Foreign-owned companies operating in India are required to comply with certain reporting obligations to the Reserve Bank of India (RBI). One of the key compliance requirements is filing the FLA Return (Foreign Liabilities and Assets Return). This annual return provides information on foreign investments received, foreign assets held, and other related financial details. Filing the FLA return ensures transparency of cross-border transactions and compliance with RBI’s Foreign Exchange Management Act (FEMA) regulations.
In this article, we will cover everything foreign-owned companies need to know about filing the FLA return with RBI.
The FLA return is a mandatory annual filing that needs to be submitted by all companies in India that have received Foreign Direct Investment (FDI) and/or have made Overseas Direct Investment (ODI). It captures the financial details of a company’s foreign assets, liabilities, and investment patterns.
Key points:
It is filed with RBI every year.
Due date is 15th July of the following financial year.
It must be filed even if there is no outstanding FDI or ODI at the end of the year, provided the company has received FDI or ODI in the past.
Foreign-owned companies and Indian companies with foreign investment or overseas investment must file the return. Specifically:
Indian companies that have received FDI (including foreign-owned subsidiaries and joint ventures).
Indian companies that have invested abroad through ODI.
Companies where either inflow (foreign investment received) or outflow (investment made abroad) exists during the financial year.
Before applying for FLA return submission, companies must collect the following information:
Company identification details (CIN, PAN, contact details).
Foreign investment details (equity, preference shares, debentures, etc.).
Financial details (balance sheet, profit & loss account).
Foreign assets and liabilities information (loans, trade credits, reserves).
Shareholding pattern (percentage of foreign investors).
Check if your company has received any FDI or made ODI in the previous or current financial year. If yes, FLA return filing is mandatory.
The RBI provides the FLA return form in an Excel-based format. The form is to be filled with all required details related to foreign assets and liabilities.
Enter company details, financial information, investment details, and ownership structure in the prescribed format. Ensure accuracy, as discrepancies may lead to rejection.
The form comes with a built-in validation feature to ensure correctness. Companies must carefully validate before submission.
Once validated, the form needs to be sent to the RBI via the official email submission system. The RBI will acknowledge receipt after verification.
Failure to file the FLA return within the due date can lead to penalties under FEMA regulations. Penalties may include monetary fines and restrictions on future foreign transactions. Hence, timely compliance is crucial.
Keep financial records updated and reconciled.
Maintain a proper record of all foreign investments.
Review RBI’s instructions each year before filing.
File the return well before the deadline to avoid last-minute issues.
Filing the FLA return with RBI is a critical compliance requirement for all foreign-owned companies and Indian companies with foreign investment. It helps RBI track foreign liabilities and assets at the national level. By following the correct process, keeping accurate records, and filing on time, companies can stay compliant and avoid penalties.