The FLA Return is an annual submission required by Indian organizations that have either received foreign direct investment (FDI) or have undertaken FDI overseas to the Reserve Bank of India (RBI). This report is designed to gather details on the foreign liabilities and assets that these entities report on their balance sheets. It falls under the Foreign Exchange Management Act, 1999 (FEMA) regulatory framework, ensuring comprehensive oversight of India’s foreign exchange and cross-border financial transactions
As more companies involve themselves with foreign investments, the importance of the Foreign Exchange Management Act (FEMA) regulations and their compliance becomes a major part of the companies’ operations. FLA annual return are one of the compliances that have to be met by the companies that are involved with FDI (Foreign Direct Investments) or companies who invest in foreign companies either via joint venture or wholly owned subsidiaries, also termed as Overseas Direct Investment (ODI). FLA annual return should cover all the foreign investments made by the company and/or to the company and it must be directly submitted by the company to the Reserve Bank of India.
Financial Liabilities and Assets
The FLA is an annual return set out under FEMA rules and applies to all companies firms that have received FDI during the year or have done ODI during the year and these funds have not yet reached the end of the year. This means that the FDI/ODI should always be on the organization’s books and should not be reduced to a square one during the year.
The deadline is 15 July (Extended to 31 July 2020 this year). If the corporate books are not yet audited, provisional statistics should be uploaded by the deadline. In the event of a change after the inclusion of interim figures the company will file an FLA return based on audited accounts at the end of September.
Returns should be sent to the specified RBI email by CS/CFO/Company Directors from the registered email id.
Who needs to file FLA Annual Return?
The regulation under FEMA, 1999 requires any company who has either made ODI or received FDI, to file the FLA annual return. The companies have to report the current financial year’s FLA as well as the previous year(s) assets and liabilities. In the case where a company does not have any foreign assets or liabilities for the current year but has outstanding FDI or ODI from the previous year(s), it must file the FLA annual return indicating their outstanding assets or liabilities.
The FEMA regulations also require partnership firms to file FLA annual return if they have received FDI or made ODI. In the case of partnership firms, the RBI will issue a dummy CIN upon its request which will be used only for the filing of FLA annual return. In case a dummy CIN has already been issued, the partnership firm will use the same for the filing of the FLA return.
Filing of FLA return
The prescribed method of filing of FLA annual return is via an excel sheet. It is required to be filed by all the companies falling under the criteria already mentioned. The filing of the FLA annual return has to be done before the 15 of July of the respective year and must include data of FDI or ODI received or made by the company respectively for any previous year(s) and the current year.
The form is to be mailed by any authorised member of the company from their email ID to the official email ID of the RBI i.e. [email protected]. The members of the company authorised to file the FLA return are Company Secretary, Chief Financial Officer, and Directors. The details filed must comprise of the financial details as well as other required details in accordance with the companies audited accounts.
In case the company does not have their accounts audited before 15 July, the company is to file the FLA return according to the unaudited accounts and have their accounts audited thereafter. After the audit, if there are any changes regarding the details filed, the company has to file another form with the updated details before the last day of September of the same year. After the filing of the FLA return, an acknowledgement mail will be sent by the RBI to the email ID of the authorised person. The format for the filing of the FLA return can be found on https://www.rbi.org.in/Scripts/BS_ViewFemaForms.aspx. Queries may be addressed by sending an e-mail to, [email protected].
Due Date for Filing FLA Return
The FLA Return must be filed by the 15th of July each year. In cases where the accounts have not been audited by this deadline, entities should file the FLA Return using unaudited or provisional account figures. Should the accounts be audited subsequently, a revised FLA Return must be filed, with the deadline for this revised submission being the 30th of September of the same year.
FAQs
Who is required to file the FLA return?
Companies or LLPs that have received FDI or have foreign liabilities or assets are required to file the FLA return annually. This applies to entities whose outstanding foreign liabilities or assets exceed a certain threshold specified by the RBI.
What documents are required to file the FLA return?
To file the FLA return, companies need to provide detailed financial information, including data on foreign liabilities, assets, equity, loans, and advances. The company’s balance sheet, profit and loss statement, and other financial documents are typically required.
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