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Foreign Liabilities and Assets Return (FLA): A Manual for Indian entity

Updated: Jul 3

In India’s financial landscape, compliance with regulatory frameworks is crucial for smooth business operations, especially for foreign investments. The Reserve Bank of India (RBI), which looks after the country’s money matters, has made it mandatory for Indian entities to report their outstanding Foreign Direct Investment (FDI) and Overseas direct investments (ODI) through the filing of Foreign Liabilities and Assets (FLA) returns with the Reserve bank of India (RBI). Let’s learn more about RBI’s FLA.

What is FLA?

The Foreign Liabilities and Assets (FLA) return is a mandatory filing requirement under the Foreign Exchange Management Act (FEMA), 1999, enforced by the Reserve Bank of India (RBI). It entails Indian entities reporting their foreign assets and liabilities to the RBI. The RBI issues various notifications, circulars, and guidelines specifying the FLA reporting obligations, including submission timelines, format, entities required to file, and consequences of non-compliance.

The FLA return serves the dual purpose of regulatory compliance and supporting the broader economic objectives of the Indian government. It aims to collect comprehensive data on foreign investments made or received by Indian entities, thereby facilitating RBI oversight of the country’s external sector. By capturing detailed information such as foreign direct investment (FDI), direct and portfolio investments overseas, outstanding loans, trade credits, and guarantees, the FLA return provides insights into India’s global financial engagements.

Moreover, the FLA return assists the RBI in gathering vital intelligence on the nation’s external sector dynamics, including inbound and outbound foreign investments. This information is instrumental in formulating strategies for managing foreign exchange reserves and regulating external economic activities.

Here are some key aspects of FLA Returns:

Applicability: Indian entities that have received foreign direct investment (FDI) or made investments abroad (ODI) are required to file the FLA return.

The following entities holding foreign assets and/or liabilities on their balance sheets and have made ODI or received FDI abroad in the previous year(s) and the current year are required to file the annual return on FLA

  • A Company within the meaning of section 1(4) of the Companies Act, 2013.

  • A Limited Liability Partnership (LLP) registered under the Act, 2008

  • Others [include SEBI registered Alternative Investment Funds (AIFs), Partnership Firms, Public-Private Partnerships (PPP) etc.]

  • If the Partnership firms, Branches, or Trustees have any FDI or ODI outstanding as of the end of March at the latest F.Y., then they are required to file the FLA return.

Purpose: The FLA return helps RBI in collecting comprehensive data on the foreign assets and liabilities of Indian entities. It assists in analyzing the country’s external sector and formulating policies accordingly.

Reporting Period: The FLA return covers information for the financial year ending on March 31st. The companies should submit the return within the specified deadline after the end of the financial year.

Contents: The FLA return typically includes details of FDI received, investments made abroad (both direct and portfolio), outstanding loans, trade credits, guarantees, etc.

Online Filing: Companies are required to file the FLA return online through the RBI’s dedicated online portal.

Due Date: The due date for filing an FLA return is July 15 each year.

Penalties: Non-compliance with FLA filing requirements can result in monetary penalties and/or civil/criminal liability. Please refer section Consequence for non-filing of FLA below for detailed info.


The Foreign Liabilities and Assets (FLA) return holds significant importance for various stakeholders, notably for regulatory authorities like the Reserve Bank of India (RBI) and other policymakers. Following are some key aspects of its significance:

  • Monitoring Foreign Investments: The FLA return provides crucial data on the foreign investments made by Indian entities. It allows regulatory authorities to monitor the flow of foreign investments into and out of the country and provides insights into trends, volumes, and destinations of such investments.

  • Policy formulations: The data collected through FLA returns assists policymakers, including the RBI, in formulating and implementing policies related to foreign exchange management, capital flows, and overall economic regulation. It helps assess the impact of existing policies and design new ones to promote economic stability and growth.

  • Balance of Payment Analysis: FLA data contributes to the analysis of the nation’s balance of payments (BoP). An understanding of the external liabilities and assets composition facilitates any assessment, of the country’s overall economic health/well-being and its position in the global economy.

  • International Comparisons. FLA data enables comparisons with foreign investment patterns globally, aiding policymakers and analysts in gauging India’s performance and identifying areas for improvement.

  • Investor Confidence: Accurate FLA reporting boosts investor confidence in India’s regulatory framework and economic stability, showcasing transparency in foreign investment monitoring. This transparency attracts foreign investors, fueling economic growth.

  • Compliance and Enforcement: FLA filing mandates ensure Indian entities comply with foreign investment regulations, preserving financial system integrity, curbing forbidden flows, and promoting fair business practices.

Information required for Filing FLA

Filing the FLA return is mandatory for Indian entities that have received FDI or made ODI during the reporting period.: Read the below information for filing an FLA return:

Basic Company Information: Details such as name, address, Corporate Identity Number (CIN), etc.

Financial Details: This includes financial statements such as balance sheets, profit and loss accounts, audited financial statements, etc., prepared in compliance with the Indian Accounting Standards (Ind-AS) or Accounting Standards (AS).

Foreign Assets and Liabilities: Information regarding foreign assets and liabilities held by the Indian entities, including details of any overseas investments.

Details of Foreign Investments: Information about any FDI received by the Indian entities during the reporting period, including the amount, source country, sector, etc.

Reporting Format: The FLA return is typically filed in a format specified by the Reserve Bank of India (RBI). This format may require specific details to be filled in.

Process of Filing

The process of filing the FLA return in India typically involves several steps:

  • Registration on RBI Portal: Entities mandated to submit FLA returns must register on RBI’s FLAIR (Foreign Liabilities and Assets Information Reporting) portal.

  • Gathering Information: Collect essential financial and forex data for FLA returns, covering foreign assets, liabilities, FDI and ODI etc.

  • Preparation of financial statements: Furthermore, entities are required to prepare their FLA return financial statements in accordance with Indian Accounting Standards (Ind-AS/AS) and file the FLA by the due date. In case the audited balance sheet is not yet available, provisional or unaudited figures may be submitted. Later, entities may request RBI approval to revise the FLA return with audited numbers for accuracy and compliance.

  • Completing FLA return form: Complete the FLA return form following RBI’s format, covering entity details, financials, FDI specifics, and foreign assets and liabilities.

  • Verification and Review: Review and verify the completed FLA return form with the supporting documentation.

  • Submission of FLA Return: Once the FLA return form is complete and verified, submit it through the FLAIR portal within the stipulated deadline.

  • Acknowledgment: After submission, the RBI will provide an acknowledgment or reference number for the filed FLA return. Keep this acknowledgment for future reference.

Consequences for non-filing of FLA

Late filing or non-filing of FLA returns may lead to penalties due to the significance of the data for foreign investment oversight. Penalties vary in different circumstances, with RBI discretion.

Penalties for not filing FLA may include:

  • Monetary fine: The RBI may impose monetary fines and penalties on companies that fail to submit their FLA returns within the stipulated timeframe. The amount of the fine can vary depending on factors such as the severity of the violation, the size of the company, and any previous instances of non-compliance.

  • Compounding of Contraventions: Repeated non-compliance or severe violations may prompt RBI to start compounding proceedings. Compounding proceedings involve paying a penalty to address the violation and prevent legal action.

  • Restrictions on Foreign Transactions: Consistent Non-filing of FLA return may trigger regulatory actions, like foreign exchange transaction restrictions. It impacts the company’s international trade and investment engagements.

  • Difficulty in accessing financial services: Banks and financial institutions may scrutinize entity’s compliance records before providing them with financial services such as loans, credit facilities, or international banking services. Non-filing of FLA returns could raise red flags and make it more challenging for companies to access these services.

  • Legal Consequences: Continued non-compliance, including FLA reporting, may lead to legal action against the entity and its officers. This could result in civil or criminal penalties, such as fines, injunctions, or imprisonment in severe cases.

  • Loss of Reputation: Non-filing of FLA returns can damage the company’s reputation and credibility with regulatory authorities, investors, and business partners. It may indicate a lack of transparency and compliance culture within the organization, which can negatively impact its standing in the business community.

Exemption from Filing:

  • If the Indian entity does not have any outstanding FDI and ODI as of the end of March of the reporting year, they need not submit the FLA return.

  • Entities without FDI or ODI outstanding as of the end of March of the latest financial year are not required to submit the FLA return, even if they have received share application money

  • Entities that have issued the shares to non-residents only on a non-repatriable basis are not required to submit the FLA return.


In conclusion, FLA returns stand as a significant factor in India’s regulatory framework, playing a pivotal role in foreign investment monitoring and economic policymaking. By adhering to FLA filing requirements, Indian entities not only ensure regulatory compliance but also contribute to the transparency and resilience of the country’s financial ecosystem. Staying informed about FLA reporting changes and deadlines is paramount for mitigating non-compliance risks and fostering a culture of regulatory diligence.


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