Certification Under Exchange Control Legislation (FEMA Guide) – 2026

It is a certificate issued by a Chartered Accountant (or other authorised professional) confirming compliance with India’s exchange control law, that is, the Foreign Exchange Management Act, 1999 and the rules and RBI regulations made under it. Common examples include certificates supporting Form FC-GPR, FC-TRS, ODI filings, ECB returns, and share valuations.

Exchange control in India is governed by the Foreign Exchange Management Act, 1999 (FEMA), replacing the earlier FERA, 1973. It regulates foreign exchange transactions, foreign investment into India, overseas investment, borrowings, and cross-border payments, administered by the RBI and the Central Government.

The Foreign Exchange Management Act, 1999 (FEMA) replaced the Foreign Exchange Regulation Act, 1973 (FERA). FEMA is a civil law focused on management of foreign exchange, whereas FERA was a criminal statute focused on conservation.

Mostly a practising Chartered Accountant. Depending on the certificate, a SEBI-registered Merchant Banker or a practising Cost Accountant may also certify, particularly for share valuations. The authorised dealer bank relies on these certificates.

For several filings it is. FC-GPR and FC-TRS require a valuation certificate, ECB-2 returns require CA certification, and Annual Performance Reports for overseas investment require a CA or statutory auditor certificate. The requirement depends on the specific transaction.

Yes. When a Chartered Accountant signs a certificate, a Unique Document Identification Number must be generated on the ICAI portal so the AD bank and the RBI can verify authenticity.

Form FC-GPR is filed with the RBI when an Indian company issues fresh shares or other eligible instruments to a person resident outside India. It requires a valuation certificate and a company secretary certificate as supporting documents.

Form FC-TRS reports the transfer of shares between a resident and a non-resident. It is filed on the RBI’s FIRMS portal through the authorised dealer bank, supported by a valuation certificate confirming the pricing guideline is met.

FIRMS (Foreign Investment Reporting and Management System) is the RBI’s online portal for reporting foreign investment, including Forms FC-GPR, FC-TRS, and the single master form filings.

The Annual Return on Foreign Liabilities and Assets is filed by Indian companies and LLPs that have received foreign investment or made overseas investment. It is filed with the RBI, generally by 15 July each year.

An APR is filed by an Indian party that has made overseas direct investment, reporting the performance of the foreign entity. It is certified by a Chartered Accountant or the statutory auditor based on the foreign entity’s audited accounts.

It is the monthly return filed for External Commercial Borrowings, reporting drawdowns and repayments. It is certified by the company and the designated AD bank, with CA certification where required.

FEMA certificates confirm compliance with exchange control and pricing rules for cross-border transactions. Income tax certificates, such as Form 15CB, confirm the taxability and withholding on foreign remittances. Many remittances need both.

Form 15CB is a Chartered Accountant certificate under the Income Tax Act (Section 195, Rule 37BB) confirming the tax position on a foreign remittance. It is a tax certificate, not strictly a FEMA certificate, but banks usually require it alongside FEMA compliance.

For issue or transfer of shares to a non-resident, the price must not be less than the fair value. For transfer from a non-resident to a resident, the price must not be more than the fair value. The fair value is certified by an authorised professional.

A Chartered Accountant, a SEBI-registered Merchant Banker, or a practising Cost Accountant, using an internationally accepted pricing methodology applied on an arm’s length basis.

A valuation should generally not be more than 90 days old at the time of the issue or transfer of shares. Beyond that, a fresh valuation is usually required.

There is no fixed fee. It depends on the transaction type, the volume of records, and whether a valuation is involved. Agree the scope and fee in writing beforehand.

The certificate is signed by the professional after verification. Documents can be shared digitally and a signed certificate issued, but it cannot be self-generated from a website.

Yes. It can be rejected or queried if the UDIN is missing, the valuation is stale or below the floor price, the documents are incomplete, or the transaction falls outside the permitted FDI route.

Yes. NRIs frequently need FEMA-related certificates for share transfers, property transactions, repatriation of funds, and remittance of sale proceeds.

Embassies generally require net worth or financial standing certificates rather than FEMA compliance certificates. FEMA certificates are used with banks and the RBI, though they may support the wider documentation.

Under the automatic route, foreign investment does not need prior government approval, subject to sectoral caps and conditions. Reporting to the RBI is still required.

Certain sectors require prior approval of the concerned administrative ministry before foreign investment can be received. The certificate and reporting follow the approval.

ODI is investment by an Indian party in a joint venture or wholly owned subsidiary abroad. It is regulated under FEMA, with reporting in Form ODI and annual APR certification.

LRS allows resident individuals to remit up to a prescribed limit per financial year for permitted current and capital account transactions. Banks may require a CA certificate and Form 15CA/15CB.

A current account transaction involves ordinary cross-border trade and payments and is generally freely permitted. A capital account transaction alters assets or liabilities abroad and is permitted only as specified under FEMA.

Audited financial statements, transaction documents, board resolutions, KYC of the non-resident, the relevant RBI form, FIRC or remittance proof, and a management representation letter.

A Foreign Inward Remittance Certificate is issued by the bank confirming receipt of foreign currency into India. It is a key supporting document for FDI reporting.

Form FC-GPR is generally filed within 30 days of allotment of shares to the non-resident, through the AD bank on the FIRMS portal.

Form FC-TRS is generally filed within 60 days of the transfer of shares or receipt of consideration, whichever applies.

Where a FEMA reporting requirement is filed late, the RBI permits regularisation on payment of a late submission fee, avoiding formal compounding in eligible cases.

Compounding is a process where a person who has contravened FEMA can voluntarily apply to the RBI to settle the contravention by paying a compounding amount, avoiding prolonged proceedings.

Under Section 13 of FEMA, a penalty of up to three times the sum involved may be imposed where the amount is quantifiable, or up to a specified amount where it is not, along with further daily penalty for continuing contravention.

Yes. A false or negligent certificate can attract ICAI disciplinary action for professional misconduct, and the professional may face civil liability to parties who relied on it.

By examining audited financials, remittance proof, transaction documents and board approvals, confirming the FDI route and sectoral cap, checking pricing compliance, and obtaining a management representation.

GST does not apply to the transfer of securities. However, GST may apply to services such as foreign exchange conversion charges levied by banks. It is separate from exchange control compliance.

Yes. LLPs receiving foreign investment must comply with the FDI rules, report in Form FDI-LLP(I) or (II), and file the annual FLA return, with professional certification where required.

Foreign contributions to NGOs are governed principally by the Foreign Contribution (Regulation) Act, 2010, not FEMA. Commercial foreign investment in an entity falls under FEMA. The applicable law depends on the nature of the receipt.

An AD bank is authorised by the RBI to deal in foreign exchange. It processes remittances and RBI filings, checks documentation and certificates, and acts as the interface between the customer and the RBI.

If facts change or an error is found, a fresh certificate with a new date and UDIN is issued rather than altering the original.

From a practising Chartered Accountant who verifies your records, the applicable FEMA provisions, and the reporting requirement, and issues a UDIN-backed certificate. You may reach our office through the contact link provided.

It refers to the legal regulation of foreign exchange transactions, foreign investment, and cross-border payments. In India it is governed by FEMA, 1999 and RBI regulations.

FEMA is a civil law. Contraventions attract monetary penalties and compounding rather than criminal prosecution, unlike the earlier FERA.

The Reserve Bank of India and the Central Government administer FEMA, with the Enforcement Directorate investigating contraventions.

It provides for penalties for contravention, which can extend up to three times the sum involved where quantifiable.

It is the consolidated reporting form on the FIRMS portal under which FC-GPR, FC-TRS, and other foreign investment filings are made.

It is the form filed for reporting overseas direct investment by an Indian party in a foreign entity.

The Annual Return on Foreign Liabilities and Assets is generally due by 15 July each year for the preceding financial year.

Not for every remittance. Form 15CB from a CA is needed for certain taxable remittances above prescribed thresholds; exemptions apply to specified categories.

It is a loan raised by an eligible Indian entity from a recognised non-resident lender, subject to FEMA conditions on amount, maturity, and end-use.

An LRN is allotted by the RBI for an ECB, and it must be obtained before drawing down the borrowing.

It is the maximum percentage of foreign investment permitted in a sector, as set out in the Consolidated FDI Policy and the NDI Rules.

They govern equity instruments and other non-debt investments by non-residents in India, including pricing guidelines and reporting.

Yes, under the Liberalised Remittance Scheme within the prescribed annual limit, subject to permitted purposes and reporting.

It is the transfer of sale proceeds or income from India to a person resident outside India, permitted subject to FEMA conditions, tax clearance, and documentation.

Repatriation is permitted subject to limits and conditions under FEMA, usually requiring a CA certificate and Form 15CA/15CB.

It is investment by an Indian entity that is foreign-owned or controlled into another Indian entity, which is treated as indirect foreign investment and must be reported.

Yes. FEMA regulates realisation and repatriation of export proceeds and payments for imports, with tracking through the EDPMS and IDPMS systems.

Softex forms are filed for export of software, certified by designated authorities, so that export proceeds are tracked and realised under FEMA.

The Export Data Processing and Monitoring System is the RBI system tracking export transactions and realisation of export proceeds.

Yes, with RBI or AD bank approval as applicable, subject to FEMA conditions, with annual activity certificates from a Chartered Accountant.

It is a certificate from a Chartered Accountant confirming that a branch, liaison, or project office of a foreign company has carried on only permitted activities.

No. Most sectors are under the automatic route requiring only post-facto reporting; some sectors need prior government approval.

The RBI may allow regularisation on payment of a late submission fee, or the contravention may need to be compounded.

Yes. A person who has contravened FEMA can voluntarily apply to the RBI for compounding of the contravention.

Yes. The issue price must not be less than the fair value certified by an authorised professional, and it is reported in Form FC-GPR.

It means the price that unrelated parties acting independently would agree, ensuring cross-border transactions are not mispriced.

Yes. Foreign investment in a startup requires compliance with the FDI policy, pricing guidelines, and FC-GPR or FC-TRS reporting.

Yes. Startups may issue convertible notes to non-residents subject to prescribed conditions and reporting under the NDI Rules.

Board approvals, valuation certificates, FIRCs, RBI acknowledgements, share certificates, agreements, and copies of all filings, retained for audit and inspection.

Verify the UDIN on the ICAI UDIN portal and confirm the CA’s membership number and firm details.