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Foreign Currency Transfer of Shares (FC-TRS)

FC- TRS refers to foreign currency transfer of shares. Provisions of FEMA Act 1999 and regulations therein require that in case of transfer of capital instruments between a person resident in India and a person resident outside India, FC-TRS shall be filed within the prescribed time.

Which transfers require FC-TRS to be filed?
As per regulation 10 of the FEMA ACT, 1999 following types of transfers require the filing of FC-TRS:

  • Sale of capital instruments from a non- resident to a resident
  • Sale of capital Instruments from a resident or NRI/OCI or eligible investor (as specified) to non-resident.
  • Gift of capital Instruments from a resident or NRI/OCI or eligible investor (as defined) to non-resident.
  • Invocation of pledge

What is FIRMS?
FIRMS or foreign investment reporting and management system is an online platform for reporting foreign investment in India. It is the single master form for different types of reporting in one place. The forms available in this master form are FC-GPR, FC-TRS, LLP-I, LLP-II, CN, DRR, ESOP, DI, INVI.

What are the steps involved in filing FC-TRS?
The steps involved in filing FC-TRS are:

  1. To get registered as a business user for this, the applicant has to go to the FIRMS website at https://firms.rbi.org.in and on the website open the registration and fill up the details in the form.
  2. To login to FIRMS at the website.
  3. To login to the single master form.
  4. To select an FC-TRS form from the available dropdown
  5. To file common investment details including:
    • CIN
    • Company’s name
    • PAN Number etc.
  1. To fill in the common details

After filing common investment details; some common details like manner of transfer, change in the shareholding pattern, if any, the transfer is made from and to whom, nature of transfer, date of transfer, transfer type, and at last the buyer or seller details in case of sale or donor and donee details in case of gift has to be filled.

  1. To fill the particulars of the transfer in which type of capital instruments, number of instruments, number of equity shares, the face value of shares, transfer price per instrument, consideration etc., have to be filled.
  2. To fill in the remittance details such as medium of payment, name and details of authorized dealer bank etc.
  3. Users have to disclose the shareholding pattern
  4. To save and submit the form

What are the documents required to be attached with FC-TRS forms?
In case of transfer by way of gift:

  • Relevant regulatory approvals have to be attached (wherever applicable)
  • A consent letter between the parties for the transfer has to be attached.
  • Non-resident declaration has to be attached in the prescribed format.

In case of transfer by way of sale:

  • Transfer agreement extracts of the transfer agreement and the consent letter between buyer and seller must be attached.
  • Valuation certificate as per FEMA 20 (R) has to be attached.
  • Non-resident declaration has to be attached in the prescribed format.
  • FIRC /outward remittance certificate and KYC have to be attached.

At AJSH, we assist our clients in setting up their business in India and ensuring they comply with all statutory requirements like accounting, bookkeeping, tax filings & assessments  payroll, auditing, trademark registration, business structuring etc,. in a timely manner. If you have any questions or wish to know about FC-TRS, kindly contact us.