A Bengaluru company that allots shares to a foreign investor and reports nothing has already contravened FEMA. Nothing visible happens at first. The problem surfaces in a due diligence data room, in a bank query on the next inward remittance, or in a notice asking why the allotment was never reported. By then the correction costs several times what the filing would have. RBI compliance is the small set of returns that keeps foreign money moving through a Bengaluru business without a history stacking up behind it.
What does a late or missing RBI filing actually cost?
The penalty exposure under FEMA runs up to three times the sum involved in the contravention. That is the headline number, and it is why the corrective route exists at all. The practical costs arrive earlier and bite sooner.
- Your authorised dealer bank can sit on the next inward remittance until the earlier allotment is reported and acknowledged.
- An investor's counsel finds the gap during diligence, and the round is repriced or held while a compounding application is prepared.
- A missed annual report on an overseas subsidiary repeats itself every year, so one forgotten filing quietly becomes four.
- Professional cost and management time on a compounding case run for months, against a filing that would have taken days.
Compounding is the way back. You disclose the contravention to the Reserve Bank yourself, pay a single settlement amount and receive an order that closes it. A voluntary disclosure reads very differently from a file the regulator opened on its own.
Who gets caught by this in Bengaluru, and at what point?
There is no turnover threshold here and no minimum ticket size. One share issued to one non resident, or one rupee drawn under a foreign loan, brings the whole reporting machinery with it. The same few situations come up again and again across Bengaluru.
- A precision engineering and machine tools unit in Peenya sells a minority stake to its overseas technology partner, and FC-GPR falls due 30 days from allotment.
- That same Peenya unit borrows from the partner to buy a machine, which is an external commercial borrowing needing a loan registration number before the first drawdown.
- A product startup founder in HSR Layout closes a first institutional cheque from an offshore fund while hiring the first ten employees.
- A holding company in Whitefield sets up a subsidiary abroad to hold a customer contract, and owes a report every year that entity stays alive.
- A resident individual in Koramangala remits under the Liberalised Remittance Scheme, capped at USD 250,000 in a financial year, with tax collected at source above ₹7 lakh.
The pattern is consistent. The money arrives or it leaves, everyone celebrates, and the reporting is remembered a quarter later.
Which office ends up holding your file?
Not a Karnataka one. A FEMA filing reaches the Reserve Bank through your authorised dealer Category I bank, meaning the branch that holds the account the money moved through. That bank verifies the form, raises queries on it and forwards it. Your registrar, your city corporation and your jurisdictional tax officer play no part in it at all.
For a Bengaluru company reporting foreign investment, the route runs like this.
- The inward remittance lands and the bank issues the foreign inward remittance certificate along with the KYC report on the remitter.
- A valuation certificate is obtained so the price per share can be defended as being at or above fair value.
- The entity master is created on the FIRMS portal, with the registered office address exactly as it reads on the register.
- FC-GPR is filed under the single master form within 30 days of allotment, and your bank verifies it before it moves.
- The acknowledgment is filed away, because it is the first document any future investor will ask you for.
The Karnataka layer sits beside this rather than inside it. The Karnataka Commercial Taxes Department sees the other half of the same money when a Bengaluru software or engineering exporter claims a zero rated supply against a letter of undertaking. A Karnataka GST registration number carries the state's own two digit code at the front, and we confirm the number the department issues you before anything is reconciled against it.
Which dates govern your year?
Deadlines under FEMA are counted from an event, not from a calendar quarter. Miss the event and the clock has already been running.
| Filing | What sets the clock running | When it falls due |
|---|---|---|
| FC-GPR | Shares allotted to a person resident outside India | 30 days from the date of allotment |
| FC-TRS | Shares moving between a resident and a non resident | 60 days from the date of transfer |
| ECB-2 | Any month in which a foreign currency loan is outstanding | Within 7 working days of the month closing |
| Annual performance report | An overseas subsidiary still on your books | 31 December each year |
| FLA return | Foreign assets or liabilities held at the close of the financial year | 15 July each year |
Two of those catch Bengaluru businesses out most often. The annual performance report goes, because a quiet overseas subsidiary feels like dormant paperwork. The FLA return goes, because July is when nobody is thinking about last year.
What does the work cost, and what sits inside the fee?
RBI compliance starts at ₹15,000, and a standard reporting engagement runs 15 to 20 days from the day your documents are complete. Inside that fee sit the drafting, the portal work, the annexures your bank will want and the back and forth until the filing is verified.
Three things sit outside it, and we say so before you start. The valuation certificate is billed by the merchant banker or chartered accountant who signs it. Your bank levies its own charges on the verification. A compounding application carries an application fee payable to the Reserve Bank, and we confirm the current amount with you before it is filed. None of these is a government filing fee in the way an MCA form carries one, which surprises clients who expect a challan.
Where does Karnataka professional tax sit alongside all this?
Directly alongside, and it is the state obligation a foreign funded Bengaluru company forgets most often. The levy sits under Karnataka Act 35 of 1976, it runs on e-Prerana at ptax.karnataka.gov.in, and Karnataka works with two certificates rather than one.
The certificate of enrolment, the EC, covers the company's own liability. The certificate of registration, the RC, covers what the company deducts from its staff. A Bengaluru company with employees needs both, and the application goes in within 30 days of commencing the trade or profession.
Entry 2 of the Schedule catches any person registered or liable to be registered under the Karnataka Goods and Services Tax Act, 2017, and the tax is ₹2,500 a year. Enrolment payment falls due before 30 April where you were already enrolled when the year opened. On the payroll side the deduction is ₹200 a month for eleven months and ₹300 for February. It applies to every employee drawing a monthly salary of ₹25,000 and above. The employer files a statement in Form 5-A and pays within 20 days of each month ending. Where a company holds more than one place of business, say a Peenya works and an HSR Layout office, each additional place is treated as a separate person and carries its own ₹2,500.
How do you know which FEMA filings you actually owe?
The filings are only half of the job. The other half is knowing which of them your business actually owes, and in what order, before a bank or an investor asks. Our CA and CS team maps every cross border transaction a Bengaluru business has made, tells you plainly what is late, and puts the rest on dates you can see. For the national position on forms, routes and timelines, read RBI compliance in India explained.
We work with founders in HSR Layout, Koramangala and Whitefield and with manufacturers in Peenya. That means the Karnataka side of the file, the enrolment and registration certificates and the GST reconciliation, is handled in the same engagement instead of being left for somebody else to find. The whole process runs online, and you are welcome to sit with us in person if you would rather work across a table.