WHICH COMPANIES HAVE TO FILE FORM DRR UNDER FEMA WITH RBI THROUGH YOUR BANKER ?

 WHICH COMPANIES HAVE TO FILE FORM DRR UNDER FEMA WITH RBI THROUGH YOUR BANKER ?

WHAT IS FORM DRR –( DISINVESTMENT/REPATRIATION REPORT) UNDER FEMA?

Form DRR (Disinvestment/Repatriation Report) is used to report:

·      Full or partial disinvestment from a foreign JV/WOS (Joint Venture or Wholly Owned Subsidiary), and

·      Repatriation of sale proceeds to India.

·      Form DRR is used for reporting the issue or transfer of Depository Receipts (DRs), such as American Depository Receipts (ADRs) or Global Depository Receipts (GDRs), that are issued in accordance with the Depository Receipt Scheme, 2014.

This ensures compliance with Regulation 16 of the FEMA (Overseas Investment) Regulations, 2022.

REGULATORY CONTEXTUAL

Relevant Regulation: Rule 19 and 20 of the Foreign Exchange Management (Overseas Investment) Rules, 2022

Prescribed Form: Form DRR (Annexure IV of the Overseas Investment Regulations, 2022)

Governing Notification: FEMA Notification No. 120/2004-RB (as updated through the 2022 Overseas Investment Regulations)

DEADLINE FOR FILING FORM DRR

Within 30 days from the date of disinvestment or repatriation of proceeds

TO WHOM FORM DRR HAS TO FILED WITH ?

·      The Authorised Dealer (AD) Category-I Bank through which the original investment was made.

 

·      The AD Bank submits the report to the RBI via the FIRMS Portal (Entity Master / Overseas Investment section).

 

·      The filing is done through the Single Master Form (SMF) on the RBI's Foreign Investment Reporting and Management System (FIRMS) portal. The SMF is a unified platform for reporting various foreign investment transactions. After filing ,the Authorised dealer will forward the form to RBI.

ATTAHEMENTS TO THE FORM DRR

DOCUMENTS TO BE ATTACHED

·      Copy of valuation certificate

·      Proof of remittance of sale proceeds

·      Copy of share purchase/sale agreement

·      Auditors’ certificate confirming accounting and repatriation

·      Any regulatory approval letters (if applicable)

 

OUTCOMES FOR NON-ADHERENCE

Failure to file Form DRR within the prescribed time may result in:

·      Violation under Section 13 of FEMA, 1999

·      Liability to penalty and compounding proceedings by RBI

In summary, Form DRR is a mandatory compliance requirement under FEMA for the reporting of transactions related to Depository Receipts and  full or partial disinvestment from a foreign JV/WOS.

 

R V SECKAR , FCS ,LLB 79047 19295