FCTRS

Introduction

Foreign Currency Transfer Report Scheme – Timely Reporting of Foreign Investments Transfer

FCTRS (Foreign Currency Transfer Report Scheme) is a regulatory filing required when there is a transfer of shares or capital instruments held by a foreign investor in an Indian company to another foreign investor or resident, involving foreign currency consideration. The scheme ensures RBI monitoring and regulatory compliance of share transfers involving foreign investments.

Legal & Regulatory Framework

FCTRS

Regulator

 Reserve Bank of India (RBI)

Regulation

Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 (FEMA FDI Regulations)

Purpose

 

To report transfer of shares by foreign investors in an Indian company

Documents Required for FCTRS Filing

  • Share transfer deed executed between parties
  • Board resolution approving transfer (if applicable)
  • KYC documents of transferee
  • Valuation certificate (if transfer is at premium or discount)
  • Bank certificate evidencing receipt of consideration (if foreign currency)
  • Copy of share certificates
  • Details of transferor and transferee (FIRC, PAN, address proof)

Whenever there is a transfer of shares or capital instruments by a foreign investor to:

  • Another foreign investor OR
  • A resident (Indian) entity or individual
  • The transfer involves consideration in foreign currency or is subject to FEMA regulations
  • Reporting is required to the RBI to maintain transparency on foreign investments and transfers

Step 1: Share Transfer Agreement

Execute a legally valid share transfer agreement between the transferor and transferee

Step 2: Obtain Approvals (if applicable)

Check whether the share transfer requires prior approval from RBI or the Government of India as per FDI policy

Obtain necessary approvals if mandated

Step 3: Prepare Documents

Share transfer deed

Board resolutions approving share transfer (transferor and transferee companies if applicable)

KYC and due diligence documents of transferee

Copy of share certificate(s)

Valuation report (if applicable)

Bank certificate evidencing remittance or consideration

Step 4: File FCTRS Report

File FCTRS report on the RBI’s Foreign Investment Reporting and Management System (FIRMS) portal

Provide details of transferor, transferee, number of shares transferred, consideration, and other relevant details

Upload supporting documents and declarations

Submit for RBI acknowledgment