercial Borrowings

For businesses raising debt from overseas lenders, we structure the borrowing within permitted end-use, maturity, and all-in-cost norms under the ECB framework, prepare the loan registration number (LRN) application, and manage ongoing ECB-2 return filings with the designated authorised dealer bank.

Overseas Direct Investment

When an Indian entity invests in a joint venture or wholly owned subsidiary abroad, we guide structuring under the automatic or approval route, prepare the requisite Form ODI filings, and support subsequent compliance including annual performance reports for the overseas entity.

Annual and Event-Based Filings

We manage recurring obligations such as the Annual Return on Foreign Liabilities and Assets (FLA) and monitor sectoral caps, pricing guidelines, and downstream investment conditions so that event-based filings triggered by share transfers, buybacks, or conversions are never missed.

Who Needs This

• Indian companies receiving foreign direct investment or issuing shares to non-residents
• Businesses raising external commercial borrowings from foreign lenders
• Indian entities setting up or investing in overseas subsidiaries and joint ventures
• Startups and companies undergoing cross-border share transfers, mergers, or restructuring

Our Approach

We begin by mapping every cross-border transaction a business has undertaken against its FEMA filing history to identify gaps before they surface elsewhere. Our advice stays grounded in the current RBI Master Directions and notifications rather than generic checklists, and we work closely with authorised dealer banks to ensure filings are accepted without unnecessary queries or delays. Where past non-compliance exists, we help evaluate compounding applications to regularise the position with the Reserve Bank.

Get in Touch

To discuss how we can support you with FEMA compliance, write to us at info@agarwalurs.com.