As more and more Indian entities are bringing in foreign investors in the lure of cheaper, easily available, and sufficient funds Foreign Direct Investment (FDI) has become a routine affair in the Indian economy.
Similarly, Overseas Direct Investment (ODI) which means Indian Entities investing outside India have also increased in number manifold (though still small in number as compared to FDI).
Foreign Liabilities and Assets (FLA) Return is an Annual Return that must be filed by entities that have received FDI and/or made overseas investments in any of the previous years, including the current year, i.e., entities with Foreign Assets or Liabilities on their Balance Sheets.
Annual return on Foreign Liabilities and Assets (FLA) is required to be submitted by all the companies which have received FDI and/or made overseas investment in any of the previous year(s), including the current year (July 15 every year).
To monitor these transactions RBI have come up a few compliances, one such being FLA.
FLA is an annual return prescribed under FEMA regulations and is applicable to all companies/Firms who have received FDI during the year or who have made ODI during the year and these transactions are outstanding at the end of the year. This means that the FDI/ODI has to be still in the books of the entity and not squared off during the year.
The due date is 15th July (Extended to 31st July 2020 this year). In case the entity’s books are still unaudited then provisional figures have to be uploaded by the due date. In case there are any changes after the filing of provisional figures then the company shall file a revised FLA return based on audited accounts by the end – September.
The return has to be mailed to the prescribed email of the RBI by the CS/CFO/Directors of the company from the registered email id.
Penalty of thrice the amount of sum of FDI/ODI or Rs 2 lakhs with additional Rs 5000 per day if delay is continuing.