Foreign Currency Transfer of Shares (FC-TRS) – points to remember FCTRS (foreign exchange – stock conversion):

1. Foreign Currency Transfer of Shares- There is no fee to submit the FC-TRS form if it is filed within 60 days from the date of receipt/payment date of the consideration amount. Otherwise, the RBI / AD bank may impose a late packing penalty via late submission fee (LSF).
2. It is the responsibility of the transmitter/transmitter residing in India.
3. The transferee/transferee who deposits the form needs to register with the Reserve Bank of India’s portal before depositing it.
4. It is mandatory to attach a letter of approval from both buyer and seller with the FC-TRS form.
5. The evaluation of the shares to be transferred must be in accordance with the standards of foreign direct investment.
6. Attention must be paid to the sectoral limits applied to the company before transferring the shares.
Registration on the Indian Bank Companies Portal
The following two registration is required on the RBI Corporate Portal before you can submit the form:
• Indian entities (companies, non-governmental companies, or startups) that have received foreign investment in the past must register them by depositing this form. The information entry window in the EMF was opened initially from 06/28/2018 to 20/07/2018, but the Reserve Bank of India reopened the window again from 01/09/2018 to those Indian entities, which were unable to download their details under the EMF from During the presentation of the reason for the delay along with the letter of authority (stipulated by the RBI).
For new companies, non-company-specific companies, or startups set up after 30.07.2018; the EMF window is regularly open for them without any delay letter.
• After obtaining the entity user registration, the entity required to obtain the business user registration as well. For this, you need to visit at https://firms.rbi.org.in/firms/, specify the registration form for the business user, fill out the necessary details and attach the authorization letter (the form of this message is given in the SMF User’s Guide).
Please note that this registration can also be used by an individual if a resident individual is required to report.
Transfer of securities (such as stocks, bonds, stock guarantees, etc.)
Consequently, the following steps are followed for the successful registration of transfer of securities from resident to non-resident:
1- Receiving consideration from non-residents.
2. Obtaining FIRC (Internal Foreign Transfer Certificate) and KYC (Know Your Customer) for a person residing outside India from AD Category-I.
3. Submit a bond of transfer of guarantee and other required documents with the company.
4. The company records the transfer.
5. FC-TRS file on the RBI corporate portal, along with attachments. (As mentioned below in Annex 1)
6. Approval of FC-TRS by the RBI.
Foreign Currency Transfer of Shares
Appendix 1
The following documents must be attached while filling in the FC-TRS electronic form:
1. Letter of approval to transfer/receive consideration duly signed by the buyer and seller.
2. The pattern of shares in the investing company (“the company whose securities are transferred from one person to another”) before and after a person residing outside India obtains the securities.
3. A certificate indicating the fair value of the securities from a chartered accountant.
4. The buyer has declared that he is eligible for compulsory convertible shares / preferred shares compulsorily in accordance with the FDI policy.
5. A declaration from the non-resident transferee obtained according to the form provided by the Reserve Bank of India in their SMF-User Manual.
6. A letter is requested from the transferor/transferee to record the transfer of securities in favor of the investing company.
7. The Investee Board of Directors’ decision to approve and approve the transfer of securities.
8. Securities transfer deed in SH 4 form.
9. Purchase security agreement, if any.
10. FIRC / KYC is received from the AD bank of the transferee/transferee.
Aspects of evaluation in the framework of transferring securities
Transfers are made at or above the fair value determined based on arm’s length.
• The minimum price is the fair value determined by the chartered accountant.
• If the fair value, determined to this extent, is less than the nominal value of the securities of Investee, in this case, the transfer will be made at or above the nominal value of each security.
AMOUNT OF LSF PRESCRIBED BY RBI FOR DELAY REPORTING
The amount involved in reporting (in Rs.) Late Submission Fee (LSF) as % of the amount involved * The maximum amount of LSF applicable
Up to 10 million 0.05 percent Rs.1 million or 300% of the amount involved, whichever is lower
More than 10 million 0.15 percent Rs.10 million or 300% of the amount involved, whichever is lower
* The % of LSF will be doubled every twelve months.

The floor (minimum applicable amount) for LSF will be Rs. 100

transfer of shares from resident to non resident
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