RBI Compliances

RBI Compliances

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What is an FLA Return?

  • The Foreign Liabilities and Assets (FLA) Return is an annual filing requirement mandated by the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017.
  • Indian companies that have received Foreign Direct Investment (FDI) or made Overseas Direct Investment (ODI), as well as Limited Liability Partnerships (LLPs) that have received investment through capital contribution, must submit the FLA form to the Reserve Bank.
  • The deadline for filing the FLA Return is 15th July of each year.
  • It provides crucial information about foreign assets and liabilities held by Indian entities.

Who Needs to File the FLA Return?

  • Companies and LLPs that hold foreign assets or liabilities in their financial statements as of 31st March are required to file the FLA return.
  • Even if an Indian company has not received any fresh FDI or ODI in the latest year but has outstanding FDI or ODI, it still needs to file the FLA Return by the specified deadline.

Online Reporting via FLAIR

The RBI has transitioned from the earlier email-based reporting system to a web-based online reporting system for FLA returns.

This move enhances security and streamlines the submission process.

Entities can now submit their FLA returns through an online form, making compliance more efficient and accessible.

Special Features

Let’s explore the special features of the revised Foreign Liabilities and Assets Information Reporting (FLAIR) System:

The revised FLAIR form now includes additional fields to capture information regarding the first year of receipt of Overseas Direct Investment (ODI)/Foreign Direct Investment (FDI), as well as disinvestment details.

Upon submission of the FLA form via the RBI Portal, reporting entities will receive a system-generated acknowledgment receipt, providing confirmation of successful submission

Reporting entities have the flexibility to revise submitted data if necessary and can easily view and download the information provided through the portal.

Entities are now able to submit FLA information for earlier years following confirmation from the RBI upon request via email.

The conventional method of email-based submission of FLA forms will be phased out with the introduction of the new portal-based system.

These requirements are effective immediately and apply to the reporting of information for the fiscal year 2018-19.

These special features aim to streamline the FLAIR reporting process, enhance data accuracy, and ensure compliance with regulatory standards set by the RBI.

Due date of filing

The Foreign Liabilities and Assets Information Reporting (FLAIR) return has an annual filing requirement. Entities are expected to submit it on or before 15th July each year, which was extended to 31st July 2019. Notably, the new form is applicable for the current year’s filing as well, with the same deadline of 15th July 2019.

It’s indeed ironic that the Reserve Bank of India (RBI) introduced the new form just 18 days before the filing deadline. Hopefully, the RBI will provide FAQs to address any queries related to filing the web-based FLA return. Let’s hope for a smooth process without any technical glitches, and if any issues arise, an extension of the deadline would be appreciated.

Exploring Consequences for Non-Compliance

  • The Reserve Bank of India (RBI) leaves no room for ambiguity. Entities failing to adhere to the latest circular, specifically regarding the imperative of filing forms via the new web-based system, will find themselves in direct violation of FEMA regulations.
  • Corporate Hub stands as your ally in navigating the complexities of regulatory adherence. With our professional, technology-driven approach, we streamline FDI/ODI compliances, RBI filings, business registrations, tax obligations, and all other legal requirements pertaining to your business in India
  • Trust in Corporate Hub to not only simplify procedures but also ensure your full compliance with the intricate web of regulations governing your enterprise.