Foreign Assets & Liability Return: In the era of 20th century, investment portfolio of a business entities has become more global. Now a days making Overseas Direct Investment / accepting foreign direct investment is common for the business entity. In order to monitor and regulate these kind of investment phenomena, Reserve Bank of India has notified different reporting requirements for a business entity. FLA/FLAIR filing are one out of the several reporting requirement of Reserve Bank India.
Applicability of FLA/FLAIR
- As per FEMA Regulations, every company who have received foreign direct investment or made overseas direct investment are liable to report the status of such investment in form FLA for current year as well as previous year.
- For the purpose of filing FLA, outstanding balance of FDI/ODI to be reviewed every year (31st March). If outstanding balance of FDI /ODI is nil as on 31st March then companies are not required to file FLA.
- The due date of filing of FLA is 15th July every year.
- .Non-filing of FLA before due date will be treated as violation of FEMA Regulation.
- Reserve Bank of India may impose penalty on such companies who have failed to file FLA before due date.
The different scenario for applicability of FLA filings:
- Where there is No Outstanding Investment as on 31st March then FLA filing requirement is Zero.
- Where there is No FDI Received during the year but old outstanding as on 31st March 2019 then FLA filing needs to be done.
- Where there is Share application money received against FDI but allotment is pending then there is no requirement for FLA filing.
- Where there is Registered Partnership Firm having ODI then FLA filing needs to be done.( (dummy CIN to be obtained)
How ASC can help?
- Consult clients on Automatic & Approval Route of FDI for different sectors.
- Taking approvals for clients from Reserve Bank of Indian
- Assistance to clients in RBI & FEMA Compliance