🧾 Introduction

Indian companies, LLPs, and resident individuals making investments in foreign entities under the Overseas Direct Investment (ODI) framework are required to comply with various reporting obligations prescribed under FEMA. One of the most important annual compliances is the filing of the Annual Performance Report (APR).

The APR enables the Reserve Bank of India (5RBI) to monitor the financial and operational performance of foreign entities in which Indian residents have made investments. Non-filing or delayed filing of APR can result in FEMA non-compliance, late submission fees, and difficulties in undertaking future overseas investments.

📘 What is APR?

APR (Annual Performance Report) is a mandatory annual reporting requirement for Indian residents and Indian entities that have made an Overseas Direct Investment (ODI) in a:

• 
  Joint Venture (JV)
• Wholly Owned Subsidiary (WOS) 
• Foreign operating company

The report contains information regarding:

• Financial performance of the foreign entity
• Net worth
• Profit or loss
• Capital structure
• Dividend declaration
• Repatriation of funds
• Shareholding pattern

The filing is made in Form ODI Part II (APR) through the RBI's ODI reporting system via the designated Authorized Dealer (AD) Bank.

⚖️ Legal Framework

APR filing is governed under:

• Foreign Exchange Management Act, 1999
• Foreign Exchange Management (Overseas Investment) Regulations, 2022

The regulations require reporting of overseas investments throughout the life cycle of the investment.

👥 Who is Required to File APR?

APR must be filed by:

✅ Indian Companies

Companies having overseas subsidiaries or joint ventures. 

✅ LLPs

Limited Liability Partnerships holding ODI.

✅ Resident Individuals

Individuals who have invested in foreign entities under the Liberalised Remittance Scheme (LRS).

✅ Partnership Firms

Where ODI is permitted under FEMA regulations.

APR filing is required for each foreign entity separately. Even if the overseas company has no business activity during the year, APR filing generally remains mandatory as long as the investment continues.

📅 Due Date for APR Filing

📌 Annual Due Date

31 December every year

The APR must be filed for the foreign entity's accounting period ending on or before the preceding 31 March.

Example

🏢 Filing Through RBI Portal

Under the revised ODI framework, reporting is routed electronically through the RBI reporting system and submitted through the designated AD Bank. The Authorized Dealer Bank verifies and forwards the reporting to RBI.

📑 Information Required in APR

The report generally includes: 

📌 Foreign Entity Details

• Name
• Country of incorporation
• Business activity
• UIN (Unique Identification Number)

📌 Investment Details

• Equity investment
• Loan investment
• Financial commitment

📌 Financial Information

• Turnover
• Net worth
• Profit after tax
• Dividend declared

📌 Repatriation Information

• Dividend received
• Loan repayment received
• Other dues recovered

📌 Capital Structure

• Shareholding pattern
• Paid-up capital
• Ownership percentage

📄 Documents Required

✅ APR Form (ODI Part II)

Properly completed and signed.

✅ Financial Statements of Foreign Entity

Audited or otherwise permissible under regulations.

✅ Auditor Certification

Where required.

✅ Latest Shareholding Details

Foreign entity ownership information.

✅ Supporting Declaration

As requested by the AD Bank.

📊 Audit Requirement for APR

The Overseas Investment Regulations introduced stricter audit requirements.

Audit Generally Required When:

• Indian investor has control in the foreign entity
• Equity holding is 10% or more

APR should be based on audited financial statements in such cases.

Exception to Audit Requirement

APR may be filed based on unaudited financial statements where:

• Indian investor does not have control; and
• Host country law does not require audit.

Such accounts typically require certification by the statutory auditor or Chartered Accountant in India.

👥 Multiple Indian Investors in Same Foreign Entity  

Where multiple Indian residents have invested in the same foreign company: 

General Rule

The investor holding the highest stake acts as the designated filer for APR purposes.

⚠️ Consequences of Non-Filing  

❌ FEMA Violation

Non-filing is treated as non-compliance under FEMA.

❌ Future ODI Restrictions

AD Banks may refuse:

• Fresh remittances
• Additional investments
• Restructuring requests

❌ Delays in Disinvestment

Exit transactions may become difficult.

❌ Regulatory Scrutiny

Compliance issues during audits and inspections.

💰 Late Submission Fee (LSF)

For delayed filing of APR:

₹7,500 Per APR

Late Submission Fee (LSF) is generally payable for delayed reporting.

🌟 Best Practices for Timely Compliance

✅ Obtain Overseas Financial Statements Early 

Coordinate with foreign accountants in advance.

✅ Review UIN Details

Ensure ODI records match RBI records.

✅ Track December Deadline

Maintain an ODI compliance calendar.

✅ Reconcile Investment Figures

Verify capital contributions and repatriations.

✅ File Before Year-End Rush

Many professionals recommend filing well before December to avoid AD Bank processing delays.

🏁 Conclusion

The Annual Performance Report (APR) is one of the most important ongoing compliance requirements under India's Overseas Direct Investment framework. Every Indian company, LLP, or resident individual holding ODI in a foreign JV or WOS must ensure timely filing of APR through the designated AD Bank and RBI reporting system.

Since APR directly impacts future overseas investments, restructuring, and disinvestment transactions, businesses should maintain accurate records of their foreign entities, obtain financial statements on time, and complete reporting well before the 31 December deadline.

👉 Timely APR filing not only ensures FEMA compliance but also demonstrates proper governance and transparency in overseas investment activities.