FLA Return (Foreign Liabilities and Assets)

By Dev Rao | Updated March 2026

What Is the FLA Return?

The FLA Return (Foreign Liabilities and Assets Annual Return) is a mandatory census filed with the Reserve Bank of India (RBI) by every Indian company, LLP, or other entity that has received Foreign Direct Investment (FDI) or has made Overseas Direct Investment (ODI). It captures the outstanding stock of foreign liabilities (inward investment) and foreign assets (outward investment) as of 31 March of each reporting year. The RBI uses FLA data to compile India's International Investment Position (IIP) and Balance of Payments (BoP) statistics.

Legal Basis

The FLA Return is mandated under:

• FEMA Notification No. 13 (R)/2016 — Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019, read with the earlier FEMA 20(R) notifications
• RBI Master Direction on Reporting under FEMA, 1999 (as updated) — specifically the chapter on annual return on Foreign Liabilities and Assets
• Section 11(1) of the Foreign Exchange Management Act, 1999 — which empowers the RBI to collect information from persons dealing in foreign exchange

The RBI's Department of Statistics and Information Management (DSIM) administers the FLA census, and filing is done on the FLAIR (Foreign Liabilities and Assets Information Reporting) portal at flair.rbi.org.in.

Who Must File?

The FLA Return must be filed by every Indian entity that meets either condition:

There is no minimum threshold. Even if the outstanding foreign investment is INR 1, the entity must file.

Filing Deadline and Revised Return

If audited accounts are available before 15 July, the entity can file a single return on audited figures. If not, it must file provisionally by 15 July and then revise by 30 September once the audit is complete.

The FLAIR Portal

Since 2019, the RBI has required all FLA filings through the FLAIR portal (flair.rbi.org.in). The process is:

1. Register on FLAIR — First-time filers must create an account using the entity's CIN/LLPIN and PAN. The system verifies details against MCA records.
2. Login and select reporting year — The portal opens annually around 1 April for the preceding year's data.
3. Fill in foreign liabilities — Report all inward FDI: equity held by non-residents, outstanding CCPS/CCDs, inter-company loans from foreign parent/group entities, trade credit from related parties.
4. Fill in foreign assets — Report all outward ODI: equity in foreign subsidiaries/JVs, loans extended to foreign entities, guarantees issued.
5. Submit — The portal generates an acknowledgment with a unique reference number.

What Data Does the FLA Return Capture?

The FLA Return is extensive. Key sections include:

• Part A — Company details: CIN, PAN, industry classification (NIC code), turnover, total assets, number of employees
• Part B — Foreign liabilities: Equity capital held by direct investors (country-wise breakdown), reinvested earnings, inter-company debt (from parent and fellow subsidiaries), trade credit from related non-resident entities
• Part C — Foreign assets: Equity capital in foreign entities (country-wise), inter-company loans to foreign affiliates, other claims on non-residents
• Part D — Capital transactions during the year: New equity received, equity redeemed, loans drawn, loans repaid, dividends paid to foreign investors

How This Affects Foreign Investors

If you are a foreign entrepreneur who has invested in an Indian private limited company, your Indian entity is obligated to file the FLA Return every year as long as your investment remains outstanding. This has practical consequences:

• Your Indian company must track your holding precisely. The FLA requires country-wise and investor-wise breakdown of foreign equity. If your holding structure involves multiple countries (e.g., a Delaware parent investing through a Singapore SPV), each layer must be reported separately.
• Reinvested earnings must be reported. Even if no new capital came in during the year, if the Indian company earned profits attributable to the foreign shareholding and did not distribute them, those retained earnings are reported as reinvested FDI.
• Non-filing blocks future FC-GPR filings. The RBI and AD banks increasingly cross-check FLA compliance before processing new FDI reporting. An overdue FLA Return can delay your next funding round.
• RBI uses FLA data for macro surveillance. Discrepancies between FLA Return data and SMF/FIRMS transaction-level reporting can trigger queries from the RBI.

Penalties for Non-Filing or Late Filing

• Late Submission Fee: INR 7,500 for delayed filing beyond the 15 July deadline
• FEMA penalties under Section 13: Up to three times the amount involved in the contravention, or INR 200,000 if the amount cannot be quantified
• Continuing default: Additional INR 5,000 per day for every day the contravention continues after the initial penalty
• Practical consequence: RBI and AD banks may refuse to process new inward or outward remittances until FLA compliance is current

Common Mistakes

• Assuming FLA is the same as FC-GPR/SMF reporting. FC-GPR and the Single Master Form report individual transactions. The FLA Return reports the cumulative stock position as of 31 March. Both are required, and one does not substitute for the other.
• Not filing when no new transaction occurred during the year. If FDI or ODI remains outstanding on 31 March, the FLA Return is required even if zero transactions happened during the year.
• Missing the revised return deadline of 30 September. Many companies file the provisional return by 15 July but forget to file the revised return with audited figures by 30 September.
• Incorrect country attribution. The FLA requires foreign liabilities to be reported by the immediate investor's country of residence, not the ultimate beneficial owner's country. Getting this wrong leads to RBI queries.
• Omitting inter-company debt from related non-resident entities. Loans from the foreign parent company or fellow subsidiaries are foreign liabilities and must be captured in the FLA Return, not just equity investment.

Practical Example

GlobalTech Inc., a US company, invested USD 500,000 in TechIndia Pvt Ltd in 2023 by subscribing to equity shares. TechIndia also received an inter-company loan of USD 200,000 from GlobalTech in 2024. TechIndia has made no overseas investments.

As of 31 March 2025, TechIndia has outstanding foreign liabilities of USD 700,000 (USD 500,000 equity + USD 200,000 inter-company loan). TechIndia earned INR 80 lakh in profits during FY 2024-25, of which GlobalTech's share (based on 100% holding) is INR 80 lakh — reported as reinvested earnings.

TechIndia must file its FLA Return on the FLAIR portal by 15 July 2025 with provisional figures, and revise with audited figures by 30 September 2025. The return shows foreign liabilities in Part B (equity from the US, inter-company loan from the US) and zero foreign assets in Part C (no ODI). In Part D, TechIndia reports the inter-company loan drawn during the year.

Key Takeaways

• Every Indian entity with outstanding FDI or ODI as of 31 March must file the FLA Return — there is no minimum threshold
• The deadline is 15 July (provisional) and 30 September (revised with audited figures)
• Filing is done on the FLAIR portal (flair.rbi.org.in), not through the AD bank or FIRMS
• The FLA captures stock positions (outstanding balances), not individual transactions — it complements, not replaces, FC-GPR and SMF reporting
• Non-filing attracts an LSF of INR 7,500, with potential FEMA penalties of up to 3x the amount involved
• Foreign investors should ensure their Indian entity files the FLA Return every year to avoid delays in future funding rounds

Need help filing your FLA Return or clearing overdue compliance? Beacon Filing manages FLA filings on the FLAIR portal for Indian subsidiaries of foreign companies.