Everything you need to know about FIFP Approval

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Everything you need to know about FIFP Approval

FIFP refers to the Foreign Facilitation Portal launched by the Government of India for investors. The portal is managed by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry. It facilitates investors in Foreign Direct Investment (FDI). FIFP approval is required for companies that aren’t eligible for automatic approval.

Role of FIFP in facilitating investors in FDI

Foreign direct investments (FDI) are investments which a company makes into another company that is located in another country. In most cases, FDI takes place when investors establish foreign business operations or take hold of foreign business assets. FDI has substantial influence when it comes to decision-making of a foreign business. Earlier, the FDI approval’s applications falling under the Government Approval Route used to get processed by Foreign Investment Promotion Board (FIPB) after which they had to go through different ministries and departments for approval. This entire process would require plenty of time. This is why FIFP was introduced - for facilitating speedy application process. 

Sectors that Require FIFP Approval

There are 11 sectors which need approval for investments from international companies. They are the following:

Objectives of FIFP

The objectives of FIFP are mentioned below:

• To boost FDI investments
• To establish departmental transparency during the approval process
• To boost the investment process by promoting it to domestic and foreign businesses as well as Non-Resident Indians (NRIs).
• To digitize the process of approval and communication
• To notify investors of any changes to the FDI policy. 

Documents Required for FIFP Approval

The following documents are required for FIFP Approval:

• Certificate of Incorporation (Telecom Company) 
• Proposal for Foreign Investment
• Board resolution of the Investors and Investees
• Investor and Investee’s Audited Financial statement of the previous financial year
• Name and Details of all Foreign Investors
• Telecom License Agreement
• Signed copies of any of the applicable agreements:
  • Investment Agreement
  • JV Agreement
  • Shareholders Agreement
  • Share Transfer Agreement
  • Technology Transfer
  • Trademark Assignment Agreement, if applicable
• Compliance Reports for Downstream Investment(s)
• Copies of relevant approvals connected with the current proposal, such as:
  • Government
  • FIPB
  • SIA
  • RBI
• Copies of Foreign Inward Remittance Certificate(s) (FIRCs) 
• Certificate of Statutory Auditors as mandated in the FDI Policy
• Letter of authorization for the person(s) filing the application
• Security Clearance Form from MHA, if required
• Telecom Operator’s detailed report
• AoA
• MoA
• Copy of any relevant government approvals where were obtained in the past 

FIFP Approval Process

Read the steps mentioned below to know how to get FIFP approval:

• In order to get FIFP approval, the applicant has to submit an FDI proposal on the portal in the format that is prescribed, along with the necessary documents.
• Within 2 days, the Department of Industrial Policy and Promotion (DIPP) will notify the Administrative Ministry/Department (competent authority) concerned and e-transfer the proposal to them.
• In case a digitally signed application is provided, a physical copy of the application is not required for submission. Competent authorities are mentioned in SOP.
• The relevant Administrative Ministry or Department would be the competent authority for the granting of post facto approvals for FDI with regard to sectors/activities that are currently under automatic route but previously required government approval. DIPP will designate the Administrative Ministry or Department in case of doubt. This Administrative Ministry or Department will handle the application and make the final decision.
• Competent authorities can’t replicate an inter-ministerial organization within their own ministries or Departments in order to confer approval.
• After receiving a proposal, DIPP would forward it to the Reserve Bank of India (RBI) for feedback regarding the Foreign Exchange Management Act within two days. 
• Once a proposal is received, DIPP will send it to the Reserve Bank of India (RBI) to get feedback which is in accordance with the Foreign Exchange Management Act. This typically takes 2 days. If the proposal requires security clearance, then it has to be forwarded to the Ministry of Home Affairs. 
• The Ministry of Home Affairs must provide security clearance for investments made in civil aviation, defense, telecom, satellites, broadcasting, private security firms, mining and minerals in some circumstances, and investments from Pakistan and Bangladesh.
• If the proposals have any specific issues that require clarification regarding FDI policy, it shall be dealt with by DIPP. DIPP will provide clarification on such issues in about 15 days.
• Ministries or departments that are consulted regarding a proposal shall upload their comments on FIFP within 1 month. If there are no comments, it means that they have nothing to say from their end. The Ministry of Home Affairs shall provide its comments within a time frame of 1.5 months (generally). If not, it’ll inform about the time frame for providing its comments. 
• The application will get verified by the competent authority. This authority might ask for additional information or documents if needed within 7 working days. As per the SOP, the scrutiny and comments from all the ministries or departments should be conveyed within 1.5 months and intimation of approval or rejection should be conveyed within 14 working days.
• In case of proposals that involve FDI inflow over Rs 50 billions, they have to be placed before Cabinet Committee on Economic Affairs (CCEA) within the above timelines. CCEA will issue the letter within 7 working days after its decision.
• In case the competent authority rejects FDI proposal from its end or a situation in which additional approval conditions need to be stipulated, the competent authority must seek concurrence from DIPP within 10-12 weeks from the date on which the proposal was received. 

Conclusion

Foreign Facilitation Portal (FIFP) was launched by GOI for facilitating the investors in the Foreign Direct Investment. The portal is managed by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry. It facilitates investors in Foreign Direct Investment (FDI). Earlier, the FDI approval’s applications falling under the Government Approval Route used to get processed by Foreign Investment Promotion Board (FIPB) after which they had to go through different ministries and departments for approval. This entire process would require a good amount of time. FIFP approval has made things quick and easy for the investors now! If you need assistance in FIFP approval of telecom, connecting with Registrationwala will be your best bet! Our team comes with years of experience and can help you to obtain FIFP approval in a speedy manner.

Frequently Asked Questions

Q1. What is FIFP?

A. FIFP refers to the Foreign Facilitation Portal launched by the Government of India for investors. The portal is managed by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry.

Q2. What do you mean by FDI?

A. Foreign direct investments (FDI) are investments made by a company into another company that is located abroad. FDI usually takes place when investors establish foreign business operations or take hold of foreign business assets. FDI has substantial influence when it comes to decision-making of a foreign business. 

Q3. What are the objectives of FIFP?

A. The objectives of FIFP are (i) to boost FDI investments (ii) to ensure departmental transparency during the approval process (iii) to boost the investment process by promoting it to domestic and foreign businesses as well as Non-Resident Indians (NRIs) (iv) To digitize the process of approval and communication and (v) to notify investors of any changes to the FDI policy. 

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