June 12, 2023
Durga Prasad

Understanding  FLA Reporting: A Comprehensive Guide for Indian Companies

Foreign Liabilities and Assets (FLA) reporting

The Foreign Exchange Management Act, 1999 (FEMA 1999) in India requires the reporting of Foreign Liabilities and Assets (FLA), which is an essential mechanism for gathering comprehensive information on Foreign Direct Investments (FDI) and Overseas Direct Investments (ODI) of Indian companies.

Purpose of FLA:

The primary objective of FLA reporting is to collect exhaustive information about the foreign liabilities (FDI) and assets (ODI) of Indian companies. This enables an accurate assessment of the extent of overseas investments made by Indian entities and the level of foreign investment attracted by them. FLA reporting operates under the legal framework of FEMA 1999 and is regulated by the Reserve Bank of India (RBI).

Applicability of FLA :

FLA reporting is mandatory for all Indian entities that have either received FDI or made ODI, irrespective of the amount or proportion of the investment. This requirement encompasses both listed and unlisted companies, making it a widespread regulatory norm.

Reporting Frequency and Timeline:

FLA returns must be submitted annually, reflecting the year-end status of foreign liabilities and assets for the relevant financial year. The submission deadline is July 15th, following the end of the financial year on March 31st. For example, for the financial year ending on March 31, 2023, the FLA return should be submitted by July 15, 2023.

Reporting Process:

FLA returns are submitted electronically through the FLAIR (Foreign Liabilities and Assets Information Reporting) online portal, managed by the RBI. To comply, companies need to register themselves on the FLAIR system to access and submit the returns.

Information to be Reported:

The FLA return requires detailed information related to the company's foreign liabilities and assets. This includes:

1. FDI in the Company: Disclosure of equity capital, other capital instruments, and reinvested earnings held by non-resident entities. This sheds light on the degree of foreign ownership and influence within the company.

2. ODI by the Company: Details of investments made by the company in foreign entities, including equity capital, other capital instruments, and intercompany borrowings. This provides insights into the extent and nature of foreign investments by Indian companies.

3. Other Liabilities and Assets: A comprehensive account of trade credits, loans, borrowings, guarantees, trade payables, trade receivables, and other financial liabilities and assets. This offers a holistic view of the company's international financial position beyond equity investments.

Penalties for Non-compliance:

Failure to comply with FLA reporting requirements can result in penalties under FEMA 1999. Non-submission of the FLA return within the specified deadline may lead to monetary fines or other punitive measures at the discretion of the RBI.


For Indian businesses involved in Foreign direct investment (FDI) or Overseas Direct Investments (ODI), adhering to the FLA reporting requirement is essential. Companies contribute to the thorough analysis and understanding of India's external economic situation by accurately and promptly submitting the FLA return. To ensure compliance with FLA reporting, it is crucial to stay informed about the most recent notifications, circulars, and guidelines released by the RBI.


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