Foreign Liability and Assets Annual Return (FLA Annual Return)

What is FLA annual return?

FLA annual return is a compliance that that have to be met by the companies that are involved with Foreign Direct Investment or Overseas Direct Investment.

FLA return covers all the foreign investments made by company and/or to the company and it must be directly submitted by the company to the Reserve Bank of India.

Who needs to file FLA return?

Every company which has made Overseas Direct Investment or received Foreign Direct Investment. The companies have to report the current financial year’s FLA as well as the previous year’s assets and liabilities. In case a company doesn’t have any foreign assets or liabilities in the current year but has outstanding ODI or FDI from the previous year(s), it must file the FLA annual return indicating their outstanding assets or liabilities.

As per the FEMA regulations if a partnership firm has made ODI or received FDI must file FLA annual return. In this case RBI will issue a dummy CIN upon its request which will be used only for the FLA annual return.

Filing of FLA annual return

Reserve Bank of India in the year 2019, introduced a new web-based interface, FOREIGN LIABILITIES AND ASSETS INFORMATION REPORTING (FLAIR) SYSTEM, for the purpose of accepting returns via web i.e. https://flair.rbi.org.in/fla/ . The first time users need to register themselves on the FLAIR prior to filing FLA return.

Corporate entities are permitted to get any clarification for submission of FLA returns on landline no. of RBI: (022) 26578662 / 26578217 / 26578348 / 26578214 / 26578340 / 26578241 and thorough email ID as [email protected]

Non-applicability

Following companies are exempted from filing FLA return

• Companies which that have only received share application money and have not received any FDI or made any ODI
• Companies which does not have any outstanding balance of ODI and/or FDI by the end of the financial year.
• Share issued by the reporting Company to non-residents on non-repatriable basis.

Non-compliance

In case of non-compliance the concerned entity shall be liable for penalty and penalty clause may be invoked for such violation.