Annual Return on Foreign Liabilities and Assets (FLA) under FEMA

(FLA return) under FEMA 1999

(Portal for submitting FLA : https://flair.rbi.org.in)

> Purpose

The annual return on Foreign Liabilities and Assets (FLA) is required to be submitted directly by all the Indian companies which have received FDI (foreign direct investment) and/or made FDI abroad (i.e. overseas investment) in the previous year(s) including the current year i.e. who holds foreign Assets or Liabilities in their Balance Sheets.

  Entities eligible to submit FLA return:

• A Company within the meaning of section 1(4) of the Companies Act, 2013.
• A Limited Liability Partnership (LLP) registered under the Limited Liability Partnership Act, 2008
• Others [include SEBI registered Alternative Investment Funds (AIFs), Partnership Firms, Public Private Partnerships (PPP) etc.]

> What are the types of the Foreign Assets and Foreign Liabilities?

• Investment by Indian Company outside India (ODI)
• Foreign Investment in Indian Company (FDI)
• Lending to foreign entity or person or Director (Investments)
• Borrowings from Foreign entity or persons or Directors (Loans)
• Trade Credit (Foreign Trade Payables & Receivables)

> Due Dates for Filing FLA Return

• 15^th July of every year.
• 30^th September – For filing revised FLA return (only if there are significant revisions from the provisional information)

> User Registration for Filing

A. Entities needs to fill-in new User Registration Form on RBI Flair Portal for registration if:

• The company is filing the FLA Returns for the first time.
• The details of authorized person had changed during the financial year.
• The Entity name/address has changed during the financial year.
• Corporate Identification Number (CIN) / LLP Identification Number (LLPIN) / Others (UIN) /Partnership Firm changed during the financial year.

B. While registration, Verification Letter & Authorization Letter shall also be uploaded. (Format of letters are available on website)

C. Every time for login into RBI Flair portal after registration, OTP will be sent on authorized person email address which will be valid only for 15 mins.

> Documents/Information required for FLA filing.

• Audited/Unaudited Financial Statements.
• Break-up of sale & purchase from Import & Export.
• Number of Employees in reporting Indian Company.
• Cap table with address of Shareholder.
• Details of outstanding liabilities & claims with foreign unrelated parties.

Other Important points:

i. In Part I, classes/types relate to number of different face values the company may have. (Illustration: if a company has shares of face values say, INR 10 and INR 20, then “2” should be entered and not the face value of share).

ii. During the year if there is change in Investor due to transfer of shares then in section III, in 1.b / 2.b, non-resident investor details / non-resident investor countries’ details will be displayed as pre-filled of previous Investor and by clicking on Delete button companies will be able to modify the non-resident investor details by mentioning reasons for the same, companies will be able to add new investor.

iii. In Section III, sum total percentage of investment received from overseas investors can be verified from Section II point 2.3

(Illustration: if a company receives FDI from three countries e.g. Netherlands 12%, USA 15%, UAE 17% then sum total of percentage i.e. 44% can be verified from section II point 2.3)

> Additional points for AIF (Alternative Investment Fund) FLA Return filing

• First AIF needs to register on the FLAIR portal & to send a mail to survayfla@rbi.org.in requesting for the form for filing of FLA Return.
• On receiving the request FLA Team will send the excel form for filling FLA Return by AIF on mail & submit the filled-in form on above mentioned email.
• Email based acknowledgement form will be sent to by FLA Team on receiving the filled-in FLA form.

> FLA return filing for previous year

• For submission of FLA returns for previous years, the reporting entity need to take approval from RBI by requesting through Flair portal itself & entities need to wait for at least one working day for approval. After approval entity can submit FLA return for the requested previous year.