FEMA Valuation Certificate for FC-GPR and FC-TRS
By CA V. Viswanathan, FCA, ACS, CFE, IBBI Registered Valuer (IBBI/RV/03/2019/12333). V Viswanathan & Associates, Chartered Accountants, FRN 013713S. Law stated as at 13 November 2026.
A FEMA valuation certificate states the fair value per share of an unlisted Indian company so that the bank can check the price of a foreign investment. It is required when shares are issued to a non-resident (reported in Form FC-GPR) or transferred between a resident and a non-resident (Form FC-TRS). Under Rule 21 of the FEMA (Non-debt Instruments) Rules, 2019 it may be signed by a chartered accountant, a SEBI-registered merchant banker or a practising cost accountant, and it must not be more than 90 days old on the date of investment. CA V. Viswanathan issues these certificates and serves clients across India from Chennai.
What is a FEMA valuation certificate?
It is a signed certificate stating the fair value per share of an unlisted Indian company on a stated date, worked out by an internationally accepted pricing methodology on an arm's length basis. The company or the resident party gives it to the authorised dealer bank, which checks the transaction price against it before the foreign investment is reported to the Reserve Bank on the FIRMS portal.
The certificate exists because Rule 21 of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 sets a price limit on every issue or transfer of equity instruments between a resident and a non-resident. Without the certificate the bank has nothing to test the price against, and the reporting form cannot be approved.
When is the certificate required?
| Transaction | Reporting form | Price test | Certificate needed? |
|---|---|---|---|
| Unlisted company issues shares or CCPS to a non-resident | Form FC-GPR | Issue price not less than fair value | Yes |
| Resident sells shares to a non-resident | Form FC-TRS | Price not less than fair value | Yes |
| Non-resident sells shares to a resident | Form FC-TRS | Price not more than fair value | Yes |
| Conversion of CCPS or CCDs held by a non-resident | Form FC-GPR for the original issue | Conversion price not below fair value at the time of issue | The certificate at issue fixes the floor |
| Non-resident subscribes to the memorandum on incorporation | Form FC-GPR | Face value permitted | No valuation; face value applies |
| Rights issue by an unlisted company | Form FC-GPR | Not less than the price offered to resident shareholders | No separate fair value test |
| Share swap | Form FC-GPR or FC-TRS | Valuation of both sides | Yes, but only from a merchant banker |
| Investment on a non-repatriation basis | Not reckoned as foreign investment | Pricing guidelines do not apply | No |
| Listed company | As applicable | Price under SEBI regulations | No fair value certificate |
Sources: Rule 21, FEMA (Non-debt Instruments) Rules, 2019; Master Direction on Foreign Investment in India (updated up to 15 June 2026), paragraphs 6.12 and 8; Regulation 4, Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019.
Who can sign a FEMA valuation certificate?
| Purpose | Registered Valuer | Merchant Banker | Chartered Accountant |
|---|---|---|---|
| FEMA: issue or transfer of shares of an unlisted company (Rule 21) | Not named by the rule | Yes, if SEBI-registered | Yes; a practising cost accountant also qualifies |
| FEMA: share swap | No | Yes. SEBI-registered merchant banker, or an investment banker outside India registered with its home regulator | No |
| Companies Act: the same allotment, if made on a preferential basis (Rule 13) | Yes. Required | Not sufficient | Not sufficient unless also a registered valuer |
A round with a foreign investor therefore usually needs two documents on one valuation date: the FEMA certificate, and a registered valuer's report for the Companies Act. CA V. Viswanathan signs the first as a chartered accountant and the second as an IBBI Registered Valuer (IBBI/RV/03/2019/12333), so the two cannot disagree.
What must the certificate state?
FEMA prescribes the standard, not a format. A certificate that a bank will accept without queries states:
- the name and CIN of the company, and the class of instrument valued
- the purpose: issue to, or transfer to or from, a person resident outside India under Rule 21
- the valuation date and the date of the certificate
- the method used, why it was chosen, and the key assumptions
- the sources of information and the extent of reliance on management
- the fair value per share, and for convertible instruments the conversion price or formula
- the signatory's name, membership number and firm registration number, with UDIN
The rule does not name a method. Discounted cash flow is the one most often used for a going concern; a net asset or market approach is used where it fits the company better. The valuer has to be able to defend the choice, because the bank and later the Reserve Bank can question it.
How long is the certificate valid?
The valuation certificate must not be more than ninety days old as on the date of the investment (Master Direction on Foreign Investment in India, paragraph 8). The limit does not apply where the price is worked out under SEBI regulations. A round that closes in tranches, or that slips, needs a fresh or updated certificate, so we date the valuation close to the Board resolution and the remittance.
What are the filing deadlines once the price is certified?
| Form | Who files | Due |
|---|---|---|
| Form FC-GPR | The Indian company that issues the shares | Not later than 30 days from the date of issue |
| Form FC-TRS | The resident transferor or transferee, or the non-resident holding on a non-repatriable basis | Within 60 days of the transfer or of the receipt or remittance of funds, whichever is earlier |
Both are filed through the Single Master Form on the FIRMS portal and approved by the authorised dealer bank. A delay of up to three years can usually be regularised by a late submission fee of ₹7,500 plus 0.025% of the amount involved for each year of delay, capped at the amount involved. An issue below fair value is a contravention that a late fee cannot cure; it is compounded by the Reserve Bank. Steps and documents for the filing are in our guide to FC-GPR and FC-TRS filing on FIRMS.
What goes to the bank with the certificate, and why are forms returned?
For Form FC-GPR the bank receives, with the valuation certificate:
- the foreign inward remittance certificate and the bank's KYC of the remitter
- a certificate from the company secretary on compliance with the Companies Act
- the Board resolution and the allotment details
In our experience a form comes back for one of a few reasons: a valuation dated after the allotment, or too long before it; a remitter whose name does not match the investor; an allotment made more than 60 days after the money was received; a price below fair value; or a missing company secretary's certificate. Each can be checked before the valuation date is fixed.
Worked example: fair value for an FC-GPR
Illustrative figures, not a real client. An unlisted company with 10,00,000 equity shares proposes to issue shares to a foreign investor for ₹5,00,00,000 at ₹250 a share. Free cash flows are projected for five years, discounted at 18%, with terminal growth of 4%. Net debt is ₹1,50,00,000.
| Period | Free cash flow | Discount factor at 18% | Present value |
|---|---|---|---|
| Year 1 | ₹1,20,00,000 | 0.8475 | ₹1,01,69,492 |
| Year 2 | ₹1,80,00,000 | 0.7182 | ₹1,29,27,320 |
| Year 3 | ₹2,50,00,000 | 0.6086 | ₹1,52,15,772 |
| Year 4 | ₹3,20,00,000 | 0.5158 | ₹1,65,05,244 |
| Year 5 | ₹4,00,00,000 | 0.4371 | ₹1,74,84,369 |
| Terminal value at end of year 5 | ₹29,71,42,857 | 0.4371 | ₹12,98,83,881 |
| Enterprise value | ₹20,21,86,078 |
- Terminal value: ₹4,00,00,000 × 1.04 ÷ (0.18 − 0.04) = ₹29,71,42,857.
- Enterprise value: ₹7,23,02,197 + ₹12,98,83,881 = ₹20,21,86,078.
- Equity value: ₹20,21,86,078 − ₹1,50,00,000 = ₹18,71,86,078.
- Fair value per share: ₹18,71,86,078 ÷ 10,00,000 = ₹187.19.
- Test: the issue price of ₹250 is not less than ₹187.19, so the price complies with Rule 21.
- Shares to be issued: ₹5,00,00,000 ÷ ₹250 = 2,00,000.
Had the parties agreed ₹200 a share, the issue would have been below fair value and the bank would not approve the FC-GPR. Had a non-resident been selling to a resident, the same ₹187.19 would have been the maximum price, not the minimum.
What documents are needed?
- Audited financial statements for the last three years, or since incorporation, and management accounts to the valuation date
- Projections for five years with assumptions
- Capitalisation table, shareholders' agreement and term sheet
- For a transfer: the share purchase agreement and details of the buyer and seller
- The investor's country, sector of the company and entry route, to confirm that the investment is permitted
- Earlier FEMA certificates and filings, if any
What is the process and how long does it take?
- Scoping call: which transaction, which form, and whether a Companies Act report is also needed.
- Engagement letter with a fixed fee and document list.
- Valuation and draft certificate, shared with management for factual confirmation.
- Signed certificate with UDIN, dated within the 90-day window.
- Support with queries from the authorised dealer bank on the FC-GPR or FC-TRS.
Reports are usually issued within 5–7 working days of complete information, and within 15 working days for complex cases. The clock starts when the last document is received, not on the date of engagement.
What does a FEMA valuation certificate cost?
Our fee for a FEMA valuation certificate starts from ₹35,000 + 18% GST. The figure depends on the number of instruments or companies to be valued, whether projections exist, and how many laws the same transaction has to satisfy. We quote a fixed fee after a first call and before any work starts. Statutory filing fees, stamp duty and any merchant banker's fee are separate.
Related valuations
This page covers the certificate only. Price rules for every other cross-border case, including downstream and overseas investment, are in our FEMA valuation guide for India. Convertible preference shares are covered in CCPS valuation in India.
Every valuation report we issue, with the law behind it and the person who must sign it, is listed on our valuation services page.
About V Viswanathan & Associates
- Chartered Accountants, FRN 013713S— Practising since 2012 from G-131, Spencer Plaza, Anna Salai, Chennai.
- IBBI Registered Valuer— Securities or financial assets, CA V. Viswanathan (IBBI/RV/03/2019/12333), registered 30 September 2019.
- FCA, ACS, CFE— Member of ICAI since 2012 and Fellow since 2017; company law, tax and forensic accounting in one practice.
- Across India— Serves clients across India from Chennai through video consultations and digitally signed reports.
Frequently Asked Questions
Who can issue a FEMA valuation certificate for FC-GPR?
For an unlisted Indian company, a chartered accountant, a SEBI-registered merchant banker or a practising cost accountant, using an internationally accepted pricing methodology on an arm's length basis (Rule 21 of the FEMA (Non-debt Instruments) Rules, 2019).
Is a registered valuer required for a FEMA valuation?
No. FEMA does not name a registered valuer. The Companies Act does, for a preferential allotment, so an issue of shares to a foreign investor usually needs both a FEMA certificate and a registered valuer's report.
How old can the valuation certificate be for FC-GPR?
Not more than ninety days as on the date of the investment, under the Reserve Bank's Master Direction on Foreign Investment in India. The limit does not apply where the price is worked out under SEBI regulations.
Is a valuation certificate needed for FC-TRS?
Yes. For a transfer of shares of an unlisted company between a resident and a non-resident, the price must be tested against fair value: a minimum when the non-resident buys, a maximum when the non-resident sells.
Which valuation method is accepted for FEMA?
Any internationally accepted pricing methodology on an arm's length basis. Discounted cash flow is the most common for a going concern; net asset value or a market approach is used where it fits the company better.
Can shares be issued to a foreign investor above fair value?
Yes. For an issue, fair value is the minimum price, so a higher price complies with FEMA.
Is a valuation needed when a foreign shareholder subscribes to the memorandum?
No. Shares taken by a non-resident on subscribing to the memorandum of association may be issued at face value, subject to the entry route and sectoral caps.
What is the deadline for filing FC-GPR and FC-TRS?
Form FC-GPR not later than 30 days from the date of issue of the shares. Form FC-TRS within 60 days of the transfer or of the receipt or remittance of funds, whichever is earlier.
What happens if shares were issued below fair value?
It is a contravention of the pricing rule that a late submission fee cannot cure. It has to be compounded by the Reserve Bank on an application.
How long does a FEMA valuation certificate take?
Usually 5–7 working days from complete information, and up to 15 working days for complex cases such as several classes of instruments.
Related Guides
Law stated as at 13 November 2026. Official sources: Master Direction on Foreign Investment in India (RBI), Master Direction on Reporting under FEMA (RBI), Companies Act, 2013 and rules (India Code). This page is general information, not advice on a specific transaction.
FEMA Valuation Certificate
Tell us the transaction and the remittance date and we will plan the certificate within the 90-day window.