All about FCRA Registration or Prior Approval - Eligibility, Procedure and Documents Required for FCRA Registration

FCRA Registration - Overview

Any association such as Charitable Trusts, Societies, Section 8 Company, NGO etc. having a definite cultural, economic, educational religious or social program can accept foreign contribution. However, such association should not be of a political nature. For accepting such contribution, the association must have been registered with Central Government under section 12(1) of Foreign Contribution Regulation Act (FCRA) read with section 11(1) of the FCRA.

Alternatively, it can accept foreign contribution with prior permission of Central Government, even if not registered as discussed above. The prior permission is for specific donor and specific purpose.

Thus, for accepting Foreign Contribution, there are two kinds of permissions:

1. Regular registration is required if the foreign contribution is or will be obtained on regular basis,

2. Prior permission (without registration) is required to be obtained when such foreign contribution is one time and not on a regular basis.

Eligibility and condition for granting FCRA Registration or FCRA Prior Permission

Section 12(4) of the FCRA contain various conditions and eligibility criteria for the purposes of obtaining registration under the FCRA or obtaining prior permission. These are discussed as under:

(a) the person making an application for registration or grant of prior permission

(i) is not fictitious or benami;

(ii) has not been prosecuted or convicted for indulging in activities aimed at conversion through inducement or force, either directly or indirectly, from one religious faith to another;

(iii) has not been prosecuted or convicted for creating communal tension or disharmony in any specified district or any other part of the country;

(iv) has not been found guilty of diversion or mis-utilisation of its funds;

(v) is not engaged or likely to engage in propagation of sedition or advocate violent methods to achieve its ends;

(vi) is not likely to use the foreign contribution for personal gains or divert it for undesirable purposes;

(vii) has not contravened any of the provisions of this Act;

(viii) has not been prohibited from accepting foreign contribution;

(b) the person making an application for registration under sub-section (1) has undertaken reasonable activity in its chosen field for the benefit of the society for which the foreign contribution is proposed to be utilised;

In this context, Rule 9(1)(f) of the Foreign Contribution (Regulation) Rules, 2011 (FCRA Rules) provides that A person seeking registration under clause (b) of sub-section (4) of section 12 of the Act shall meet the following conditions, namely:

(i) it shall be in existence for three years and have spent a minimum amount of rupees fifteen lakh on its core activities for the benefit of society during the last three financial years:

Provided that the Central Government, in exceptional cases or in cases where a person is controlled by the Central Government or a State Government may waive the conditions;

(ii) if the person wants inclusion of its existing capital investment in assets like land, building, other permanent structures, vehicles, equipment in the computation of its spending during last three years, then the chief functionary shall give an undertaking that the assets shall be vested henceforth with the person till the validity of the certificate and they shall be utilised only for the activities covered under the Act and the rules made thereunder and shall not be diverted for any other purpose till the validity of its certificate of registration remains valid.

(c) the person making an application for giving prior permission under sub-section (1) has prepared a reasonable project for the benefit of the society for which the foreign contribution is proposed to be utilised;

(d) in case the person being an individual, such individual has neither been convicted under any law for the time being in force nor any prosecution for any offence pending against him;

(e) in case the person being other than an individual, any of its directors or office bearers has neither been convicted under any law for the time being in force nor any prosecution for any offence is pending against him;

(f) the acceptance of foreign contribution by the person referred to in sub-section (1) is not likely to affect prejudicially—

(i) the sovereignty and integrity of India; or

(ii) the security, strategic, scientific or economic interest of the State; or

(iii) the public interest; or

(iv) freedom or fairness of election to any Legislature; or

(v) friendly relation with any foreign State; or

(vi) harmony between religious, racial, social, linguistic, regional groups, castes or communities;

(g) the acceptance of foreign contribution referred to in sub-section (1),—

(i) shall not lead to incitement of an offence;

(ii) shall not endanger the life or physical safety of any person.

Other Conditions

1. No person shall prefer a second application for registration or prior permission within a period of six months after submitting an application either for the grant of prior permission for the same project or for registration. (Rule 9(3) of the FCRA Rules)

2. Any person making an application for obtaining prior permission under clause (a) of sub-rule (1) shall have an FCRA Account. (Section 12(1A) and Rule 9(2)(d) of the FCRA Rules)

3. A person seeking prior permission for receipt of specific amount from a specific donor for carrying out specific activities or projects mentioned in clause (c) of sub section (4) of section 12 of the Act shall meet the following criteria, namely:

(i) submit a specific commitment letter from the donor indicating the amount of foreign contribution and the purpose for which it is proposed to be given;

(ii) for the Indian recipient persons and foreign donor organisations having common members, prior permission shall be granted to the person subject to it satisfying the following conditions, namely:

(A) the chief functionary of the recipient person shall not be a part of the donor organisation;

(B) seventy-five per cent of the office-bearers or members of the governing body of the person shall not be members or employees of the foreign donor organisation;

(C) in case of foreign donor organisation being a single individual that individual shall not be the chief functionary or office bearer of the recipient person; and

(D) in case of a single foreign donor, seventy-five per cent of the office bearers or members of the governing body of the recipient person shall not be the family members or close relatives of the donor.

Government Fees for FCRA Registration or Prior Approval

Rule 9(4) provides the Fees for the FCRA Registration or Prior Approval. The same is mentioned as under:

- Rs. 5,000 for application of grant of prior permission

- Rs. 10,000 for application of grant of registration

(the above fees is subject to change from time to time)

AADHAAR or passport (in case of foreigner) to be mandatory for the purpose of FCRA Registration or Prior Approval

Section 12A empower the Central Government to require Aadhaar number, etc., as identification document and provides that Notwithstanding anything contained in this Act, the Central Government may require that any person who seeks prior permission or prior approval under section 11, or makes an application for grant of certificate under section 12, or, as the case may be, for renewal of certificate under section 16, shall provide as identification document, the Aadhaar number of all its office bearers or Directors or other key functionaries, by whatever name called, issued under the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (18 of 2016), or a copy of the Passport or Overseas Citizen of India Card, in case of a foreigner.

Documents required for FCRA Registration or Prior Approval

- Self-certified copy of registration certificate/Trust deed etc., of the association

-Self-certified copy of relevant pages of Memorandum of Association/ Article of Association showing aim and objects of the association.

- Activity Report indicating details of activities during the last three years;

- Copies of relevant audited statement of accounts for the past three years (Assets and Liabilities, Receipt and Payment, Income and Expenditure) clearly reflecting expenditure incurred on aims and objects of the association and on administrative expenditure;

- Affidavit of each key functionary

- Seal of the Association

- Statement on Project and Activities

- A true copy of the resolution passed by the Governing Body of the NGO.

- A Copy of certificate issued by the Income Tax Authority under 80G & 12A of the Income Tax Act. (if any)

- Jpg file of signature of the chief functionary.

- Passport size of all members of Governing Body

- Detail about the current and past management of the trust.

FCRA Act having overriding effect over the FEMA and other general Acts

Since the FCRA is a special Act, its provisions will prevail over provisions of Foreing Exchange Management Act, 1999 (FEMA). Thus, even if there is permission for certain transactions (like donation, gift etc.) under FEMA, restrictions under FCRA will be applicable if the transaction is covered under provisions of the FCRA.