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FAQs on Foreign Liabilities and Assets (FLA) Annual Return Under FEMA 1999


When an entity engages in foreign investment, it must comply with the regulations and requirements of the Foreign Exchange Management Act. The Foreign Liabilities and Assets (FLA) return is one of the compliance obligations that entities that have made Overseas Direct Investments (ODI) or received Foreign Direct Investments (FDI) must fulfill.

Here are the most frequently asked questions on Foreign Liabilities and Asset return, which can help you gain a clear understanding and stay ahead of your compliance.

Q1. What is Foreign Liabilities and Assets Return (FLA)?

The Foreign Liabilities and Assets Return (FLA) is a filing mandated by the Reserve Bank of India (RBI) for Indian Companies, Limited Liability Partnerships (LLPs), and other entities that have received Foreign Direct Investment (FDI) or made Overseas Direct Investments (ODI) in any form.

The FLA return is an annual reporting mechanism used to collect data on the foreign assets and liabilities of Indian entities. It includes information such as:

  • Assets: Any investment, financial or non-financial, held abroad by the reporting entity.
  • Liabilities: Any financial obligations owed to non-residents.


Q2. What is Foreign Direct Investment (FDI) and Overseas Direct Investments (ODI)?

  • Foreign Direct Investment (FDI) refers to an investment made by a foreign entity(individual or company) in the equity capital of an Indian entity.
    1. Example: When a multinational corporation (MNC) acquires shares in an Indian entity or establishes a subsidiary in India, it constitutes FDI.
    2. Benefits: FDI brings in capital, technology, expertise, and employment opportunities.
  • Overseas Direct Investments (ODI) involves an Indian entity expanding its operations abroadby investing in foreign countries.
    1. For Example: When an Indian entity sets up subsidiaries or joint ventures in other countries, it represents ODI.
    2. ODI allows entities to tap into international markets, gain exposure, and achieve strategic objectives.


Q3. What documents are required for an FLA return?

The documents required for filing the Foreign Liabilities and Assets Return (FLA) typically include:

  1. FLA Form: The Reserve Bank of India (RBI) provides the FLA form on its website. It must be filled out accurately and completely.
  2. Financial Statements: Entities need to provide financial statements, including balance sheets, profit and loss statements, and cash flow statements for the relevant financial year, which may / may not be audited.
  3. Details of Foreign Assets & LIabilities: Detailed information about the entity’s foreign assets and liabilities, including any overseas investments, financial assets held abroad, loans from foreign entities, etc.
  4. Bank Statements: Copies of bank statements related to foreign transactions and accounts.
  5. Foreign Direct Investment (FDI) Details: If applicable, details of any foreign direct investment received by the entity during the reporting period.
  6. Any Other Relevant Documents: Depending on the entity’s specific circumstances and foreign transactions, additional documents may be required to support the information provided in the FLA return.


Q4. Who is required to submit the FLA return?

Ans: Entities that have received FDI (Foreign Direct Investment) and/or made Overseas Direct Investment (ODI) in the previous year(s), including the current year, i.e., who hold foreign assets and/or liabilities in their balance sheets;

  • Company
  • Limited Liability Partnership (LLP)
  • Others
    1. SEBI-registered Alternative Investment Funds (AIFs),
    2. Partnership firms,
    3. Public-private partnerships (PPP),
    4. Branches,
    5. Trustees


Q5. What is the due date for filing an FLA Return?

Particulars Due date before the extension
Audited & unaudited accounts 15th July every year.
Revised FLA return after getting accounts audited 30th September every year.


Q6. Can the FLA form be submitted after the due date?

Ans: Yes, entities can file the FLA return even after the due date, although prior approval from RBI is required to be obtained in case of late submission.

However, the penalty may be imposed on the entity for late submission.


Q7. What is the late submission fee for an FLA return?

Ans: The Late Submission Fee is INR 7,500/-.


Q8. Consequences in case of failure to file FLA Return by July 15.

Ans: Penalty clause may be invoked for violation of FEMA upon Non-filing of the return on or before the due date, i.e., July 15 of every year.


Q9. What are the penalties for non-filing the FLA return?  

Non-submission of FLA return on or before the due date shall be treated as a violation of FEMA, which may attract penalties on defaulters.

Particulars Penalty
Amount against which offence is quantifiable 3 times the sum involved in the contravention
Amount against which offense is not quantifiable Up to 2 lakh
In case of continuing default INR 5,000 for every day after the first day, during the defaulting period.


Q10. Can the FLA form for previous years be filed?

Ans: Yes


Q11. Can the previously submitted FLA form be modified?

Ans: Yes, previously submitted FLA forms can be modified after getting approval from RBI.


Q12. Is it mandatory to file a revised FLA return?

Ans: Yes, it is mandatory to file revised FLA returns if there are any changes or corrections needed in the previously submitted FLA return. Here are some critical points regarding revised FLA returns:

  • Revised FLA returns are typically filed to rectify errors, update information, or include any missing details from the original submission.
  • If you discover inaccuracies or omissions in your initial FLA return, it’s essential to file a revised return to ensure accurate reporting.
  • In case the FLA return has been filed on the basis of unaudited financial statements.


Q13. Whether prior approval of RBI is required to file a revised FLA return?

Ans: Yes, if an entity wishes to delete or modify the previous version of the FLA return, it must seek approval from the RBI. Additionally, if an entity wants to file the FLA return beyond the due date or submit the return for any previous yearsRBI approval is required.


Q14. Is there any company that is exempted from filing an FLA return?
The following entities are exempted from filing FLA returns:

  • Entities that have only issued shares on a non-repatriable basis to the NRI’s.
  • Entities that do not have any outstanding balance of FDI or ODI at the end of the FY.
  • Entities that have received share application money but are yet to receive any FDI or are yet to make any ODI during the financial year.


Q15. What is the process for filing an FLA return?

For filing an FLA return, following is the process:

Effective June 2019, the erstwhile Excel-based format and email-based reporting system have been replaced by the web-based format for submission of annual FLA returns. FLA returns can now be submitted through the online web-based portal FLAIR (Foreign Liabilities and Assets Information Reporting).

Brief Process:

  • Entities need to register on the portal.
  • Entities can fill out the details in the FLA user registration form, upload the required documents, and submit them to complete the registration.
  • User ID and default password will be sent to the authorized person’s email ID after successful registration.
  • Use this user ID and password to log into the FLAIR portal and file the FLA Return.
  • Upon submission, a system-generated acknowledgment of the FLA return shall be generated.


Q16. Can an entity file an FLA return if the balance sheet of that entity is not audited before the due date?

Ans: Entities must fill out the FLA return within the due date (i.e., July 15 every year), even if they do not have their balance sheet audited. They may fill in the provisional/unaudited numbers. Once the audited numbers are ready, a request is required to be raised with RBI for revision of the filed return. Upon approval by RBI, entities can revise the same with audited numbers and re-submit.


Q17. How can an entity file its return in case the account closing period of the entity is different from March?

Ans: The information to be filled in FLA should be as of the end of March only. In case the accounting period is different from March, the entity can file its return based on its internal assessment, that is, as of 31st March.


Q18. Does an entity need to submit the FLA return if it has only received shared application money?

Ans: In case the entity does not have any outstanding FDI /ODI as of 31st March and has received only share application money, it is not required to fill the FLA return.


Q19. Is an entity required to submit the FLA return in case non-resident shareholders have transferred their shares to the residents during the reporting period?

Ans: Where all the non-resident shareholders have transferred their shares to the residents during the reporting period, and the entity does not have any outstanding investment containing FDI and ODI as of March 31 of the latest Financial Year, such entities need not submit the FLA return.


Q20. If an entity issues the shares to a non-resident on a non-repatriable basis, is that entity required to submit an FLA return?

Ans: In the case where the entity has issued shares to a non-resident on a non-repatriable basis, it shall not be considered a foreign investment. Hence, such entities are not required to submit the FLA return.


At Mercurius, we assist our clients in filing FLA returns as per RBI regulations, setting up business in India, and ensuring they comply with all statutory requirements, such as accounting, bookkeeping, tax filings and assessments, payroll, auditing, trademark registration, business structuring, etc., in a timely manner. If you have questions or wish to know more about FLA returns, Contact us.


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