Entity Master Creation is a mandatory process for Indian entities that have received foreign investment to register with the FIRMS (Foreign Investment Reporting and Management System) portal of the Reserve Bank of India (RBI). This registration is required to ensure compliance with the Foreign Exchange Management Act (FEMA) and to enable the filing of foreign investment-related forms like FC-GPR, FC-TRS, etc.

What is Entity Master Creation?

The Entity Master captures the comprehensive details of foreign investments received by an Indian entity. It serves as the foundation for all subsequent filings related to foreign investments.

Who Needs to Create an Entity Master?

Indian entities that:

1. Have received foreign direct investment (FDI).
2. Have issued shares, debentures, or other eligible instruments to foreign investors.
3. Are required to report transactions under FEMA.

Steps to Create an Entity Master

Step 1: Gather Required Information

You will need:

1. Corporate Identification Number (CIN) for companies or LLPIN for LLPs.
2. Permanent Account Number (PAN) of the entity.
3. Entity Name and registered office address.
4. Details of Authorized Signatory:
   • Name, designation, email ID, and mobile number.
5. Foreign Investment Details:
   • Total foreign direct investment received.
   • Name(s) of foreign investors.
   • Details of shareholding percentages or debenture holdings.

Step 2: Register on FIRMS Portal

1. Visit the FIRMS portal: https://firms.rbi.org.in.
2. Click on “Registration of Entity (Business User)”.
3. Fill out the Business User Registration Form:
   • Enter details of the entity and authorized person.
   • Upload an authorization letter (on the entity’s letterhead) that authorizes the individual to act on behalf of the entity.
4. Submit the form, and wait for the approval from RBI.
5. Once approved, login credentials will be sent to the authorized email ID.

Step 3: Login and Access Entity Master

1. Log in to the FIRMS portal using the credentials provided.
2. Select Entity Master from the dashboard.

Step 4: Fill in Entity Details

Complete the Entity Master Form:

1. Basic Details:
   • Name, CIN/LLPIN, PAN, and address of the entity.
   • Date of incorporation and nature of business.
2. Foreign Investment Information:
   • Total foreign direct investment received since inception.
   • Names and nationalities of the foreign investors.
   • Details of instruments issued (equity, preference shares, etc.).
   • Percentage of FDI in the entity.
3. Bank Details:
   • Name and address of the Authorized Dealer (AD) Bank handling foreign exchange transactions.
4. Sectoral Caps:
   • Specify the applicable sectoral limits and ensure compliance with them.

Step 5: Verify and Submit

1. Review all the entered details carefully.
2. Submit the Entity Master Form for approval.

Key Compliance Points

1. Mandatory for All Foreign Investments:
   • Entities must complete Entity Master creation before filing any other forms (e.g., FC-GPR, FC-TRS).
2. Accuracy:
   • Provide accurate and updated details of foreign investors and investments.
3. Authorization Letter:
   • The format and content of the authorization letter should align with RBI guidelines.
4. Sectoral Caps and Guidelines:
   • Ensure foreign investment adheres to the sectoral caps and conditions prescribed under FEMA.

After Entity Master Creation

• The Entity Master must be kept up to date. Any change in foreign investment details or entity structure should be promptly updated.
• Once registered, the entity can file forms like FC-GPR, FC-TRS, etc., for reporting specific foreign investment transactions.

Would you like assistance with drafting the authorization letter, navigating the FIRMS portal, or completing the Entity Master registration?