What is Purpose Code P0006?
P0006 is one of the most important inward remittance purpose codes for Indian businesses. It is used when foreign capital comes into India specifically to purchase equity shares in an Indian company — this is the standard Foreign Direct Investment (FDI) code for equity infusions.
Whether you are a startup receiving seed funding from a foreign angel investor, a private company receiving a strategic investment from a foreign corporate, or a listed company allotting shares to a foreign portfolio under the FDI route, the inward remittance is tagged P0006. It is the mirror image of P0001 — P0001 is Indian money returning from abroad, while P0006 is foreign money coming in to invest in India.
See all RBI purpose codes
When to Use P0006
Use P0006 when your Indian company receives money from a foreign investor in exchange for equity shares. Common scenarios:
- A startup raises a seed or Series A round from a foreign VC fund and receives the investment amount in INR after currency conversion
- A private limited company allots new shares to a foreign strategic investor and receives the subscription amount
- An Indian company receives equity from its foreign parent or affiliate as part of a capital infusion
- A listed company issues shares to a foreign institutional investor under the FDI automatic route
- An LLP or company receives foreign equity investment under a permitted sector with or without government approval
Quick check: Is foreign money coming into your Indian company in exchange for equity shares? Use P0006. If it’s a foreign loan (not equity), use P0013 for ECBs. If it’s a foreign portfolio investment in listed shares, that’s P0009.
Wrong Code? Use These Instead
|
If your money is from… |
Correct code to use |
|
Foreign investment in Indian debt securities (bonds, debentures) |
P0007 |
|
Foreign investment in Indian real estate |
P0008 |
|
Foreign portfolio investment in listed Indian equity (secondary market) |
P0009 |
|
External Commercial Borrowing (foreign loan to Indian company) |
P0013 |
|
Non-resident deposits (NRE/FCNR/NRO) |
P0014 |
Documents to Keep Ready
|
Document |
Why you need it |
|
Share subscription agreement |
The primary legal document for the FDI equity allotment |
|
Board resolution for share allotment |
Indian company’s board approval for issuing shares to the foreign investor |
|
FCGPR filing with RBI |
Mandatory RBI reporting within 30 days of allotment under FEMA |
|
Valuation certificate (for unlisted companies) |
SEBI-registered valuer or CA certificate justifying the share price |
|
e-FIRA |
Official proof of inward remittance tagged P0006 — required for FCGPR filing |
|
KYC of foreign investor |
FEMA requires KYC documentation of the foreign investing entity |
What is an e-FIRA – and Why Does It Matter?
An e-FIRA (Electronic Foreign Inward Remittance Advice) is the official proof that foreign money entered India. It confirms the nature and purpose of the inflow, which matters for tax treatment, FEMA compliance, and audit trails.
Your bank generates it automatically once the funds land. You can usually download it from your internet banking portal or request it at your Forex desk. The e-FIRA will reflect the correct purpose code, which your CA or accounts team will reference during filings.
Did you know? Some banks take days to issue an e-FIRA. With Remit Circle, you can download yours instantly – at no charge – the moment your payment is credited. → Get your free e-FIRA via Remit Circle
Receive Inward Remittances Compliantly with Remit Circle
Getting the purpose code right on an inward remittance isn’t just a formality – a mismatch can cause payment holds, RBI queries, or incorrect tax treatment. Remit Circle is built to handle this for you.
Instant e-FIRA — Download your Foreign Inward Remittance Advice the moment funds are credited. No waiting on the bank, no Forex desk visits. Free.
Correct purpose code, every time — Remit Circle flags the right code for your transaction type before the payment is processed, so there are no mismatch holds at the bank.
Multi-currency support — Receive in USD, EUR, GBP, AUD and more. Funds settle directly into your Indian bank account at competitive rates.
Compliance-ready records — Every transaction comes with a clean audit trail, purpose code, amount, date, counterparty — so you and your CA are always on the same page.
Start receiving international payments with Remit Circle Open a free account in minutes. No minimum balance, no hidden fees. Get your e-FIRA instantly on every inward remittance. Open your free Remit Circle account →
Frequently Asked Questions
Q: What is RBI purpose code P0006?
P0006 is used when a foreign entity, company, fund, or individual, invests in an Indian company by purchasing its equity shares. It is the standard inward remittance code for Foreign Direct Investment in equity, covering both automatic route and government approval route investments.
Q: What is the FCGPR filing required after receiving FDI under P0006?
FCGPR (Foreign Currency, Gross Provisional Return) is the RBI reporting form that Indian companies must file within 30 days of allotting shares to a foreign investor. The e-FIRA showing purpose code P0006 is a key supporting document for this filing. Your Company Secretary or CA can assist with the FCGPR submission.
Q: Can a startup receive foreign angel investment under P0006?
Yes. Foreign angel investment in Indian startups is permitted under FDI rules, provided the sector is not on the prohibited list and the startup complies with pricing guidelines and FCGPR reporting. P0006 is the correct purpose code for the inward remittance, and the company must allot shares and file FCGPR within 30 days.
Q: What is the difference between FDI (P0006) and FPI (P0009)?
FDI (P0006) is direct investment in an Indian company - typically in unlisted companies or as a substantial stake in listed ones, with a long-term strategic intent. FPI (P0009) is portfolio investment by registered Foreign Portfolio Investors in listed Indian equity through stock exchanges, usually in smaller, tradeable positions. The distinction has legal, pricing, and reporting implications.
Q: Are there sectors where FDI under P0006 is restricted or requires government approval?
Yes. India's FDI policy divides sectors into automatic route (no prior approval needed), government route (prior FIPB/SIA approval required), and prohibited sectors (no FDI permitted). Examples of restricted sectors include defence, media, and insurance (caps apply), while some sectors like tobacco and gambling are prohibited. Always verify the current sectoral cap before accepting FDI.
Q: What happens if we don't file FCGPR within 30 days of allotment?
Delayed FCGPR filing attracts compounding fees under FEMA. The RBI has a compounding mechanism where companies can voluntarily disclose and pay a fee to regularise the delay. It is strongly advisable to file on time, your CS or CA should track the 30-day deadline from the date of allotment.
