The annual return on Foreign Liabilities and Assets (FLA) must be submitted by entities that have received Foreign Direct Investment (FDI) and/or made FDI abroad (overseas investment) in previous years, including the current year, requirement applies to entities holding foreign assets or liabilities in their balance sheets Mainly-
Foreign Subsidiary Company (FDI)
Foreign wholly owned subsidiaries (FDI)
Overseas company (ODI)
Company having any Foreign Assets or Liabilities in Books
Hence, All companies in India registered as subsidiary company, along with filing FC-GPR for Foreign Direct Investment (FDI) and in the case of share transfers (FC-TRS), also need to file the FLA (Foreign Liabilities and Assets) annual return.
Learn more about RBI FEMA/ FDI Reporting: EMF SMF Filing, FC-TRS and FLA Return
The entities required to submit the FLA return include:
Companies: As defined in section 1(4) of the Companies Act, 2013.
Limited Liability Partnerships (LLPs): Registered under the Limited Liability Partnership Act, 2008.
Others: Such as SEBI-registered Alternative Investment Funds (AIFs), Partnership Firms, Public-Private Partnerships (PPP), etc.
Learn more about Applicability of FLA Returns under FEMA Laws in India
Due Date
Entities meeting the above criteria must submit the FLA return under FEMA 1999 based on their audited/unaudited accounts by July 15 every year.
The due date for submitting the annual census on FLA as of March-2024 on the FLAIR portal is July 15, 2024.
Key Facts about FLA
1. FLA Return vs. Annual Performance Report (APR) for ODI:
The FLA return and APR for Overseas Direct Investment (ODI) are distinct and monitored by different RBI departments. Entities must submit both returns if applicable.
2. Shares Issued on a Non-Repatriable Basis:
Shares issued to non-residents on a non-repatriable basis are not considered foreign investments. Therefore, entities issuing only non-repatriable shares to non-residents are not required to submit the FLA return.
3. Modification of Submitted FLA Return:
Entities can modify their already submitted FLA return after obtaining RBI approval.
4. Late Submission of FLA Return:
Entities can submit the FLA return after the due date with RBI approval, though penalties for late submission may apply.
5. FLA Return Submission:
The FLA return must be submitted via the online web-based portal Foreign Liabilities and Assets Information Reporting (FLAIR) system. The portal can be accessed at FLAIR System.
Submission Process
Given that the FLA return is submitted online, entities should ensure all necessary details are accurately compiled before submission. To facilitate this process, entities can share an Excel sheet in PDF format containing all relevant details, which can then be reproduced in the online FLA form.
Steps for Submission:
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Prepare the Information: Collect all necessary data on foreign liabilities and assets from the entity’s balance sheets.
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Complete the Excel Sheet: Fill in the required details in an Excel sheet, which can be converted to a PDF for ease of reference.
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Access the FLAIR Portal: Log into the FLAIR system using the provided link.
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Fill Out the Online Form: Use the details from the prepared Excel sheet to complete the online FLA return form.
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Submit the Return: Ensure all information is accurate before submitting. If modifications are needed post-submission, seek RBI approval.
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Post-Due Date Submission: If submitted after July 15, obtain RBI approval and be prepared for possible penalties for late submission.
By adhering to these guidelines, entities can ensure compliance with FEMA regulations and avoid potential penalties for non-compliance.
Below are the draft FLA Forms which need to be submitted on the portal directly in web-based form after furnishing the details or particulars
Non-Filing of FLA Returns
Non-filing of the return on or before the due date (July 15 of every year) will be treated as a violation of FEMA and a penalty clause may be invoked for violation of FEMA. For further details on the penalty clause, please see the below: -
- Notification No. FEMA. 395/2019-RB dated October 17, 2019.
- A.P. (DIR Series) Circular No.16 dated September 30, 2022.
Key Features of Filing FLA Return and Related Procedures for 2024 (Souce: FLAIR-RBI)
- Initial Registration and Login Credentials
- Entities filing FLA returns for the first time or with a revised UIN must register to generate login credentials.
- Entities already registered can use their existing login credentials to submit FLA-2024.
- Documentation for Registration
- Prepare an authority letter (PDF/JPG copy) and a verification letter (Word file saved as PDF) for user registration.
- Detailed instructions for filling out the "FLA user registration form" and "FLA form" are provided.
- Registration for Investment Vehicles/AIFs
- Investment Vehicles/AIFs not registered in 2023 must register through the FLAIR system's "User Registration Form."
- Registered AIFs/IVs in 2023 do not need to re-register.
- AIFs/IVs must submit the FLA-2024 return in Excel format via email to surveyfla@rbi.org.in, not through the FLAIR portal.
- For queries, email surveyfla@rbi.org.in with the subject "Query related to AIFs."
- Revising Current Year FLA Return
- Approval from RBI is required for revising the current year's submitted FLA return.
- Procedure:
- Visit https://flair.rbi.org.in/fla.
- Login to FLAIR and navigate to MENU > ONLINE FLA FORM > FLA ONLINE FORM.
- Click on the link for approval to revise the FLA form for the current year.
- Select the year and click "Request."
- Wait at least one working day for approval, then check the request status in the "Multiple Year Enable Screen."
- Once approved, revise the FLA return for the current year.
- Submitting Previous Year's FLA Return
- Approval from RBI is required for submitting FLA returns for previous years.
- Procedure:
- Visit https://flair.rbi.org.in/fla.
- Login to FLAIR and navigate to MENU > Multiple Year CIN Enable Screen.
- Select the desired year and click "Request."
- Wait at least one working day for approval, then check the request status in the "Multiple Year CIN Enable Screen."
- Once approved, submit the FLA return for the requested previous year.
- Note: If the FLA return for approved years is not submitted, requests for other years will not be allowed.
- Upload Requirements for User Registration
- Authority Letter:
- Scanned as PDF/JPG, signature/seal waived due to COVID-19.
- A mobile image of the signature may be pasted on the authority letter.
- Upload the converted PDF in the user registration form.
- Verification Letter:
- Typed, not signed, saved as XXXX.pdf.
- Include only the name and designation of the signatory.
- Do not scan; upload the PDF as-is.
- Data Entry Precision
- Ensure no special characters or spaces in the CIN and PAN fields of the verification letter.
- Unit Consistency
- Fill the FLA return carefully, adhering to the indicated units.
- Mandatory Fields
- Fields marked with * are mandatory.
- Variation Report
- Confirm the variation report before the final FLA submission.
- Revisions and Submissions
- RBI allows for the revision of the current year's FLA return.
- Submission of previous years' FLA returns is permitted upon RBI's approval.
- Requests for such revisions or submissions must be made through the portal.
Download the FLA Help Kit
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