How to get FCRA Registration in India?

Why is FCRA Registration Required?

FCRA Registration in 2010 Foreign Contribution (Regulation) Act, 2010 was enacted with a view to regulating any kind of foreign contribution or foreign hospitality accepted by any individual or association.  This was done to consolidate all the laws and relating rules and regulations. This created a transparent system for E-governance of FCRA related activities done by any individual or organization.

When is FCRA Registration Required?

As per Section 6 (1) of Foreign Contribution (Regulation) Act, 2010 if any NGO is planning to receive any foreign contribution or donation either in cash or in kind, then it is required to obtain FCRA Registration. It is a mandatory requirement irrespective of the composition of the NGO including Trust, Society or Section 8 Company.

Restrictions on Foreign Contribution?

As we have just discussed FCRA was introduced with a view to regularizing the foreign contribution. This transparency in the activities was introduced with an objective to discourage any activity which is against the national interest.

Section 12 (4) (g) of the Act specifies that a person registered under FCRA can accept any amount of foreign contribution only if:

• Accepting such contribution does not lead to incitement of an offense or
• Such acceptance will not endanger life or cause any sort of physical harm to any person

How to Accept Foreign Contribution?

In order to receive any form of foreign contribution, FCRA Registration is a mandatory requirement. We have already covered that part. But who can register and how is the remaining question.

The person filing for FCRA registration must be a registered under an existing statute. They can include:

• Trusts registered under Indian Trusts Act, 1882 or
• Society registered under Societies Registration Act, 1860^[1] or
• Company registered under Section 8 of Companies Act, 2013 etc.

However, not every organization is eligible for proper registration under FCRA. FCRA Registration can be received if following mentioned two ways:

1. FCRA Registration: For this, the applicant is required to be registered and operational for at least 3 years.
2. Prior Permission: When the applicant is not eligible to apply for the first category due to being in their formative years of business, it can apply for prior approval.

Eligibility Criteria for Foreign Contribution?

Following are the pre-conditions to be satisfied before receiving any foreign contribution:

• The main objective of the receiver must be served in cultural, economic, educational, religious or social platforms and it must be already working in such area.
• FCRA registration or prior permission is a mandatory requirement.
• It is not prohibited under Section 3 of FCRA, 2010

Validity of Registration 

FCRA Registration granted under the Act does not come with lifetime validity; it expires after 5 years from the date of grant of such registration.

On the other hand, the validity of prior permission will be earlier of the two;

• 5 years from the date of approval or
• When the foreign contribution for which the permission was granted is fully utilized.

The registered person will be required to file for renewal at least 6 months before the expiry of the registration period. However, in case the applicant has multi-year on-going projects this renewal application is required to be filed at least 12 months before the expiry date.

How is Registration different from Prior Permission under FCRA?

As discussed in this article in order to obtain registration under FCRA, there are two separate ways to do that; Proper FCRA registration process and Prior approval. There is the difference on the basis of registration, eligibility and prior requirements. Below we have listed out few basic features of both these cases.

For Proper Registration: This registration is for established entities. The applicant is required to fulfill the following pre-conditions:

• At least 3 years must have elapsed from its date of registration.
• The applicant must have done a reasonable amount of work under public interest that is stated in the objects.
• In the preceding 3 years, the applicant must have spent Rs.10, 00,000/- for implementation and furtherance of its main objective.

For Prior Permission: The entities which are in the formative stages i.e. not 3 years have elapsed from their date of the establishment are required to apply for prior permission. NO work experience in the field is required.

Following are the pre-conditions to be satisfied with prior approval:

• There is a specific project for which application is filed.
• The contribution is received from a specific contributor
• An approval letter from the contributor is to be submitted along with the application.

Read our article: Renewal Procedure of FCRA Registration