FLA Return Filing
Annual Foreign Liabilities and Assets Report to RBI
This page explains the FLA return in depth: its legal basis, who must file, the exact components to be reported, the re-invested earnings calculation, the two-stage filing approach (provisional before 15 July + revised after audit), the FIRMS FLAIR portal process, common errors that companies make, and the consequences of non-compliance.
Overview
FLA Return Filing
The Foreign Liabilities and Assets (FLA) Annual Return is one of India’s most important but least understood regulatory compliance requirements. Every Indian company, LLP, or other entity that has outstanding Foreign Direct Investment (FDI) from abroad OR has made Outward Direct Investment (ODI) in a foreign company must file the FLA return with the Reserve Bank of India (RBI) by 15 July of each year. The FLA is not a transaction report — it is a stock report. Unlike Form FC-GPR (which is filed each time FDI is received) or Form FC-TRS (which is filed on each share transfer), the FLA return captures the total accumulated balance of cross-border investments as on 31 March of the financial year. A company that received FDI five years ago and has had no new foreign investment since must still file the FLA every year as long as the foreign investor’s shareholding remains outstanding. Many companies misunderstand this and erroneously believe the FLA obligation lapses once the initial FC-GPR filing is done.
The FLA return is filed on the FIRMS (Foreign Investment Reporting and Management System) portal at firms.rbi.org.in through the FLAIR (Foreign Liabilities and Assets Information Reporting) module. It covers three components of the cross-border investment position: equity capital (the paid-up share capital held by non-residents or invested in foreign entities), re-invested earnings (the foreign investor’s proportionate share of the Indian company’s retained profits, or the Indian entity’s share of the foreign subsidiary’s profits), and other capital (inter-company loans between the Indian entity and its foreign parent, subsidiaries, or associates). The re-invested earnings component is the one most consistently omitted or calculated incorrectly, yet it is a mandatory element of the FLA and RBI specifically looks for it. N D Savla & Associates, Chartered Accountants based in Mumbai, prepares and files the FLA return for clients with FDI or ODI exposure, ensuring all three components are accurately computed and the filing is submitted by 15 July without fail.
This page explains the FLA return in depth: its legal basis, who must file, the exact components to be reported, the re-invested earnings calculation, the two-stage filing approach (provisional before 15 July + revised after audit), the FIRMS FLAIR portal process, common errors that companies make, and the consequences of non-compliance. For the broader FDI compliance context — including Form FC-GPR, Form FC-TRS, FEMA valuation, and compounding — see our FDI Filing with RBI guide. The FLA return data is also an input to the company’s secretarial compliance — any discrepancy between the FLA return’s equity capital figures and the statutory Register of Members is a red flag during secretarial due diligence; see our Company Secretary Services guide.
What Is the FLA Return? — Legal Basis and Purpose
The FLA Annual Return is an annual survey conducted by the RBI under the provisions of FEMA, 1999 (Section 6(2)(g)) and serves two key purposes:
- National statistics: The FLA data feeds into India’s official Balance of Payments (BOP) statistics and International Investment Position (IIP) data, which are reported to the International Monetary Fund (IMF) under the Special Data Dissemination Standard (SDDS). The FLA is how the RBI aggregates, at the national level, the total stock of foreign investment in India and Indian investment abroad
- Individual entity monitoring: The FLA data at the entity level allows the RBI to verify that the individual company’s foreign investment positions are consistent with the FC-GPR and FC-TRS filings made throughout the year. Discrepancies between cumulative FC-GPR inflows and the FLA closing equity capital are flagged for follow-up
The FLA covers the Indian entity’s international investment position in a format aligned with the IMF’s Balance of Payments and International Investment Position Manual (BPM6). The three components — equity capital, re-invested earnings, and other capital — are the BPM6 standard components of foreign direct investment stock measurement.
Who Must File the FLA Return?
Entities Required to File
- All Indian companies (private limited, public limited, producer companies) that have received FDI from a foreign investor and have outstanding foreign equity as on 31 March of the reporting year
- All Indian LLPs (Limited Liability Partnerships) that have received foreign investment under FEMA NDI Rules
- Indian companies that have made Outward Direct Investment (ODI) in a foreign company and have outstanding equity investment in foreign entities as on 31 March
- Indian companies that have both received FDI AND made ODI
- Indian companies/LLPs with outstanding inter-company loans from or to foreign related parties (other capital component)
- Dormant companies, shell companies, and holding companies with no active operations — if they have outstanding FDI or ODI positions, they must still file
Entities NOT Required to File FLA
- Companies with ONLY Foreign Portfolio Investment (FPI) from SEBI-registered FPIs — portfolio investment data is reported separately by custodians and brokers; the Indian company itself does not file FLA for this
- Indian companies with no foreign investment on either side (no FDI received, no ODI made) — purely domestic companies
- Indian companies where the foreign investor has completely exited AND the exit has been reported through FC-TRS — once there is no outstanding foreign investment balance, the FLA obligation ceases for that year
- Sole proprietorships, partnerships, trusts (unless specifically covered under FEMA NDI Rules for ODI purposes)
FLA Return Due Date and Filing Portal
- Due date: 15 July each year
- For: The financial year ending 31 March of the same calendar year (e.g., FLA due 15 July 2026 covers the year ended 31 March 2026)
- Portal: FIRMS (Foreign Investment Reporting and Management System) at
- firms.rbi.org.in — within the FLAIR (Foreign Liabilities and Assets Information Reporting) module
- Login: Entity must have a FIRMS entity registration (registered CIN for companies, LLPIN for LLPs). Same login used for FC-GPR and FC-TRS filings
- Based on: Audited annual financial statements (preferred) OR provisional unaudited accounts (acceptable if audit not complete by 15 July, with a revised FLA to be filed once audit is complete)
- Acknowledgment: Download the FLA acknowledgment receipt from the FIRMS portal immediately after filing — this is the only evidence of FLA filing compliance
What the FLA Return Covers — The Six Key Components
The FLA return is divided into two main sections — Foreign Liabilities (what foreign entities have invested in the Indian company) and Foreign Assets (what the Indian company has invested in foreign entities). Each section has three sub-components:
| FLA Component | What It Measures | How to Compute | Common Error |
|---|---|---|---|
| Foreign Liabilities — Equity Capital | Paid-up share capital (equity, CCPS, CCDs) held by non-residents in the Indian entity at the reporting date (31 March) | Face value of shares held by NR investors as per the Register of Members. Cross-check with FC-GPR filings | Including face value only, ignoring share premium paid by NR investors |
| Foreign Liabilities — Re-Invested Earnings | Foreign investor’s proportionate share of the Indian company’s accumulated retained earnings (not distributed as dividends) | Net profit after tax for the year × Foreign investor’s equity percentage − Dividend paid to NR investor | Omitting this component entirely; treating FLA as only equity capital |
| Foreign Liabilities — Other Capital | Inter-company loans, trade credits, and other financial instruments between the Indian company and its foreign parent/associates | Outstanding loan balance as per books; must match ECB filings if the inter-company loan was an ECB | Including third-party external commercial borrowings (ECBs) instead of only inter-company loans from foreign related parties |
| Foreign Assets — Equity Capital | Equity invested by the Indian entity in foreign subsidiaries or associates (ODI) | Investment in foreign subsidiary as per Indian company’s books (cost of investment) | Missing investments in overseas branches or representative offices |
| Foreign Assets — Re-Invested Earnings | Indian entity’s proportionate share of the foreign subsidiary’s accumulated retained earnings | Indian entity’s ownership % × Foreign subsidiary’s retained earnings | Using the foreign subsidiary’s total equity instead of only the retained earnings portion |
| Foreign Assets — Other Capital | Loans given by the Indian entity to its foreign subsidiaries or associates | Outstanding loan balance receivable from foreign entities as per books | Including trade receivables from unrelated foreign customers |
Foreign Liabilities — Equity Capital (The Core FDI Component)
Equity capital under foreign liabilities is the paid-up value of shares (equity shares, CCPS, CCDs, or warrants) held by non-resident investors in the Indian company as on 31 March. This includes:
- Equity shares held by foreign companies, foreign nationals (non-NRI), or other non-resident entities
- CCPS (Compulsorily Convertible Preference Shares) and CCDs (Compulsorily Convertible Debentures) held by NRs — these are treated as FDI from day one under FEMA
- NRI investments on repatriable basis (NRE/FCNR accounts) — treated as FDI under FEMA NDI Rules
- Shares held by registered FPIs (Foreign Portfolio Investors): NOT to be included in FLA equity capital — this is a very common error
Foreign Liabilities — Re-Invested Earnings (The Most Misunderstood Component)
Re-invested earnings represent the foreign investor’s share of the Indian company’s cumulative retained profits that have NOT been distributed as dividends. This is not a new concept in accounting (it is essentially the foreign investor’s share of the company’s reserves and surplus), but it is frequently omitted from FLA filings because companies don’t realise it is a mandatory component. Calculation:
- Re-invested earnings for the year = (Net profit after tax for the year × Foreign investor’s equity %age) − Dividends paid to the foreign investor during the year
- The FLA opening balance of re-invested earnings + current year re-invested earnings = FLA closing balance of re-invested earnings
- If the company made a net loss for the year: re-invested earnings can be negative (foreign investor’s share of the loss reduces the re-invested earnings balance)
The FLA Filing Process on the FIRMS FLAIR Portal — Step by Step
Gather Financial Data for FLA Computation
Collect: (i) Audited/provisional P&L Account and Balance Sheet for the year ended 31 March; (ii) Register of Members extract as on 31 March (showing all NR shareholders, their shareholding, and equity type); (iii) FC-GPR filings for the year (to verify inflows during the year); (iv) FC-TRS filings for the year (to verify transfers/exits); (v) Prior year’s FLA return (to get opening balances for equity capital and re-invested earnings); (vi) Details of any ODI made or received back; (vii) Any inter-company loan balances with foreign related parties.
Compute Each FLA Component
Using the data collected in Step 1, compute: Equity capital closing balance (from Register of Members, must match total NR shareholding × face value); Re-invested earnings for the year and closing balance (using the formula above); Other capital (inter-company loan balances). Verify that: Opening balance + Inflows − Outflows = Closing balance for each component. This triangulation catches errors before filing.
Log In to FIRMS Portal and Navigate to FLAIR
Go to firms.rbi.org.in. Log in using the entity’s registered credentials. From the dashboard, navigate to the FLAIR module. Select the relevant financial year for which the FLA is being filed. If the entity is filing for the first time, complete the entity registration (CIN/LLPIN, PAN, contact details) before proceeding.
Complete the FLA Return Form on FLAIR
The FLAIR module presents the FLA return in structured sections. Complete: Part I (entity details: CIN, PAN, NIC code, sector, listed/unlisted status, auditor name); Part II (Foreign Liabilities: equity capital opening/inflows/outflows/closing; re-invested earnings; other capital — all by investor country and type); Part III (Foreign Assets: ODI equity; re-invested earnings from ODI; other capital given); Other components: short-term trade credits, ECB outstanding, deposits. For each foreign investor/investee: name, country, type of entity, UIN (if available), percentage of equity, and amount.
Reconcile and Validate Before Submission
Before submitting, verify: Total equity capital in FLA matches total NR shareholding in the Register of Members; Closing equity balance matches FC-GPR/FC-TRS cumulative data; Re-invested earnings is populated (not left blank); If filing on provisional accounts, check that the figures are reasonable estimates pending final audit. The FLAIR module has built-in validations but not all errors are caught by the system — human review is essential.
Submit and Download Acknowledgment
Submit the FLA return. Download and save the acknowledgment receipt from the FIRMS FLAIR portal immediately. The acknowledgment contains a reference number and submission timestamp. File this acknowledgment with the company’s compliance records. If a revised FLA is to be filed later (after audit), the same process is followed — FLAIR allows filing of revised returns for the same financial year.
How FLA Relates to FC-GPR and FC-TRS
Understanding the relationship between FLA and the transaction-based forms (FC-GPR, FC-TRS) prevents the most common FLA computation errors:
- FC-GPR captures each PRIMARY issuance of shares to a foreign investor. Filed within 30 days of allotment. Reports the inflow amount and number of shares issued
- FC-TRS captures each SECONDARY transfer of shares between residents and non-residents. Filed within 60 days of payment. Reports the transfer price and number of shares transferred
- FLA consolidates ALL past FC-GPR and FC-TRS filings into an annual stock report. The FLA equity capital inflows for the year should equal the sum of all FC-GPR filings for that year
- Cross-check: Sum of all FC-GPR inflows across all years − exits reported in FC-TRS (NR selling to resident) = FLA equity capital closing balance. If these don’t match, there is either an unreported FC-GPR/FC-TRS or an error in the FLA
- The FLA “other capital” (inter-company loans) should be consistent with ECB filings (Form ECB 2, if the inter-company loan was an External Commercial Borrowing). A loan from a foreign parent that was not reported as ECB but now appears in FLA “other capital” may itself be a FEMA issue requiring review
Provisional vs Audited FLA — Filing in Two Stages
A practical challenge: the FLA due date is 15 July, but the statutory audit of most Indian companies is completed between August and September (30 days after the AGM, which itself must be held by 30 September). Many companies cannot file the FLA based on audited accounts by 15 July. The RBI accommodates this with a two-stage filing approach:
| Stage | When to File | Based On | Follow-up Action |
|---|---|---|---|
| Stage 1 — Initial FLA | By 15 July of the current year (for FY ended 31 March) | Audited accounts if audit is complete. Provisional (unaudited) accounts if audit is not yet done | If filed on provisional basis: proceed to Stage 2 |
| Stage 2 — Revised FLA | After audit is complete (typically August–November of the same year) | Audited annual financial statements for the year | Revised FLA replaces the provisional FLA. File on the FIRMS portal under the same CIN for the same FY |
| Correction to Past FLA | If an error is discovered in a previously filed FLA (prior years) | The corrected figures from the relevant prior year’s accounts | File a revised return for the relevant FY on FIRMS. Contact RBI if the FIRMS portal does not allow revision for that year |
The provisional FLA filed by 15 July should use the best available estimates (management accounts, provisional trial balance) as the basis. The revised FLA filed after audit should be based on the final audited figures. If there are material differences between the provisional and audited figures, the revised FLA is essential for accuracy in the RBI’s national statistics and the entity’s compliance record.
Common Errors in FLA Filing and How to Avoid Them
- Omitting re-invested earnings: The single most common error. Companies report only equity capital under Foreign Liabilities and leave re-invested earnings blank or zero. Re-invested earnings is a mandatory component and must be computed every year even if no dividend was paid
- Including FPI investment: Foreign Portfolio Investment (FPI) by SEBI-registered FPIs in listed company shares must NOT be included in the FLA return. FLA is for Foreign Direct Investment (strategic long-term investment), not portfolio investment
- Using face value instead of book value for equity capital: The FLA should report the paid-up value of shares (face value × number of shares) held by NRs. If the NR paid a premium above face value, the face value goes in “Equity Capital” and the premium conceptually goes in “Other Capital” (or is embedded in the book value depending on the RBI’s preferred methodology). Consult the RBI’s FLA instructions for the current guidance on this
- Not filing after no-new-FDI year: Companies that received FDI in prior years but no new FDI in the current year often forget the FLA because there is no FC-GPR trigger. The FLA obligation is based on outstanding balance, not new transactions
- Filing for FPI instead of FDI: Occasionally companies confuse which foreign investments count as FDI (reportable in FLA) vs FPI (not reportable). The distinction: FDI = investment with intent to participate in management (generally primary investment or significant secondary investment); FPI = investment purely for returns without management participation
- Inconsistency between FLA and Register of Members: The NR equity balance in FLA must match the Register of Members exactly on 31 March. Discrepancies suggest either the Register of Members is not updated for a FC-TRS transaction or the FLA figures are wrong
- Missing the 15 July deadline without filing provisional accounts: Some companies wait for the final audit and miss 15 July entirely. Always file a provisional FLA by 15 July and revise after the audit. A timely provisional filing is always better than a late final filing
Consequences of Non-Filing and Late Filing
The FLA Annual Return is mandatory under FEMA. Non-compliance has the following consequences:
- FEMA contravention: Non-filing or late filing is technically a FEMA violation. While the RBI has not historically prosecuted companies for FLA non-filing alone, it can take note during FEMA inspections and audits
- Complications in future FDI filings: When a company tries to file a new FC-GPR (for fresh FDI) or an FC-TRS (for share transfer) on the FIRMS portal, the system may flag outstanding FLA returns and require them to be filed first
- Adverse observation in FEMA audit: During a Reserve Bank inspection or a FEMA compliance audit (by the company’s own auditors as part of secretarial audit under Section 204 of the Companies Act), missing FLA filings are specifically flagged
- Compounding requirement: If the non-filing is discovered and determined to be a FEMA violation, the company may need to file a compounding application with the RBI. While the FLA non-filing compounding fee is typically modest, the process is time-consuming and creates a compliance record
- Data discrepancy with RBI: If the FLA has not been filed, the RBI does not have an accurate picture of the entity’s FDI/ODI position. Any future FEMA query or inspection will immediately reveal the gap between FC-GPR data on FIRMS and the missing FLA data
FLA Return — Historical Background
Origin in Balance of Payments Reporting
The FLA return has its origins in India’s commitment to the IMF’s data standards for international investment position reporting. As India opened its economy to FDI in the 1990s and the volume of FDI grew significantly, the RBI needed a systematic mechanism to track the total stock of foreign investment, not just the transaction flows captured by individual FC-GPR filings. The FLA was introduced as an annual census of cross-border investment positions, modelled on the IMF’s BPM6 framework. The RBI uses FLA data to compile and publish the IIP (International Investment Position) statistics, which are part of India’s official external sector statistics.
Transition to FIRMS/FLAIR
Until the FIRMS portal was launched (around 2018), the FLA return was submitted through the RBI’s earlier electronic reporting mechanisms, including email-based submissions and the earlier version of the RBI portal. The FLAIR module within FIRMS has made the FLA filing significantly more structured, with pre-populated data from prior FC-GPR and FC-TRS filings helping to reduce manual data entry errors. The FLAIR module has also improved the RBI’s ability to cross-reference individual entity FLA filings against the aggregate FC-GPR data, making data inconsistencies more visible. This has created both an incentive for accuracy (the RBI can now query discrepancies more easily) and a benefit (the pre-populated data reduces filing time for compliant companies).
Service Scope
Full Scope of Our FLA Return Engagement
The FLA return is filed as part of a managed annual FEMA calendar:
Why Work With Us
Why Choose N D Savla & Associates for FLA Return Filing?
Technical Accuracy in Re-Invested Earnings Computation
The re-invested earnings component of the FLA requires integration of the audited financial statements (for the PAT figure), the foreign investor’s equity percentage (from the Register of Members), and any dividends paid to the foreign investor (from the dividend payment records). Getting this right requires financial data from accounts, company law data from the Company Secretarial records, and FEMA framework knowledge. N D Savla & Associates handles all three, ensuring the re-invested earnings is computed accurately each year and the FLA presents a complete picture.
Cross-Validation with FC-GPR and FC-TRS
Before filing any FLA, we cross-validate the proposed FLA equity capital figures against the cumulative FC-GPR and FC-TRS data already on the FIRMS portal. Any discrepancy between the two is investigated and resolved before filing. This prevents the awkward situation of the RBI querying a mismatch between the entity’s FC-GPR records and the FLA equity balance — a situation that can trigger a FEMA review. For our complete FDI Filing services, including FC-GPR and FC-TRS management, see our FDI Filing guide.
Timely Provisional Filing + Revised FLA After Audit
We manage the two-stage FLA filing for clients: a provisional FLA by 15 July (based on management accounts or the best available pre-audit data) and a revised FLA after the statutory audit is complete. We maintain a client-wise FLA calendar with reminders for both stages, ensuring no client misses 15 July because they were waiting for the audit, and no client forgets to file the revised FLA once the audit is done.
Retrospective FLA for Non-Filers
For companies that have been non-filers for one or more years, we prepare and file all outstanding FLA returns on the FIRMS portal, working backward through multiple financial years. We also provide advisory on whether the non-filing period requires compounding with the RBI and, if so, assist with the compounding application. Companies that come to us after years of inadvertent non-compliance benefit from our structured approach: file all pending FLAs first, then assess whether compounding is necessary, then establish a proper FLA compliance process for the future.
Related Services
Related FEMA and RBI Reporting Services
The FLA return reconciles against the year’s other RBI filings:
Frequently Asked Questions
Frequently Asked Questions About FLA Return Filing
We received FDI three years ago and have not received any FDI since. Do we still need to file the FLA every year?
Yes, absolutely. The FLA obligation is based on the outstanding balance of foreign investment, not on new transactions. As long as the foreign investor holds shares in your company on 31 March of any given year, the FLA must be filed for that year. The obligation ceases only when the foreign investor fully exits (all shares transferred to a resident) and the FC-TRS for the exit transaction has been filed. If your foreign investor still holds shares today, you are required to file the FLA by 15 July every year.
What is the re-invested earnings component and can we leave it blank?
Re-invested earnings represents the foreign investor’s proportionate share of your company’s net retained profits (profits not distributed as dividends). It is computed as: Net PAT for the year × Foreign equity % − Dividends paid to the foreign investor. You CANNOT leave it blank. The RBI’s FLA instructions specifically require this component. If your company made a loss, the re-invested earnings will be negative for the year, which is acceptable — but a blank or zero figure is not correct unless the company is at exactly breakeven (zero profit/loss) or all profits were distributed as dividends.
What if the statutory audit is not complete by 15 July?
File a provisional FLA by 15 July based on your best available pre-audit figures (management accounts, provisional trial balance). The FLAIR module specifically provides for filing based on provisional accounts. After the audit is complete, file a revised FLA on the FIRMS portal for the same financial year, incorporating the audited figures. It is always better to file a provisional FLA on time and revise it later than to miss 15 July waiting for the final audit.
Should FPI (Foreign Portfolio Investment) be included in the FLA?
No. Foreign Portfolio Investment (FPI) by SEBI-registered FPIs in listed Indian company shares is specifically excluded from the FLA. FLA covers only Foreign Direct Investment (FDI) and Outward Direct Investment (ODI). FPI data is reported separately by custodians and depositories. If your company has SEBI-registered FPIs as shareholders (in addition to FDI investors), only the FDI investors’ holdings are reported in the FLA — the FPI shareholders’ holdings are excluded. This is one of the most common errors in FLA filing for listed companies.
Our company made an investment in a foreign subsidiary (ODI). Does this affect the FLA?
Yes. Outward Direct Investment (ODI) by an Indian company in a foreign company triggers an FLA filing obligation on the “Foreign Assets” side of the FLA return. The foreign assets section of the FLA reports: equity capital invested in the foreign subsidiary/associate; re-invested earnings (Indian entity’s share of the foreign subsidiary’s retained profits); and other capital (loans given to the foreign subsidiary). ODI transactions are separately reported through the ODI forms on the FIRMS portal (similar to how FC-GPR reports inward FDI), but the FLA is the annual stock report that captures the outstanding ODI position.
N D Savla & Associates — Chartered Accountants, Mumbai
Need FLA Return Filing by 15 July? We Handle Every Component Accurately.
Equity capital, re-invested earnings, other capital — computed accurately and filed on time on the FIRMS FLAIR portal.
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