FEMA Form 1 Filing for LLP
Foreign Investment in Indian LLP, Reporting, and Compliance

A Limited Liability Partnership (LLP) is an increasingly popular business structure in India, combining the flexibility of a partnership with the limited liability of a company. For foreign investors — overseas companies, foreign nationals, and NRIs investing on a repatriable basis — investing in an Indian LLP is permitted under FEMA’s Automatic Route for most eligible sectors. However, the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (FEMA NDI Rules) create a distinct compliance framework for LLP foreign investment that is structurally different from company FDI: LLPs receive “capital contributions” from partners (not “shares” as in a company), so the reporting form and documentation requirements differ from the Form FC-GPR used for company FDI. The FEMA Form 1 for LLP — formally the “Foreign Investment in LLP” reporting form on the FIRMS portal at firms.rbi.org.in — must be filed by the Indian LLP within 30 days of receiving the foreign partner’s capital contribution. Non-filing within this window is a FEMA violation, just as with the 30-day FC-GPR deadline for companies.

N D Savla & Associates, Chartered Accountants based in Mumbai, handles the complete FEMA compliance package for Indian LLPs receiving foreign investment: sector eligibility verification under the DPIIT FDI Policy at dpiit.gov.in, valuation of the LLP capital contribution, documentation of the foreign partner’s capital receipt and KYC, FEMA Form 1 filing on the FIRMS portal within 30 days, MCA filings for the new foreign partner (Form 11 and Supplementary LLP Deed), and annual FLA return filing (by 15 July every year) on the FIRMS FLAIR module. We also advise on profit repatriation by the foreign partner, transfer of LLP capital contribution between residents and non-residents, and FEMA compounding for LLPs that have discovered a delayed or missed Form 1 filing. For the company FDI framework (Form FC-GPR, FC-TRS, and FLA), see our FDI Filing with RBI guide

This page covers the complete FEMA compliance framework for LLPs with foreign investment: the legal basis under the FEMA NDI Rules, who can invest in an Indian LLP, which sectors permit LLP FDI, the FEMA Form 1 filing requirement and process, the LLP-vs-company FDI comparison, transfer of LLP capital contribution between residents and non-residents, annual FLA reporting for LLPs with foreign partners, profit repatriation, and FEMA compounding for LLP violations. For the broader FEMA consulting framework covering all types of entities and all FEMA transactions, see our FEMA Consultants India guide

FEMA NDI Rules, 2019 — Third Schedule for LLPs

Foreign investment in Indian LLPs is governed by the Third Schedule to the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (FEMA NDI Rules). The key provisions:

• An LLP can receive foreign investment under the Automatic Route if the sector in which the LLP operates allows 100% FDI under the Automatic Route for companies — and without any conditionalities that apply exclusively to companies (e.g., minimum capitalisation requirements that apply only to companies in sectors like single-brand retail)
• The foreign investment in an LLP is in the form of capital contribution by the foreign partner — not equity shares, not preference capital, not debentures. Only direct equity-equivalent capital contribution is permitted as the mode of foreign investment in an LLP
• The foreign investor can be: a person resident outside India (foreign national, foreign company) or an NRI investing on a repatriable basis (from NRE/FCNR-B funds)
• An Indian company or LLP with more than 50% foreign investment (as defined under FEMA) and whose management is controlled by such foreign investor is an “FDI-invested” entity — any downstream investment by it in another Indian entity follows FDI norms
• Conversion of an LLP with foreign investment into a company: permitted, subject to FEMA guidelines for such conversion

Who Can Invest in an Indian LLP Under FEMA?

• Foreign companies (companies incorporated outside India)
• Foreign nationals (individuals who are citizens of a country other than India)
• Non-Resident Indians (NRIs) investing on repatriable basis — from NRE account or FCNR(B) account
• Overseas Citizen of India (OCI) card holders investing on repatriable basis
• Foreign institutional investors, Foreign Portfolio Investors (FPIs) — subject to SEBI and RBI conditions for LLP investment

Sectors Where FDI in LLPs Is Permitted

FDI in LLPs is permitted under 100% Automatic Route in most sectors. However, there are important sector-specific restrictions:

• Permitted sectors (illustrative): manufacturing, IT services, consultancy and professional services, education, healthcare, trading, logistics, hospitality, financial services (subject to sector-specific conditions), construction and real estate development (not real estate business itself)
• NOT permitted: agricultural activities (crop cultivation, plantation activities), print media, activities in which FDI is not permitted at all (lottery, gambling, casinos)
• Sectors requiring Government Route for companies: even if the sector allows LLP FDI under Automatic Route, if the specific proposal requires government route for companies (due to security considerations or special conditions), the LLP FDI may also need Government Route — verify on a case-by-case basis
• Conditionalities that apply to companies but not LLPs: certain sectors require minimum capitalisation for foreign investment in companies (e.g., single-brand retail with more than 49% FDI requires 30% local sourcing). LLPs may not have the same conditionalities — verify the current DPIIT FDI Policy at dpiit.gov.in

The FEMA Form 1 for LLP (also referred to as the “Foreign Investment in LLP” form on the FIRMS portal) is the mandatory post-investment reporting form that every Indian LLP receiving foreign investment must file with the Reserve Bank of India. It is the LLP equivalent of Form FC-GPR for companies. Key aspects:

• Filing entity: the Indian LLP (the investee entity), not the foreign partner
• Trigger: receipt of capital contribution from the foreign partner (i.e., funds received in the LLP’s bank account from the foreign partner). If the foreign partner’s capital contribution is received in tranches, a Form 1 is required for each tranche
• Deadline: within 30 days of receipt of the capital contribution/consideration from the foreign partner
• Portal: FIRMS (Foreign Investment Reporting and Management System) at
• firms.rbi.org.in — under the LLP investment reporting module
• Mode: electronic filing on the FIRMS portal with digital signature of the designated partner or authorised signatory of the LLP

The Form 1 (LLP) requires the following key information:

• LLP details: LLPIN (LLP Identification Number from MCA), name of LLP, registered address, nature of business activity, NIC code, date of incorporation
• Foreign partner details: name, country of incorporation/residence, type of entity (company, individual, NRI, OCI), passport or company registration number, amount of capital contribution (in foreign currency and INR)
• Bank details: name of the AD (Authorised Dealer) bank through which the remittance was received, FIRC reference number, date of remittance
• Valuation details: valuation methodology, name of CA or Merchant Banker who performed the valuation, date of valuation report, fair value per unit of capital contribution
• LLP Agreement reference: date of the LLP Agreement or Supplementary Deed mentioning the foreign partner’s capital contribution

• FIRC (Foreign Inward Remittance Certificate): issued by the Indian bank confirming receipt of foreign currency from the foreign partner. The FIRC states: the amount received (in foreign currency and INR equivalent at the conversion rate applied), the name of the sender, and the purpose of remittance
• KYC of the foreign partner: Know Your Customer report on the foreign partner from the Authorised Dealer bank. Covers: name, address, country of residence/incorporation, nature of entity, bank account details, and a declaration on the source of funds
• Valuation certificate: issued by a SEBI-registered Category I Merchant Banker or a Chartered Accountant, certifying the fair value of the LLP’s capital contribution (per unit or per percentage of profit share) using an internationally accepted methodology. For most LLPs, the Net Asset Value (NAV) method or a Discounted Cash Flow (DCF) method is used
• LLP Agreement / Supplementary Deed: the executed LLP Agreement (or Supplementary LLP Deed, if the foreign partner is joining an existing LLP) mentioning the foreign partner’s name, their profit-sharing ratio, and their capital contribution amount
• Board resolution / Designated Partner resolution: resolution of the designated partners of the LLP approving the admission of the foreign partner and accepting the capital contribution
• LLPIN certificate: the LLP’s Certificate of Incorporation from MCA confirming the LLPIN and the registered name
• Partner’s details: for individual foreign partners — copy of passport; for corporate foreign partners — Certificate of Incorporation, articles of association, and board resolution authorising the investment in the Indian LLP

When a partner in an LLP (resident or non-resident) transfers their capital contribution to another person (resident or non-resident), the transfer must comply with FEMA’s pricing and reporting requirements. The LLP transfer is analogous to an FC-TRS filing for companies:

• Resident to Non-Resident transfer: the resident partner transfers their capital share to a foreign investor. The transfer price must be at or above the fair value of the LLP capital. FEMA Form 1 (or equivalent transfer reporting form on FIRMS) must be filed within 60 days of receipt of consideration
• Non-Resident to Resident transfer: the foreign partner exits by transferring their capital share to a resident Indian. The transfer price must be at or below the price at which the NR originally invested (subject to fair value). FEMA reporting on FIRMS within 60 days
• Non-Resident to Non-Resident transfer: transfer of LLP capital between two non-residents also requires FEMA reporting in some cases — verify current RBI guidelines on the FIRMS portal
• Valuation: for all transfers involving non-residents, a valuation certificate (same as for primary investment) is required to establish that the transfer price meets FEMA’s fair value requirements
• LLP Agreement amendment: every transfer of capital contribution in an LLP requires amending the LLP Agreement (Supplementary Deed) to reflect the new partner and removing the transferring partner — file Form 3 with MCA within 30 days of execution
• Capital contribution receipt/certificate: the incoming partner should receive a Capital Contribution Certificate from the LLP confirming their investment amount and profit-sharing ratio

FLA Annual Return — Mandatory by 15 July

Every Indian LLP with a foreign partner (i.e., any outstanding foreign capital contribution as on 31 March) must file the FLA Annual Return on the FIRMS portal at firms.rbi.org.in by 15 July each year. The FLA for LLPs covers:

• Foreign Liabilities — Equity Capital: the closing balance of the foreign partner’s capital contribution as on 31 March, plus any premium paid by the foreign partner above par value
• Foreign Liabilities — Re-Invested Earnings: the foreign partner’s proportionate share of the LLP’s retained profit (profit for the year × foreign partner’s profit share % − profit distributed to the foreign partner during the year). This component is frequently omitted by LLPs — see our
• FLA Return Filing guide for the complete re-invested earnings calculation methodology
• Foreign Liabilities — Other Capital: any inter-entity loans from the foreign partner to the LLP (treated as other capital in FLA, and must also comply with ECB norms if the loan is a formal ECB)
• The FLA obligation continues every year as long as the foreign partner holds their capital contribution in the LLP. Even if no new foreign investment was received in the current year, the FLA must be filed if the foreign partner’s existing investment is outstanding

MCA Annual Filings for LLPs with Foreign Partners

• Form 11 (Annual Return): filed annually within 60 days of the end of the financial year (30 May for LLPs with 31 March year end). Form 11 includes: list of partners (all partners, including foreign), contribution of each partner, and changes in partners during the year
• Form 8 (Statement of Accounts and Solvency): filed within 30 days of 6 months from the end of the financial year (30 October for 31 March year end). Includes: balance sheet, profit and loss account, and solvency statement. Signed by the designated partners and filed on MCA portal at mca.gov.in
• LLPIN and LLP Agreement maintenance: the LLPIN (LLP Identification Number) remains constant; any changes to the LLP Agreement (addition of partners, change in profit-sharing ratio, change in capital contribution) require filing Form 3 with MCA within 30 days of the change

One of the key advantages of the LLP structure for foreign investors is the ease of profit repatriation. Unlike a company (where the board must declare a dividend, and the dividend is subject to dividend distribution procedures and TDS), the LLP’s profits are allocated to partners as per the LLP Agreement on an ongoing basis, and the foreign partner can receive their profit share freely:

• Profit allocation: the LLP’s net profit for each financial year is allocated to the partners as per the profit-sharing ratio in the LLP Agreement. The foreign partner’s share of profit is credited to their current account in the LLP books
• Repatriation: the foreign partner can receive their profit share from the LLP directly to their foreign bank account through the LLP’s bank, via SWIFT transfer. This is repatriation of profit earned in India
• Tax on profit: the LLP’s profit is taxed at the LLP level (30% + surcharge + cess on income above Rs. 1 crore for LLPs). The profit allocated to the foreign partner is then exempt from further Indian income tax in the hands of the partner (Section 10(2A) of the Income Tax Act — partner’s share of LLP profit is exempt if the LLP has paid tax)
• TDS on profit repatriation: the LLP must deduct TDS under Section 195 of the Income Tax Act on the profit paid to the foreign partner. The TDS rate is the domestic rate or the applicable DTAA rate (whichever is lower, subject to the foreign partner providing a Tax Residency Certificate from their country of residence)
• Form 15CB for repatriation: for remittances above the threshold, the LLP’s CA must issue a Form 15CB certificate, and the foreign partner must file Form 15CA online before the bank processes the overseas remittance

LLPs that have received foreign investment without timely FEMA Form 1 filing, or that have violated FEMA’s pricing or sector requirements, must compound the violations with the RBI. Common LLP FEMA violations:

• Delayed Form 1 filing: the most common — Form 1 not filed within 30 days of capital contribution receipt. Even a single day’s delay constitutes a FEMA violation. The compounding fee is computed on the amount of the LLP capital contribution for the period of delay
• FDI in LLP in prohibited sector: receiving foreign investment in an LLP operating in agriculture, print media, or other prohibited sectors. This is a more serious violation requiring full compounding with disclosure of the violation and the return of the prohibited investment
• Pricing violation: the foreign partner received a disproportionately large profit share or capital share compared to their investment — i.e., the capital contribution was received below the fair value. Compounding is required to regularise the pricing discrepancy
• No LLP Agreement amendment: accepting a foreign partner’s capital without amending the LLP Agreement and filing Form 3 with MCA. While this is primarily a company law violation, the FEMA compliance for the capital contribution depends on a properly executed LLP Agreement, and the inconsistency can complicate the compounding
• Non-filing of FLA return: the LLP has foreign partners but has not been filing the FLA Annual Return by 15 July each year. This is an ongoing annual violation that must be regularised by filing all pending FLA returns and, if required, compounding with the RBI

LLP Act, 2008 and FEMA Permission for LLP FDI

The Limited Liability Partnership Act, 2008 introduced the LLP structure in India. However, initially, FDI in LLPs was not permitted under FEMA, as the LLP was a new entity type and the FDI Policy and FEMA regulations did not cover it. The RBI gradually opened LLPs to foreign investment through a series of circulars and policy changes from 2011 onwards. The Press Note 1 of 2011 (issued by DPIIT’s predecessor, DIPP) first permitted FDI in LLPs under the Government Route for sectors with 100% FDI under Automatic Route. Subsequently, the 2015 FDI Policy further liberalised LLP FDI, extending the Automatic Route to LLPs and removing several earlier restrictions.

FEMA NDI Rules, 2019 — LLP Investment Codified

The Foreign Exchange Management (Non-debt Instruments) Rules, 2019 consolidated all equity FDI provisions — for companies, LLPs, and other entities — into a single comprehensive framework. The Third Schedule of the FEMA NDI Rules specifically covers investment in LLPs and provides the current legal basis for LLP FDI. The 2019 consolidation replaced the earlier patchwork of individual FEMA regulations, providing a clearer and more comprehensive framework for LLP foreign investment compliance.

FIRMS Portal for LLP FEMA Reporting

Before the FIRMS portal was introduced (from 2018), FEMA reporting for LLP foreign investment was done through email-based reports to the RBI through the Authorised Dealer bank — a slower and more error-prone process. The FIRMS portal digitalised LLP investment reporting, enabling real-time FEMA filing for Form 1 and annual FLA returns for LLPs.