Overview of Registration under the Foreign Contribution (Regulation) Act (FCRA)

Registration under the Foreign Contribution (Regulation) Act (FCRA) is a legal channel through which the Government of India is able to manage the acceptance and utilisation of foreign contributions by individuals, associations, and companies. It is managed by the Ministry of Home Affairs (MHA) with the aim of ensuring that such foreign contributions do not have a bearing on issues of National Security, Public Interest, and electoral processes, while still allowing relevant non-governmental organizations, trusts, societies, and Section 8 Companies that are involved in sectors such as education, health, poverty alleviation, environment, culture, and religion, among others, access foreign funds. This is normally done for a period of five years and involves compliance with specific requirements, including the maintenance of prescribed FCRA accounts in banks, submission of annual returns, and the use of such foreign contributions strictly for the stipulated objects of such organisations.

What is FCRA Registration?

FCRA registration is an official endorsement provided under the Foreign Contribution (Regulation) Act, 2010, that allows eligible individuals and entities in India to receive foreign contributions and helps ensure that these contributions are regulated and used for the specified purposes only. The legislature has strictly defined foreign contributions to include donations, contributions, transfers, or securities of any kind that flow from abroad and can happen in kind or article forms and states that receipt of these contributions without prior permission or registration under the Act cannot happen. Organisations involved in social, cultural, educational, religious, or economic activities and those that are non-governmental organisations, charitable trusts, or Section 8 companies, need to apply for registration of FCRA to get foreign contributions on a continuing basis. 

This is done online through the MHA’s FCRA portal, and upon successful application, these entities are granted a registration certificate that remains valid for a fixed period of time, which is roughly five years, and can continue for further periods on renewals and continued compliance. However, the intent behind registration is that foreign contributions will not decrease and will continue to flow in a manner that remains regulated and does not affect the integrity of national security and the functioning of democracy.

Purposes behind FCRA registration

The purpose behind obtaining FCRA registration is stated as below:

• The Control of the acceptance and utilisation of foreign contributions for the purpose of using them for genuine, allowable purposes.
• Protection of national interests so that foreign money does not affect the sovereignty, integrity, or security of India.
• Impose a restriction on foreign influence in the area of election politics, government officials, media, and political organisations.
• Ensure transparency and accountability in the reception and expenditure of foreign funds by NGOs and other entities.
• Ensure foreign contributions relate to social, cultural, educational, religious, and economic developments, in accordance with FCRA requirements.
• Establish a reporting and monitoring system by means of special bank accounts and filings.
• Compliant organisations should be incentivised by providing an easy and time‑bound registration and renewal process for foreign funding.

Eligibility for Registration of FCRA

Below given are the criteria for registration for FCRA:

• The applicant must be a registered entity in India, like a society, trust, or Section 8 company (non-profit company).
• It needs to have a clear cultural, economic, educational, religious, or social program as its primary purpose.
• Generally speaking, it is supposed to have existed and been operative at least three years before applying.
• The organisation should have spent a minimum of ₹10-15 lakh in the past three years on its prime charitable activities, excluding administration.
• It must keep duly audited accounts and activity reports for the previous three years.
• The office-bearers and the organisation should have clean records and should not be involved in any political and anti-national activities and offences.
• It shall have registration on the NGO Darpan portal and an FCRA bank account opened as prescribed (SBI, New Delhi main branch).

Documents required for FCRA Registration 

In the FCRA registration, the important documents relate to the proof of legal status, business activity, finance, and authorised control of the entity concerned.

• Self-certified copy of the registration certificate or trust deed of the organisation, as applicable, which is a society, trust, or Section 8 Company.
• Self-certified copies of relevant pages of the Memorandum of Association / Articles of Association indicating objects.
• Activity report of the organism concerning the past three years. It describes the key projects and the beneficiaries.
• Audited financial statements covering the previous three financial years (income & expenditure, receipts & payments, balance sheet) reflecting expenditures on the programmes.
• Resolution of the governing body authorising the making of an application for registration under FCRA and empowering the chief functionary to sign and submit the application.
• List of members and key office bearers of the governing body with their contacts and identification details.
• FCRA-compliant bank details and a copy certification evidencing the assigned FCRA bank account, necessarily SBI and the New Delhi main branch, and any utilisation accounts, if required.
• Scanned copies of signatures, photos, and affidavits/declarations of important functionary(s) as specified in the format and size as prescribed on the FCRA website (Form FC-3A)

Process to apply for FCRA registration

A detailed process for FCRA registration is given below:

Pre-registration preparations

Ensure that the entity is properly incorporated (society, trust, or Section 8 Company) with a well-defined charitable or developmental objective. Obtain NGO Darpan (NITI Aayog) registration and finalise an FCRA-designated bank account in the identified SBI New Delhi branch, along with the use accounts in PFMS-compliant banks.

Collecting Documents and Financials

Combine the founding documents (Trust Deed, Society MoA, Section 8 documents), registration documents, and bye-laws. Prepare audited financial statements and income-expenditure statements for the previous three years, showing the level of obligatory spending on core business, and activity reports.

Access the FCRA Online Portal

Go to the FCRA online services website (fcraonline.nic.in), and generate a user ID and password by registering on the website. Log in and choose the correct option, which would be “FCRA Registration” and the required application form, usually Form FC-3A for registration and FC-3B for prior approval, as the case may be.

Fill out the online application form.

Organisational information, including its legal structure, registration number, address, purpose, and its characteristics (social, cultural, educational, religious, and economic). Details of important office-bearers of the organisation (name, Aadhaar number, and PAN number) and the bank account details of the designated FCRA account, as well as the activities and expenditures carried out by the organisation in the previous three years, need to be provided.

Upload Supporting Documents

Upload PDF copies of registration certificates, foundation documents, the resolution passed by the governing body for applying for FCRA, and the latest list of the governing body. Submission of audited financials, activity reports, NGO Darpan registration, Bank confirmation letters and other documentations mandated by the MHA.

Payments of fees and filings

The applicant must pay the required government fee for registration under the FCRA. This is also done online through the payment gateway provided. After verifying all the entries and documents, submit the application online; all the documents will be permissible only in electronic format, and hard copies shall not be entertained.

Review, verification, and approval

MHA is evaluating their application and may ask for details or other documentation, including field-level validation by local authorities concerning their activities and credentials.

If satisfied with the fulfilment of the FCRA requirements by the organisation and its principal functionaries, and provided foreign contribution is not likely to affect the national interest adversely, MHA issues the registration certificate under FCRA, valid for five years, requiring renewal within a specified time.

Benefits of FCRA registration 

The benefits of registration under FCRA are stated below :

• Facilitates NGOs and other eligible organisations in collecting foreign donations, grants and contributions from abroad.
• Strengthens credibility and trust among international donors, multilateral institutions, and partners in CSR, as it means government screening and regulatory approvals are in effect.
• Indicates a clear intention by the government towards
• Enhances resource mobilisation to access bigger pools of international philanthropic and developmental funds, other than local ones.
• Enables organisations to develop and execute projects in the sectors of health, education, livelihood, and environment through foreign funding support on a long-term basis.
• Helps to create a streamlined legal framework regarding receipt, use, and reporting of foreign money by utilising bank accounts.
• Promotes prudent management of finances, internal control, and governance practices because of audited financial statements and utilisation reports.
• Assists in organisational visibility and may end up making FCRA-approved entities more appealing in terms of partnerships and consortia for international developments.
• Reduces legal risk of penalty, prosecution, and/or cancellation resulting from receipt of foreign funds without registration and/or approval.
• Enabling smoother operations of banking transactions for foreign inflows, since banks can credit the foreign monies into the specific FCRA accounts.
• It supports national priority alignment in ensuring foreign funds go into permissible and welfare-oriented activities and not into the restricted or political streams.

Conclusion

FCRA registration is a crucial legal requirement that facilitates Indian entities in accessing and exploiting foreign contributions in a manner consistent with security, accountability, and transparency norms in the Indian context. In regard to non-governmental organisations and other similar entities, obtaining registrations and remaining compliant with or renewing their FCRA registrations is crucial in accessing sustainable foreign funding while remaining consistent with the aims and limitations of the specific law.