RBI Annual Performance Report (APR): Who Must File, Audit Rules & Deadline

Summary: An Annual Performance Report (APR) is a recurring FEMA reporting requirement for a person resident in India that has made Overseas Direct Investment (ODI) in a foreign entity, subject to specified exceptions. Under the current Overseas Investment Regulations, 2022, APR is generally submitted for each foreign entity through the designated AD Bank by 31 December every year; where the foreign entity’s accounting year ends on 31 December, the APR is due by 31 December of the following year. The APR contains information concerning the foreign entity’s financial performance, shareholding and specified overseas-investment events. Whether audited financial statements are mandatory requires attention to the Indian investor’s control and the audit requirements of the host jurisdiction; the current framework permits APR based on unaudited financial statements in specified circumstances. Delayed APR reporting ordinarily attracts a fixed Late Submission Fee of ₹7,500 per return, subject to the applicable FEMA framework. Businesses receiving an APR request should therefore first identify their foreign entities/UINs, applicable accounting periods, audit status and outstanding APRs, and then coordinate the supporting financial information with their designated AD Bank.

Your Bank Asked for an APR: What Does It Mean?

Your bank calls you out of nowhere. Or maybe it’s an email buried between spam and invoices. “Please submit your APR for FY 2025-26, or your account activity may be restricted.” You read it twice. You Google “APR.” The first ten results talk about loan interest rates. None of it matches what your bank is asking for.

If this is you right now, this isn’t about loan interest rates. It’s a routine — if often poorly explained — FEMA compliance requirement that catches many Indian business owners off guard the first time it shows up. Here’s what’s actually going on, and what to do about it.

First, What Your Bank Actually Means by “APR”

Your bank isn’t asking about interest rates. APR here stands for Annual Performance Report — a report required under India’s overseas investment framework from a person resident in India that has made Overseas Direct Investment (ODI) in a foreign entity, subject to specified exceptions.

If your company owns a subsidiary in the US, UK, Singapore, or anywhere else abroad, APR reporting may therefore apply even where the foreign business has not yet made a profit. Under the Foreign Exchange Management (Overseas Investment) Regulations, 2022, overseas-investment reporting is routed through the designated Authorised Dealer (AD) Bank.

Why This Exists in the First Place

India tracks money leaving the country. When your company sent funds abroad to set up or invest in that foreign entity, the overseas investment was subject to the applicable FEMA reporting framework. The APR provides continuing information about the foreign entity after the ODI has been made.

Think of it less like paperwork for paperwork’s sake, and more like a yearly regulatory check-in on an overseas investment. The APR captures information including the foreign entity’s financial position, changes in shareholding, repatriation and specified events involving step-down subsidiaries.

Here’s the Part That Actually Trips People Up: It’s Not Just a Form

Most people assume they can grab a form, fill in some numbers, and send it back to the bank. That’s not always how this works, because the APR has to be supported by the financial information required under the overseas investment framework.

The audit position, however, needs to be determined from the applicable rules rather than assuming that every foreign entity must invariably undergo a local statutory audit.

Under the current framework, the APR is generally based on audited financial statements. However, unaudited financial statements may be used in specified circumstances, including where the person resident in India does not have control over the foreign entity and the host country’s law does not provide for mandatory audit.

Therefore, before engaging an overseas auditor solely for APR purposes, the first step should be to determine whether an audit is actually required for that foreign entity under the applicable FEMA provisions and the law of the host jurisdiction.

Who Actually Needs to Do This

APR reporting generally applies where a person resident in India has made ODI in a foreign entity. Typical situations include:

• You own a wholly-owned subsidiary abroad
• You hold an overseas joint venture
• Your Indian company has ODI in a foreign business

Where more than one person resident in India has made ODI in the same foreign entity, the person holding the highest stake is ordinarily responsible for submitting the APR; where holdings are equal, the APR may be filed jointly.

The obligation is not determined merely by whether the foreign entity earned a profit. However, the current Regulations contain specific exceptions to APR reporting, so the position should be checked against the nature of the investment rather than assuming that every overseas equity holding automatically requires an APR.

What the Actual Process Looks Like

Here’s the practical version:

Step one — Identify the foreign entity and reporting obligation

Confirm the overseas entity, UIN, designated AD Bank, accounting year, Indian investor’s stake and whether the investment constitutes ODI.

Step two — Determine whether audited financial statements are required

Check whether the Indian investor has control over the foreign entity and whether the host country’s law requires its accounts to be audited. The audit requirement should be determined before assuming that a foreign auditor must be engaged.

Step three — Reconcile the overseas investment information

The relevant financial information should be reconciled with the overseas investment records, including shareholding and applicable financial commitments. APR reporting can also capture changes in shareholding and specified events concerning step-down subsidiaries.

Step four — Submit the APR through the designated AD Bank

Overseas investment reporting is made through the designated AD Bank in accordance with the Foreign Exchange Management (Overseas Investment) Directions, 2022.

When Is the APR Due?

Under the current overseas investment framework, APR is generally required by 31 December every year in respect of each foreign entity.

Where the accounting year of the foreign entity ends on 31 December, the APR is submitted by 31 December of the following year.

This distinction is important for foreign subsidiaries following a January–December accounting year.

How Long Does the Whole Thing Take?

The time required depends substantially on whether audited accounts are already available and whether the foreign entity’s books and overseas investment records are reconciled.

Where a statutory audit is required and has not started, that process can become the main timing constraint. Where audited accounts already exist, or the foreign entity qualifies for APR reporting based on unaudited accounts, preparation can be considerably simpler.

For that reason, businesses should not wait until December to determine their audit position and gather the information requested by the AD Bank.

What Happens If You Just… Don’t?

Ignoring the reporting requirement does not make it disappear.

For delayed Form APR reporting, the RBI framework prescribes a Late Submission Fee (LSF) of ₹7,500 for the relevant periodic reporting default. The LSF is applied per return, and the facility for delayed reporting is subject to the prescribed time limits.

The consequences are not limited to the fixed fee. Under the overseas investment framework, pending reporting defaults can also affect the ability to make further financial commitments or undertake transfers relating to the foreign entity until the reporting default is regularised. FEMA contraventions that are not regularised through the applicable reporting/LSF mechanism can also attract proceedings under FEMA.

Where This Leaves You

If your bank has flagged APR compliance, start by identifying exactly which foreign entity, UIN and reporting year the request relates to.

Then establish whether audited accounts are required, whether they are already available and whether earlier APRs are outstanding. The APR audit requirements and exceptions should be checked before commissioning an overseas audit solely for the filing.

Once that position is clear, the financial information can be reconciled and the APR prepared for submission through the designated AD Bank.

Frequently Asked Questions

My subsidiary made no money this year. Do I still need an APR?

The fact that a foreign subsidiary had no revenue or profit does not, by itself, remove the APR obligation. The relevant question is whether APR reporting applies to the ODI under the current Overseas Investment Regulations and whether a specific exception is available.

Does every foreign subsidiary necessarily need a local audit just for APR?

No. The audit requirement is more nuanced. The current framework permits APR based on unaudited financial statements in specified circumstances, including where the Indian investor does not have control and the host country’s law does not mandate audit.

Accordingly, the audit position should be checked for the particular foreign entity rather than assuming that a local statutory audit is mandatory in every case.

What if my subsidiary’s financial year doesn’t match India’s April-March calendar?

APR reporting follows the accounting year of the foreign entity. The general deadline is 31 December each year, while where the foreign entity’s accounting year itself ends on 31 December, the APR is due by 31 December of the following year.

I have subsidiaries in two different countries. Do I file separately for each?

APR is required with respect to each foreign entity for which the reporting obligation applies. Accordingly, an Indian investor with ODI in multiple foreign entities should examine the APR requirement separately for each entity.

What happens after I submit it — is that the end of it?

For that reporting year, subject to acceptance and any queries from the AD Bank, the APR requirement is dealt with. But APR is an annual reporting obligation. As long as the relevant ODI and reporting obligation continue, the APR needs to be considered each year by the applicable deadline.