FEMA compliance for a Japanese-owned Indian company means reporting share allotments on Form FC-GPR within thirty days, share transfers on Form FC-TRS, filing the annual return on foreign liabilities and assets by 15 July, and following pricing rules for issue and transfer of shares. Loans from the Japanese parent are external commercial borrowings with their own reporting. Delays can usually be regularised by paying a late submission fee or by compounding, and should be fixed early.
- Document route
- Japanese notary (koshonin), then MOFA apostille
- Time difference
- IST is 3h30 behind Japan all year (no daylight saving)
- Law
- FEMA 1999 and NDI Rules 2019
- New shares
- FC-GPR within 30 days of allotment
FDI & FEMA Compliance from Japan: how it works
We start with a health check of the Indian company's foreign investment history: every remittance from Japan, the date of allotment, valuation reports, the FC-GPR filings and the annual returns. Many long-established Japanese subsidiaries have gaps from earlier years, often missed reporting for rights issues or conversions of loans into equity. We list each issue, how serious it is and the remedy, which may be a late submission fee or an application for compounding to the RBI. Documents from Japan, such as board approvals for a new tranche, are notarised and apostilled in the usual way.
For new transactions we prepare the paperwork in advance: the valuation by a registered valuer or chartered accountant, the board and shareholder resolutions, the KYC of the Japanese remitter and the filing on the FIRMS portal through your authorised dealer bank. For parent loans we check the borrowing limits, all-in cost ceiling, end use and the monthly ECB return. Royalty and technical fee agreements with the Japanese parent are reviewed for FEMA, transfer pricing and withholding tax together, because a problem in one usually shows up in the others.
What clients in Japan should know
- Conversion of a Japanese parent loan into equity is common and needs both ECB and FDI reporting, which is often overlooked.
- The India and Japan CEPA protects investment, but it does not relieve the Indian company of any RBI reporting.
- Downstream investment by a Japanese-owned Indian company into another Indian company counts as indirect foreign investment and has its own reporting.
Step by step from Japan
Video consultation
A call at a time that suits Japan, after we have read your documents.
Documents signed in Japan
Japanese notary (koshonin), then MOFA apostille
Work in India
Our team files, appears and follows up in India, and shares scans of everything filed.
Result and handover
Certified copies and originals are couriered to you in Japan where needed.
The full guide
This page covers what changes when you are in Japan. For the law, the documents and the step-by-step procedure, read our main page on FDI & FEMA Compliance, or see all services for clients in Japan and the Doing Business in India practice area.
Questions from clients in Japan
What happens if FC-GPR was filed late?
The RBI framework allows a late submission fee for delayed reporting. Longer or more serious contraventions may need compounding.
Do we need RBI approval to receive capital from Japan?
Not under the automatic route. Reporting after the fact is required, and sector caps and conditions must be met.
Is the annual FLA return needed even if nothing changed?
Yes, every Indian company with foreign investment in the year or previous years must file it by 15 July.