Annual return on Foreign Liabilities and Assets (hereinafter referred to as the ‘FLA’) is required to be submitted on or before July 15 every year by such companies which have received Foreign Direct Investment (hereinafter referred to as ‘FDI’) and/or made investments overseas in any of the previous years, including the current year.
To comply with the regulations under the Foreign Exchange Management Act, 1999 (hereinafter referred to as ‘FEMA’) is a major responsibility of the company’s operations as more and more companies have involved themselves in investing overseas in the modern day. One of the compliances under the FEMA is the submission of FLA annual return. This return is required to be filed by the companies which have invested in foreign companies or which have accepted FDI either as fully owned subsidiaries or joint ventures. Such investments are covered under the umbrella of Overseas Direct Investment (hereinafter referred to as ‘ODI’).
Such companies are required to cover all the foreign investments made by it and/or to its capital in the FLA annual return and are required to submit the same with the Reserve Bank of India (hereinafter referred to as the ‘RBI’).
Such companies shall report the foreign assets and liabilities pertaining to the current financial year and also the assets and liabilities of the previous years from when the relevant investments were made. On the other hand, the companies which do not have any foreign assets or liabilities pertaining to the current financial year however have an outstanding FDI or ODI from the previous years (from the date when the relevant investment was made), are required to file the FLA annual return indicating such outstanding assets or liabilities.
Under the FEMA regulations, partnership firms are also required to file the FLA annual return in case they have received FDI(s) or made ODI(s). Further, the RBI issues a dummy Corporate Identification Number (hereinafter referred to as ‘CIN’) for partnership firms upon receipt of request which shall only be used for filing the FLA annual return.