FIRC certificate explained: What it is and who needs it in India

If you are an exporter or freelancer based in India, you will likely receive payments in foreign currency. In such cases, possessing a Foreign Inward Remittance Certificate (FIRC) is crucial. This vital document serves as proof of receipt of funds from abroad and comes in different types. Whether you’re new to the concept or seeking to deepen your understanding, read more about the FIRC certificate and its significance for exporters and freelancers in India.

What is a FIRC?

A FIRC, or Foreign Inward Remittance Certificate, is a document that serves as proof of inward remittance to India. It is required for individuals or businesses who receive payment in foreign currency, acting as evidence of the transfer.

Obtaining a FIRC certificate can take over six months. The recipient, also known as the beneficiary, receives the money through an authorised dealer (AD) of the Reserve Bank of India (RBI).

To apply for a FIRC, the beneficiary must clearly state the purpose of the remittance when submitting a request to a bank.

Who needs a FIRC certificate in India?

If you’re an Indian seller or service provider receiving international payments, a FIRC is a crucial document you need to have in your possession. But that’s not all – there are other scenarios where individuals might also require a FIRC.

Here are some examples:

• Freelancers receive compensation in foreign currency.
• e-commerce shops with customers paying in foreign currency.
• Salaried individuals receive compensation in foreign currency.

Now that we’ve established the various situations where a FIRC certificate is necessary, let’s delve into how you can obtain this vital certificate.

How to apply for a FIRC certificate in India

Suppose you’re a business that has credited a payout to an Indian beneficiary. In that case, your beneficiary will likely need a Foreign Inward Remittance Statement (FIRS) certificate. This certificate is also known as Foreign Inward Remittance Advice (FIRA) or Advice. The FIRS can be requested from the bank that processed the foreign transaction.

It’s important to note that the e-FIRS is considered equivalent to the FIRC. Therefore, you only need to request the FIRC if the beneficiary bank differs from the bank that issued the AD code.

Once the filled application is submitted to the bank, a signed physical copy of the FIRS certificate is sent to the beneficiary’s address. Therefore, it is crucial to retain the original copy, as authorised dealers (AD) will not issue duplicates.

When will I receive the FIRC?

After verifying all the documents, the bank generates an Inward Remittance Message (IRM) on the government export portal, Export Data Processing and Monitoring System (EDPMS). This IRM number is referred to as the FIRC number. Once the payment is made, the beneficiary bank will provide the FIRC either electronically or in physical form.

What is the difference between FIRC and FIRA?

FIRA, also known as Foreign Inward Remittance Advice, serves as legal proof of receipt of foreign currency by exporters and freelancers in India. It is issued by the bank that processes the foreign-currency transaction upon the beneficiary's request. The beneficiary needs to provide the account number, transfer amount in foreign and Indian currency, and the date and purpose of the transfer while making the request. Once the request is submitted, the bank verifies the details and uploads payment details to EDPMS. Subsequently, an IRM number or e-FIRC number is generated on the portal. The beneficiary can download the e-FIRC or Advice from the portal using this number.

FIRA and FIRC certificates differ in who issues them and for what purposes they are used. FIRC is issued for Foreign Direct Investments (FDI) or Foreign Institutional Investments (FII) for Physical Foreign Inward Remittance Certificates and for exports of goods, software, and services for Electronic FIRCs (e-FIRC). On the other hand, FIRA is issued for all other use cases and is sufficient to prove inward remittance to an Indian bank account for exporters.

How does Winvesta help?

Winvesta offers an alternative method for receiving payments from your international clients. Our virtual global collection accounts can lower transaction costs and help you receive your FIRA certificate faster, at no cost. You can receive payments from 180+ countries in 30+ currencies and withdraw earnings to INR in as little as 1 day, with rates starting at $3 + 0.99%!

Once your funds are transferred to your Winvesta virtual multi-currency account, we’ll promptly issue a Foreign Inward Remittance Advice (FIRA) to provide you with quick access to your funds. If you require a Foreign Inward Remittance Certificate (FIRC), you can simply take the FIRA to your bank, and they will issue the FIRC based on it. We make the process of acquiring FIRA faster, simpler and cheaper for you.

Conclusion

Foreign Inward Remittance Certificate (FIRC) is a crucial document for individuals or businesses in India who receive payments in foreign currency. It serves as proof of inward remittance and is required in various scenarios, such as freelancers, e-commerce shops, and salaried individuals receiving compensation in foreign currency. The process of obtaining a FIRC can be lengthy. But Winvesta offers quick access to funds with a Foreign Inward Remittance Advice (FIRA), which can be taken to the beneficiary’s bank to obtain a FIRC based on it.

Open your Winvesta account today!