What is FLA Return?

The FLA Return is an essential yearly filing for Indian businesses, LLPs, and other organizations that have either received foreign direct investment (FDI) or have invested FDI overseas. This article will cover everything you need to know about the FLA Return, including who needs to file it, key regulations, and how to submit it. At IndiaFilings, we offer expert assistance for FLA Return filing, ensuring that Indian businesses and LLPs navigate the process seamlessly.

Introduction to FLA Return

The FLA Return is an annual submission required by Indian organizations that have either received foreign direct investment (FDI) or have undertaken FDI overseas to the Reserve Bank of India (RBI). This report is designed to gather details on the foreign liabilities and assets that these entities report on their balance sheets. It falls under the Foreign Exchange Management Act, 1999 (FEMA) regulatory framework, ensuring comprehensive oversight of India's foreign exchange and cross-border financial transactions.

Applicability of FLA Return

The FLA Return must be filed by a range of entities, including:

Companies established under the Companies Act, 2013.
Limited Liability Partnerships (LLPs) were formed under the Limited Liability Partnership Act 2008.
Various other organizations, such as SEBI-registered Alternative Investment Funds (AIFs), Partnership Firms, and Public-Private Partnerships (PPPs), are engaged in foreign direct investment activities within India or abroad.

Non-Applicability of FLA Return

The requirement to submit the FLA Return does not apply to entities in the following situations:

If the entity has neither received Foreign Direct Investment (FDI) nor made any overseas investments in the current or previous years.
If the entity's foreign investment is limited to sharing application money without any outstanding FDI or overseas direct investment by the end of March of the reporting year,
Suppose non-resident shareholders have sold their shares to residents within the reporting period, and the entity has only issued shares to non-residents. In that case, the invested capital cannot be converted back into foreign currency and taken out of the country.

Due Date for Filing FLA Return

The FLA Return must be filed by the 15th of July each year. In cases where the accounts have not been audited by this deadline, entities should file the FLA Return using unaudited or provisional account figures. Should the accounts be audited subsequently, a revised FLA Return must be filed, with the deadline for this revised submission being the 30th of September of the same year.

Procedure for FLA Return Filings

Since June 2019, the process for submitting the annual FLA return has transitioned from format and email-based reporting to a web-based system. Here's how entities can navigate this system on the FLAIR portal:

Setting Up a Business User

Access the FLAIR Portal: Access the official website of the FLAIR portal.
Register as a New Entity User: Click on the "Registration Form for New Entity User" to begin registering.
Fill in the Entity Details: Provide comprehensive details about your entity, including the Corporate Identification Number (CIN)/Registration Number, Company Name, PAN Number, registered address with PIN, and contact details. Confirm any changes to the CIN/Registration Number or company name during the last financial year ending in March.
Authorized Person's Information: Input details of the authorized person, including name, PAN number, and contact information.
Upload Documents: Attach a verification letter, an authority letter, and copies of the PAN cards for the entity and the authorized person.

Preparing and Submitting the FLA Return

Create and Verify Business User: Once you have successfully registered and received your password from the RBI via email, log in to prepare the FLA return. The return is structured into five sections for comprehensive reporting.
Review and Submit: After completing the FLA return, download it, review it for accuracy, and submit it online through the FLAIR portal.

After Submission

Acknowledgement: Upon successful submission, the FLAIR portal will generate an acknowledgement stating that the FLA return has been processed successfully for the year.

Important Notes:

The registered email ID is crucial as it will receive the password and OTP for each login attempt; ensure it's entered correctly.

Should there be any changes in the entity's email ID or name during the reporting period, deactivate the current account by emailing surveyfla@rbi.org.in and creating a new one for the current year's FLA return filing.
If the CIN/registration number remains unchanged, previously entered data will populate in the new account, facilitating the update process.

Sections of the FLA Return

The Reserve Bank of India (RBI) has structured the FLA Return into five distinct sections for a comprehensive capture of foreign liabilities and assets by Indian entities:

Section I - Identification particulars

Prefilled Information: Company name, PAN, CIN, and head of the institution's email are auto-filled post successful user creation.
Contact Details: Provide details of the contact person, including name, phone number, mobile number, email, designation, website, and account closing date.
NIC Code: Use National Industrial Classification (NIC) -2008 codes for industry specification. If multiple activities are conducted, select the primary revenue-generating activity.