FC-TRS Reporting

Applicability for filing of FC-TRS

Form FCTRS is required to be filed for transfer of capital instruments between:
1. a person resident outside India holding capital instruments in an Indian company on a repatriable basis and person resident outside India holding capital instruments on a non-repatriable basis;and
2. a person resident outside India holding capital instruments in an Indian company on a repatriable basis and a person resident in India,

Note: The onus of reporting is on the resident transferor/ transferee or the person resident outside India holding capital instruments on a non-repatriable basis, as the case may be.

Non applicability for filing of FC-TRS: 
Transfer of capital instruments between a person resident outside India holding capital instruments on a non-repatriable basis and person resident in India.

The following are the instances where an Indian company will require filing of Form FC-TRS:

1. Sale of capital instruments on a recognized stock exchange by a person resident outside India.
2.Transfer of capital instruments viz., payment on deferred basis, shall be reported in Form FC-TRS to the AD bank on receipt of every tranche of payment. The onus of reporting shall be on the resident transferor/ transferee;
3.Transfer of ‘participating interest/ rights’ in oil fields;
4. buying back shares in a scheme of merger/ de-merger/ amalgamation of Indian companies approved by NCLT/ competent authority;

Time limit for filing of FCTRS:
within sixty days of transfer of capital instruments or receipt/ remittance of funds, whichever is earlier.

Process of FCTRS Reporting:

A.  The transferor/transferee filing the form needs to register itself with RBI-Firms portal before filing it.
B. following steps are followed for successful registration of transfer of securities from Resident to Non-Resident:

1. Receipt of consideration from non-resident.
2. Obtain FIRC (Foreign Inward Remittance certificate) and KYC (Know your customer) of person residing outside India from AD Category-I bank.
3. Submitting Security transfer deed and other documents required with the company.
4. Company registers the transfer.
5. File FC-TRS on FIRMS RBI Portal along with the attachments. (as mentioned below in Annexure 1)
6. Approval of FC-TRS by RBI.

C. Following documents shall be attached while filling e-form FC-TRS:

1. Consent letter for transfer/receipt of consideration duly signed by the buyer and the seller.
2. The shareholding pattern of the investee company (“the company, whose securities are transferring from one person to another”) before and after the acquisition of securities by a person resident outside India.
3. Certificate indicating fair value of securities from a Chartered Accountant.
4. Declaration from the buyer to the effect that he is eligible to acquire shares/compulsorily and mandatorily convertible preference shares/debentures under FDI policy.
5. Declaration from the non-resident transferee as per the format provided by the RBI in their SMF- user manual.
6. Requests letter from the transferee/transferor to register the transfer of securities in favor of investee Company.
7. Board Resolution of Investee Company to approve and acknowledge the securities transfer.
8. Securities Transfer Deed in form SH 4.
9. Security Purchase agreement, if any.
10. FIRC/KYC received from the AD Bank of transferor/transferee.