What is FC-TRS?
FC-TRS reports a transfer of capital instruments of an Indian company between a person resident in India and a person resident outside India. Unlike FC-GPR, which covers fresh issues by the company, FC-TRS covers secondary transactions — existing shares changing hands. It is filed through the Single Master Form on the RBI’s FIRMS portal.
Who files, and by when?
The obligation generally sits with the resident party — the resident buyer or seller. Where a non-resident holds instruments on a non-repatriation basis, or buys on a stock exchange, the rules place the obligation differently, so check your specific case.
FEMA pricing rules
| Direction of transfer | Price condition (unlisted company) |
|---|---|
| Resident → non-resident | Not less than fair value |
| Non-resident → resident | Not more than fair value |
Fair value for an unlisted company is determined by a Chartered Accountant, SEBI-registered merchant banker or practising cost accountant using an internationally accepted pricing methodology on an arm’s-length basis.
Deferred consideration and escrow
FEMA allows part of the consideration in a resident–non-resident transfer to be deferred: up to 25% of the total consideration can be paid on a deferred basis within 18 months of the transfer agreement, or kept in escrow or indemnified for the same period. This is useful for earn-outs and warranty holdbacks — as long as the pricing guidelines are still met.
Documents and process
- Share purchase / transfer agreement and consent letters.
- Valuation certificate supporting the price.
- FIRC (for inward remittance) or remittance proof (for outward), and KYC of the non-resident party.
- Declarations by transferor and transferee.
- Submission on FIRMS; AD bank review and acknowledgement.
- Update the company’s register of members and cap table once the transfer is complete.
Tax matters too: a buyer paying a non-resident seller may need to withhold tax, and capital gains arise for the seller. Plan both alongside the FEMA filing.
More on foreign-investment filings: FEMA / RBI compliance services.
Frequently asked questions
What is the time limit for filing FC-TRS?
Is FC-TRS required for a transfer between two non-residents?
Can payment for shares bought from a non-resident be deferred?
Please note: this guide is general information based on the rules as they stood on the review date above. Regulations and RBI/CBDT procedures change often — please get advice on your specific facts before acting.