All Indian entities receiving any form of foreign investment are required to report the same to the Reserve Bank of India (“RBI”). At present, 12 different types of forms have been prescribed for foreign investment reporting. The RBI, with the objective of integrating the extant reporting structures of various types of foreign investment in India, vide its circular no. RBI/2017-18/194 A.P. (DIR Series) Circular No. 30 dated June 7, 2018 (“SMF Circular”) has introduced a system of the Single Master Form (“SMF”). The SMF will subsume most of the foreign investment related reporting requirements irrespective of the mode or instrument through which the foreign investment is made. The SMF is proposed to be filed online. While the SMF has not been finalised, an indicative format of the same has been prescribed by the RBI.
Significantly, the RBI vide the SMF Circular has introduced a compliance requirement. The SMF circular directs all Indian entities, including Indian company and LLPs, to input the data on total foreign investment received by such entities till date in a dedicated interface to be provided by the RBI (“Entity Master”). The interface will be available on RBI website (www.rbi.org) from June 28, 2018 to July 12, 2018. In order to ensure that the Indian entities are in readiness with the requirements to be provided in the Entity Master, the RBI has prescribed the format of the Entity Master in the SMF Circular. Indian entities not complying with this pre-requisite will not be able to receive foreign investments (including indirect foreign investment) and will be non-compliant with the Foreign Exchange Management Act, 1999 and the regulations made thereunder. It is therefore imperative for all Indian entities having foreign investment to report the same in the Entity Master within this prescribed period.
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