FLA Return Filing

TThe FLA Return is a mandatory annual filing for Indian companies, LLPs, and other entities engaged in receiving or making foreign direct investments. This includes entities involved in Foreign Direct Investment (FDI) within India or Overseas Direct Investment (ODI). Unde r the regulations of the Reserve Bank of India (RBI) and the Foreign Exchange Management Act, 1999 (FEMA), the FLA Return is designed to gather information on foreign liabilities and assets that are reflected in the financial statements of these entities.

What is FLA Return?

The Foreign Liabilities and Assets (FLA) Return is an annual compliance prescribed by RBI under FEMA, 1999. It is required for all Indian entities that have:

• Received Foreign Direct Investment (FDI)
• Made Overseas Direct Investment (ODI) in the previous or current financial year

FLA filing helps RBI track India’s external financial assets and liabilities and is crucial for compiling the country's Balance of Payments (BoP) statistics.

Who Must File the FLA Return?

The following Indian resident entities are required to file FLA:

• Companies that have received FDI and/or made ODI
• LLPs with foreign investments
• Startups, Joint Ventures (JVs), and Wholly Owned Subsidiaries (WOS) abroad
• Alternative Investment Funds (AIFs) with foreign contributions
• Private Limited Companies with foreign shareholders

Note: Entities with only external commercial borrowings (ECBs) and no foreign equity participation are not required to file FLA.

FLA Return Filing Timeline – AY 2025-26

Event	Due Date
FLA Return (annual)	15th July 2025 (for FY ending 31st March 2025)
Revised Return (if filed with unaudited figures)	Within 1 month of finalization of audited accounts

Filing is mandatory even if there is no change in foreign investment during the year.

Information Required for Filing FLA Return

• Company Identification Details (PAN, CIN, LLPIN, Contact Info)
• Entity Identification Number (EIN) from RBI
• FDI Details: Equity capital, reinvested earnings, other capital received from non-residents
• ODI Details: Investments made in overseas JVs/WOS
• Financials as on 31st March 2025: Total assets/liabilities, profit/loss, reserves
• Shareholding Pattern (foreign vs resident)
• Disaggregated Debt/Loan Data: ECB, trade credit, inter-company loans
• Previous year’s FLA Reference Number (for tracking continuity)

Consequences of Non-Filing

Non compliance with FLA filing under FEMA invites severe penalties

Default	Penalty (as per FEMA)
Non-filing of FLA Return	₹10,000 + up to 3x the amount involved in contravention
Repetitive Default	Additional penalties and possible compounding under RBI review
Legal Risk	Risk of regulatory audit, show-cause notices, and blacklisting

Note: RBI may freeze future FDI approvals or ODI permissions for repeat non-filers.

How to File FLA Return (via FLAIR Portal)

Step by Step Process:

1. Register Entity on FLAIR Portal – https://flair.rbi.org.in
2. Get Login Credentials from RBI
3. Login and Update Entity Master Details
4. Enter FDI/ODI Data in FLA Form
5. Validate and Submit before 15th July 2025
6. Save Acknowledgment for future reference

The return can only be filed using the FLA Utility provided by RBI—no physical submission is accepted.

Why FLA Filing is Essential

• Maintains regulatory credibility with RBI
• Avoids FEMA violations and future compliance blocks
• Ensures smooth approval of future FDI/ODI or ECB
• Required during company due diligence, audits, funding rounds, and IPOs
• Supports transparent disclosure of India's foreign asset positions

Penalties for Non-Filing of FLA

Under Section 13 of FEMA, 1999 , non filing or delay in FLA return may result in:

• Monetary penalty up to ₹2 lakh under Section 13 of FEMA, 1999
• Further penalty of ₹5,000 per day for continuing default
• Ineligibility to receive future foreign investments until FLA is filed

How CACSFinacc Supports FLA Return Filing

• Initial Eligibility Assessment:
  • We identify your FDI/ODI position and whether FLA applies
• EIN Generation & Portal Access:
  • Help in obtaining Entity Identification Number (if first-time filer)
• Data Compilation:
  • We extract and validate data from your audited/un-audited balance sheet and foreign transaction reports
• Return Preparation & Filing:
  • Draft the FLA in RBI format and file online through FLAIR portal
• Revised Filing (if required):
  • File revised return after audit finalization to ensure RBI record accuracy

Why Choose CACSFinacc for FLA Return Compliance?

• Accurate RBI Compliant Return Preparation
• Assistance in FLAIR Portal Registration
• Timely Filing with No Penalty Risk
• Validation of Financial Data with FEMA Regulations
• Support for FDI, ODI, ECB and FEMA Compliance
• Affordable Pricing Plans for Startups & SMEs