With the objective of integrating the extant reporting structures of various types of foreign investments in India, the Reserve Bank of India (‘RBI’) has, by its circular dated June 7, 2018 (copy enclosed) provided that it will introduce a Single Master Form, which will have to be filed online by an Indian company or limited liability partnership (including investment vehicles) (‘Indian Entity’) for reporting total foreign investment in such Indian Entity. Accordingly, all Indian Entities having direct or indirect foreign investments are required to undertake the following reporting actions in respect of their existing and future foreign investment.
Existing foreign investment: Any Indian Entity, which has received foreign investment in the past, is required to file the ‘Entity Master’ on RBI’s website in respect of its existing foreign investment. For this purpose, the RBI will provide an interface to the Indian Entities from June 28, 2018 to July 12, 2018 on its website rbi.org.in. This is a mandatory requirement and any failure by an Indian Entity in making such filing within the prescribed timeline will result in such Indian Entity not being able to receive foreign investment (including indirect foreign investment) and such an Indian Entity will be held to be non-compliant with Foreign Exchange Management Act, 1999 and regulations made thereunder.
Future foreign investment: Once the Single Master Form is implemented by the RBI, an Indian Entity will be required to file the Single Master Form as and when foreign investment is received by such an Indian Entity.
RBI has, till date, only released the indicative formats of the Single Master Form and the Entity Master (both of which are enclosed). The final format of these forms will be released by RBI in due course under the Master Directions for Reporting under Foreign Exchange Management Act, 1999.
Necessary steps will be required to be taken by all Indian Entities in relation to reporting the existing foreign investment and to prepare the relevant data in advance, so that the ‘Entity Master’ is completed within the prescribed timelines.