FLA Return Filing – Everything You Need to Know for 2025

As globalization continues to rise, many Indian businesses are engaging in cross-border investments—either receiving funds from foreign investors or investing in companies overseas. To regulate and monitor such international transactions, the Reserve Bank of India (RBI), under the Foreign Exchange Management Act (FEMA), mandates the submission of the Foreign Liabilities and Assets (FLA) Annual Return.

If your company has received Foreign Direct Investment (FDI) or has made Overseas Direct Investment (ODI), this blog will help you understand everything about the FLA return filing process, requirements, deadlines, and consequences of non-compliance.

What is the FLA Return?

The FLA Return is an annual filing that Indian companies and certain other entities must submit to the RBI if they:

• Have received FDI, or
• Have made ODI, such as investments in foreign joint ventures or wholly-owned subsidiaries.

The purpose of the return is to capture details of all foreign assets and liabilities as of the end of the latest financial year (i.e., March 31).

Who Needs to File the FLA Return?

The FLA return must be filed by:

• Companies as per Section 1(4) of the Companies Act, 2013.
• Limited Liability Partnerships (LLPs) registered under the LLP Act, 2008.
• Others, including SEBI-registered Alternative Investment Funds (AIFs), Partnership Firms, and Public Private Partnerships (PPPs).

Even if an entity has not received new FDI/ODI during the year, it must file the FLA return if there is any outstanding foreign investment as of March 31.

Entities Exempted from Filing the FLA Return

Entities are exempt from filing the FLA return if:

• They have issued shares only on a non-repatriable basis to non-residents.
• They do not have any outstanding FDI/ODI as on March 31.
• They have received only share application money with no allotment or actual investment.

Due Date for Filing

• The FLA return must be submitted by July 15 every year, based on audited or unaudited financials.
• If only unaudited data is used, a revised return with audited figures must be filed by September 30.

Filing Process for FLA Return

As of June 2019, the Excel-based/email filing method has been replaced by the web-based FLAIR portal:

🔗 FLAIR Portal Login

Steps to File:

1. Register on the portal as a new entity user.
2. Submit a Verification Letter and Authority Letter.
3. Receive login credentials via email.
4. Fill out and submit the return on the portal.

Note: AIFs still use Excel-based filing after requesting the format via email.

Common Scenarios and FAQs

Q1. What if our accounts are not audited by July 15?

Submit the return using unaudited figures and revise later with audited data by September 30.

Q2. Can we report as per our internal accounting year if it’s different from March 31?

No. FLA Return must reflect data as of March 31 only.

Q3. We missed the due date. Can we still file?

Yes, but only after approval from RBI, and penalties may apply.

Q4. Do we need to file if we didn’t receive new FDI/ODI this year but have outstanding amounts from previous years?

Yes. The return must reflect outstanding positions as of March 31.

Q5. Do registered partnerships or trustees need to file?

Yes, if they have any outward ODI outstanding as of March 31.

Q6. Is Annual Performance Report (APR) the same as FLA Return?

No. These are separate returns monitored by different RBI departments and both must be filed if applicable.

Penalties for Non-Compliance

Failure to submit the FLA return by July 15 can lead to:

• A penalty of up to 3 times the amount involved in the contravention.
• A flat fine of ₹2,00,000, if the amount is unquantifiable.
• An additional fine of ₹5,000 per day for continuing violation.

Important Definitions

• Direct Investment: Investment in equity capital and other capital by a resident in a foreign entity or vice versa.
• Equity Capital: All shares (except non-participating preference shares) and contributions like machinery or land.
• Other Capital: Includes loans, trade credits, share application money, and debt securities between investor and investee.
• Foreign Subsidiary: >50% ownership by a non-resident.
• Foreign Associate: 10%-50% ownership by a non-resident.
• SPV (Special Purpose Vehicle): Entity created for a specific function, with limited or no physical operations.

Valuation Guidelines

• Unlisted Companies: Use Own Funds at Book Value (OFBV) method:

Market value = (Net Worth) × (% of Non-Resident Holding)

Net Worth = Paid-up Capital + Reserves – Losses

• Listed Companies: Use closing share price as of March 31.

Useful Contacts

• FLA Queries: Email at fla@rbi.org.in
• FLA Format for AIFs: Request by email after portal registration.
• Revision Requests: Use FLAIR portal → Online FLA Form → Request revision.

Conclusion

Timely and accurate submission of the FLA return is not just a compliance requirement but also a critical component of maintaining a transparent financial record of foreign investments. Entities must ensure they file the return by July 15, even with provisional data, and follow up with audited numbers by September 30 if necessary.

For more details and updates, always refer to the RBI FLA Page and the FLAIR Portal.