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FAQ’s on Foreign Liabilities and Assets (FLA) annual return

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The Annual Return on Foreign Liabilities and Assets (FLA) has to be filed by the Indian resident companies whosoever has received Foreign Direct Investment (FDI) and/ or made Overseas Direct Investment (ODI) in previous year(s), including the current year under FEMA 1999. The FLA return has to be filed by July 15 of every Year.

Even if the Company has not received any fresh FDI and/or ODI in the latest year but the company has outstanding FDI and/or ODI, the company is still required to submit the FLA Return.

The Company is required to file FLA return even if company’s accounts are unaudited before the due date of submission; it should be submitted based on unaudited (provisional) account. Thus, the revised FLA return is supposed to be submitted by September –end.

The FLA Return for FY 2016-17 is due by 15th July, 2017. Non Compliance may lead to FEMA violation resulting in show-cause notices and penalties as per FEMA, 1999.

Download FLA return format

FAQ on FLA Annual return

 

Applicability of FLA returns to companies

Q1. Which companies are required to submit the FLA Return?

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.

Q2.Whether Limited Liability partnership is required to file FLA Return?

Yes, as per Circular No. 22, dated October, 21, 2015 it mandatory for Limited Liability Partnership (LLP) to file FLA return, in order to capture statistics of inward or outward FDI by LLP.

Eligible Companies for FLA return

Q3. If a company did not receive FDI or made overseas investment in any of the previous year(s) including the current year, do we need to submit the FLA Return?

If the Indian company does not have any outstanding investment in respect of inward and outward FDI as on end-March of reporting year, the company need not submit the FLA Return.

Q4. If a company has received share application money, then is that company supposed to submit the FLA Return?

If a company has received only share application money and does not have any foreign direct investment or overseas direct investment outstanding as on end-March of the reporting year, then that company is not required to fill up FLA return.

Q5. If the company has not received any inward FDI / made overseas investment in the latest year, do they need to submit the FLA Return?

If the company has not ‘received any fresh FDI and/or ODI (overseas direct investment)’ in the latest year but the company has outstanding FDI and/or ODI, then that company is required to submit the FLA Return every year by July 15.

Q6. Whether FLA Return is required to be submitted by Registered Partnership Firms or branches or trustees, who have made Overseas Direct Investment or it is mandatory only for Companies (Registered under Companies Act, 1956)?

If the Partnership firms, Branches or Trustees have any outward FDI outstanding as on end-March of the reporting year, then they are required to send a request mail to get a dummy CIN number which will enable them to file the Excel based FLA Return. If any entity has already got the dummy CIN number from the previous survey, they should use the same CIN number in the current survey also.

It is also informed that these dummy CIN numbers are provided by RBI for filling the excel based FLA return only and not for any other purpose.

Q7. Is it required to submit Annual Performance Report for ODI, if we have submitted FLA Return?

FLA Return and Annual Performance Report (APR) for ODI are two different returns and monitored by two different departments of RBI. So you are required to submit both the returns if these are applicable for your company.

Q8. If non-resident shareholders of a company has transferred their shares to the residents during the reporting period, then whether that company is required to submit the FLA Return?

If all non-resident shareholders of a company has transferred their shares to the residents during the reporting period and the company does not have any outstanding investment in respect of inward and outward FDI as on end-March of reporting year, then the company need not submit the FLA Return.

Q9. If company issued the shares to non-resident on Non-Repatriable basis, whether that company is required to submit the FLA Return?

Shares issued by reporting company to non-resident on Non-Repatriable basis should not be considered as foreign investment; therefore, companies which have issued the shares to non-resident only on Non-Repatriable basis, is not required to submit the FLA Return.

Timeline for FLA Return

Q.10 What is the Due Date for Submission of The FLA Return?

FLA return is mandatory under FEMA 1999 and companies are required to submit the same based on audited/ unaudited account by July 15 every year.

Q10. In case where Account Closing Period of the company is different from reference period (end-March), can company report the information as per Account Closing Period?

ANo. Information should be reported for all the reference period, i.e. Previous March and Latest March. If Account Closing Period of the company is different from the reference period, then information should be given for the reference period on internal assessment.

Procedure for Filing FLA returns

Q11.  Where can company get revised format of Annual Return on Foreign Liabilities and Assets (FLA Return)?

Company can download the updated FLA return every year by end of May from this link: http://rbi.org.in/scripts/BS_ViewFemaForms.aspx. Company should only use the updated from for filing FLA return.

Q12. Where should we submit the FLA return?

Filled-in the Excel based FLA return should be sent by email by 15 July. Any other attachment should not be forwarded along with the FLA return.

Q13. From whose mail id the FLA Return should be e-mailed? Whether it is necessary to e-mail the FLA Return from the mail id of the person mentioned in Contact Details?

The filled-in Excel based FLA return should be forwarded through the official email id of any authorized person like CFO, Director, Company Secretary etc. Acknowledgement will be forwarded to the both email ids (sender and mentioned in Contact Details).

Q14. Is it required to submit any financial statements like balance sheet or P&L accounts (audited/ unaudited) along with the FLA return?

You are required to submit only the filled-in Excel based format of FLA by email before due date. Financial statements or any information in separate annex should not be forwarded along with the FLA return.

Q15. We have already submitted a hard copy of the FLA return with your office. Do we need to submit the FLA return in revised format once again?

The Return has to be submitted in the Excel based format, which has inbuilt checks and validations. So if there are any discrepancies in the furnished information, you will be able to know and rectify them at your end before submitting the information to RBI. Further, by submission of the information in Excel based format by email will ensure that you will receive the confirmation email from RBI within a week for successful processing of data submitted by you. In view of this, you are advised to resubmit the information in revised format of FLA return through email.

Q16: How would an acknowledgement is provided to us on submission of the form via e-mail?

After sending the Excel based FLA return to email, you will receive an acknowledgement. Ensure that you have received a successful processing acknowledgement. If some error is mentioned in the acknowledgement rather than successful processing statement, then you have to resubmit the form by rectifying the mentioned error.

Q17. Can we send the PDF copy of the FLA return as we are facing some technical problem while furnishing the information in excel based format?

You need to submit the information in the Excel based format only through email. In case of technical problem, you may forward the filled-in excel based form as it is as draft excel based FLA return to email in for rectifying the problem faced by you.

 

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eMinds Legal is a Corporate Law Firm based in Gurgaon, India specializing in Corporate Legal, Corporate Secretarial and Compliance. The Firm comprises of a team of Corporate Lawyers and Company Secretaries with in-depth subject matter knowledge and participative industry experience of over 15 years.

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