Inbound Investment

Foreign Direct Investment Compliance

Complete inbound investment advisory — from sectoral cap analysis and FDI policy interpretation to FC-GPR / FC-TRS filing and post-investment compliance.

⏱ 3–8 Weeks 📋 10+ Deliverables 🌍 India
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Overview

What is FDI Compliance?

Foreign Direct Investment in India is governed by the FDI Policy, FEMA Regulations, and sector-specific guidelines. Every inbound investment requires precise structuring to ensure sectoral cap compliance, correct pricing, and timely regulatory filings.

Why It Matters

Non-compliance with FDI norms can result in compounding, penalty proceedings, or even invalidation of the investment. Incorrect pricing (below or above fair value) triggers FEMA contraventions and income tax scrutiny under Section 56(2)(viib) or Section 50CA.

SilverSiX structures every inbound investment with a dual-lens approach: FEMA compliance + tax optimization. We handle both automatic and government approval routes.

📊 FDI Policy Snapshot

  • 100% automatic route in most non-regulated sectors
  • Government approval for sensitive sectors (defence, media, etc.)
  • Pricing per FEMA Pricing Guidelines + FDI Policy
  • FC-GPR filing within 30 days of allotment
  • FC-TRS filing within 60 days of transfer
  • Downstream investment reporting obligations
Our Scope

Comprehensive FDI Services

🏛️ Sectoral Cap Analysis

We analyze the investee company's sector against the latest FDI Policy to determine caps, conditions, and entry routes.

  • Sector identification & FDI cap mapping
  • Conditions for foreign investment (technology, etc.)
  • Restricted/prohibited sector flagging

📋 Route Determination

Clear guidance on whether the investment qualifies for the automatic route or requires Government/FIPB approval.

  • Automatic route eligibility check
  • Government approval documentation
  • Press Note 2 (2018) downstream analysis
  • Conditionalities & lock-in period compliance

💰 Pricing & Valuation

Fair value determination to comply with FEMA Pricing Guidelines and avoid Section 56(2)(viib) / 50CA issues.

  • DCF & Comparable Company Valuation
  • FC-GPR / FC-TRS pricing compliance
  • Certificate of valuation from SEBI RVM
  • Arm's length price for related-party FDI

📝 Filing & Reporting

Complete filing management with the RBI and AD Bank for all post-investment returns.

  • Form FC-GPR (Issue of shares)
  • Form FC-TRS (Transfer of shares)
  • Form FC-ILP (LLP investment)
  • FLA Return (Annual)

🔄 Exit Structuring

Tax-efficient exit mechanisms for foreign investors including buyback, reduction of capital, and share transfer.

  • Exit route comparison (sale vs. buyback vs. ROC)
  • Capital gains tax optimization under DTAA
  • FC-TRS compliance on transfer
  • Repatriation guarantee & NOC

🔍 Ongoing Compliance

Annual compliance calendar and regulatory health checks to maintain clean FDI status.

  • Annual FLA Return filing
  • Change in investment pattern reporting
  • Downstream investment tracking
  • FEMA audit & gap remediation
Execution

Our FDI Process

1

Sector & Route Analysis

Mapping the investee business to the FDI Policy to determine sectoral caps, conditions, and applicable route.

2

Investment Structuring

Designing the instrument (equity, CCPS, CCD) and pricing mechanism to meet FEMA and Income Tax requirements.

3

Valuation & Documentation

Independent valuation, term sheet drafting, and SPA/SHA review from a regulatory compliance perspective.

4

Remittance & Allotment

Liaison with AD Bank for FIRC issuance, KYC compliance, and share allotment formalities.

5

Post-Investment Filing

FC-GPR filing within 30 days, FLA Return, and downstream investment reporting.

6

Annual Compliance & Exit Planning

Ongoing compliance calendar and exit structuring for future liquidity events.

Deliverables

What You Receive

DeliverableDescriptionTimeline
FDI Structuring MemoSectoral cap, route, and instrument recommendationWeek 1
Valuation ReportSEBI RVM-certified fair value certificateWeek 2
Term Sheet ReviewRegulatory compliance check on pricing & termsWeek 2
SPA/SHA Compliance NoteFEMA + tax compliance gap analysisWeek 3
FC-GPR FilingComplete filing with AD Bank within 30 daysWeek 3–4
FIRC & KYC KitForeign Inward Remittance Certificate compilationWeek 3
FLA ReturnAnnual foreign liability & asset returnJuly 15
Exit RoadmapTax-efficient exit blueprint for foreign investorWeek 4
FAQ

Common Questions

What is the difference between FC-GPR and FC-TRS? ▼
FC-GPR is filed when fresh shares are issued to a foreign investor (allotment). FC-TRS is filed when existing shares are transferred between foreign residents or from resident to non-resident.
Is FDI allowed in all sectors? ▼
No. Sectors like lottery, gambling, chit funds, Nidhi companies, and real estate (certain segments) are prohibited. Some sectors have conditional caps (e.g., defence, media, aviation).
What happens if FC-GPR is filed late? ▼
Late filing attracts compounding fees under FEMA. The AD Bank may refuse to accept the return beyond the deadline, requiring direct RBI intervention.
Can FDI be made at a premium? ▼
Yes, provided the premium is justified by a SEBI-registered valuer's report and is not excessive to trigger Section 56(2)(viib) (angel tax) or FEMA pricing violations.
What is downstream investment? ▼
When an Indian company receiving FDI makes further investment into another Indian entity, it is treated as indirect foreign investment. Press Note 2 (2018) governs these calculations.

Ready to Structure Your Inbound Investment?

Book a confidential discovery call with our advisory team. We assess your situation and outline a clear execution roadmap within 48 hours.

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