An Indian business that has foreign investment or has invested outside India may have an annual RBI reporting duty even when no fresh transaction took place during the year. That duty is the Annual Return on Foreign Liabilities and Assets, commonly called the FLA Return.
The return records foreign liabilities and assets as at the end of March. It is different from transaction forms such as FC-GPR, FC-TRS and overseas investment reports. FLA return filing gives the Reserve Bank of India an annual position of the entity’s cross-border investments.
What Is The FLA Return?
The FLA Return is an annual FEMA report submitted to the RBI. It captures outstanding foreign direct investment received by an Indian entity and overseas direct investment made by it.
The reporting period follows the Indian financial year from April to March. The form generally asks for information for the latest March and the previous March, along with relevant financial and investment details.
It does not replace any approval, pricing or transaction filing required under FEMA.
Who Must File The FLA Return?
An Indian-resident entity must file when it has outstanding FDI liabilities or ODI assets as at the end of March for the latest or previous reporting year. Covered entities include:
- Companies incorporated under the Companies Act;
- Limited Liability Partnerships;
- SEBI-registered Alternative Investment Funds;
- partnership and proprietary firms; and
- Public Private Partnerships.
The trigger is the outstanding position, not whether money moved during the current year. A company that received FDI several years ago may still need to file while that investment remains outstanding. The same applies to an Indian entity holding an overseas subsidiary or joint venture. rbi.org.in
For example, if a Singapore parent still holds shares in its Indian subsidiary on March 31, the Indian company may need to file even without fresh funding. An Indian company holding a Dubai subsidiary must likewise report the outstanding foreign asset, even if no new remittance occurred.
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Who Is Not Required To File?
An entity need not file if it has no outstanding inward FDI or outward ODI as at the end of March for both the current and previous reporting years.
The RBI also clarifies that an entity with only foreign share application money, but no outstanding FDI or ODI at the reporting date, is not required to file on that basis alone. Similarly, shares issued to non-residents only on a non-repatriation basis are not treated as foreign investment for this return.
Inactivity, losses or the absence of fresh investment do not create an exemption if a reportable position remains. rbi.org.in
What Is The Due Date For FLA Return Filing?
The FLA Return must be filed by July 15 every year for the financial year ended on March 31.
The filing can be based on audited or unaudited financial figures. rbi.org.in
If the entity follows a different accounting year, it cannot substitute that closing date. The FLA data must still be prepared for the previous March and latest March, based on the entity’s internal assessment.
What If The Accounts Are Not Audited By July 15?
The entity should not delay filing merely because its statutory audit is incomplete. It may submit the return using available provisional or unaudited financial statements by July 15.
Once audited accounts are ready, the entity must request permission through the FLAIR portal to revise the return. After approval, it should update the applicable year’s filing using audited figures.
The RBI’s current FAQ says the revision should be completed as soon as the audited statements are available, regardless of the amount or percentage of variation. rbi.org.in
What Information Is Reported In The FLA Return?
The form collects information about the reporting entity and its cross-border financial position. Depending on the facts, the required data may include:
- identification and business details of the Indian entity;
- financial information such as paid-up capital, reserves, profit or loss and sales;
- foreign investor details and the country of the immediate investor;
- overseas equity held in subsidiaries or joint ventures; and
- other foreign assets and liabilities covered by the form.
Foreign investment is generally reported using the country of the immediate investor, not merely the country of the ultimate parent. Domestic assets or liabilities are not included simply because they are denominated in foreign currency. rbi.org.in
The entity does not upload its balance sheet or profit and loss account, but should use them to verify the figures.
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How Is The FLA Return Filed?
Most entities file online through the RBI’s Foreign Liabilities and Assets Information Reporting portal, or FLAIR portal.
Register The Entity
A first-time filer must register as a new entity user. Registration requires entity details, PAN, registration number, address and authorised-person details. The prescribed verification and authority letters must also be uploaded.
Prepare The Financial And Investment Data
Reconcile foreign investment records with the balance sheet, FEMA filings and the previous FLA Return. Confirm both March-end positions.
Complete And Submit The Form
Enter the applicable financial, FDI, ODI and other capital details. Confirm that investor countries, ownership percentages and balances are consistent. Preserve the acknowledgement.
SEBI-registered AIFs follow a different operational process. They register on FLAIR and obtain the latest AIF format from the RBI’s FLA team for email-based filing. rbi.org.in
Common FLA Return Filing Mistakes
One common mistake is treating the FLA Return as a transaction return and skipping it because no fresh remittance occurred. Another is reporting only the latest year even though the form needs data for two March-end reference periods.
Other errors include using the ultimate parent’s country instead of the immediate investor’s country, omitting other capital, mixing domestic and foreign positions, or failing to revise provisional figures.
For a new foreign subsidiary, retain the allotment records, FC-GPR acknowledgement, investor details and March-end shareholding information from the start.
What Happens If The FLA Return Is Filed Late?
Failure to file by July 15 is treated as a FEMA reporting violation. Under the RBI’s Late Submission Fee framework, delayed FLA Returns generally attract an LSF of ₹7,500 per return.
The LSF facility is available for up to three years from the original due date. If an entity neither files on time nor regularises the delay through the permitted process, penal action under FEMA may follow. rbi.org.in
For an earlier year that was missed, permission must be obtained from the RBI before filing through the portal.
Late filing can surface during funding or due diligence. Review the position each April rather than discovering a default during a transaction.
Conclusion
The simplest way to determine whether FLA return filing applies is to check the balance sheet for outstanding inward FDI and outward ODI as at the latest and previous March-end dates.
If either period contains a reportable foreign position, the return may be required even if the business had no fresh cross-border transaction during the year.
Mark July 15 on the annual FEMA compliance calendar. If audited accounts are pending, file provisional figures on time and revise them after the audit.
FAQs
Yes, while the entity has reportable outstanding FDI or ODI at the relevant March-end dates. No fresh transaction is needed to trigger the annual filing.
If there is no outstanding inward FDI or outward ODI for both the current and previous March-end reference dates, the entity need not file.
However, inactivity alone does not create an exemption if foreign investment remains outstanding.
Yes. File provisional or unaudited figures by July 15. Once the audited financial statements are available, seek permission through the FLAIR portal and revise the return.
No. The RBI does not require the balance sheet or profit and loss account to be attached to the online FLA Return.
No. The FLA Return is an annual position return. FC-GPR, FC-TRS and overseas investment reports cover separate transactions and must be filed when independently applicable.
