FLA and APR Filing Processes for Indian Companies with U.S. Subsidiaries

The APR filing process is a mandatory compliance requirement for Indian companies with overseas subsidiaries, including those in the United States. Establishing a foreign entity is a strategic move, but it does not exempt businesses from ongoing regulatory obligations under the Reserve Bank of India (RBI). Both the Foreign Liabilities and Assets (FLA) Return and the Annual Performance Report (APR) must be filed annually.

Why Do Indian Companies with U.S. Subsidiaries Have to File FLA and APR?

When Indian companies engage in global business, the RBI monitors two primary categories:

• Foreign liabilities, such as receiving Foreign Direct Investment (FDI)
• Foreign assets – such as investing in a U.S. subsidiary (ODI)

The APR filing process and the FLA return enable the RBI to track cross-border fund flows and assess the financial health of Indian investments abroad.

What Is the FLA Return?

The FLA Return is an annual report that captures Indian companies’ foreign liabilities and assets. It must be submitted electronically through the RBI’s FLAIR portal.

Who Needs to File the FLA?

You must file the FLA return if your Indian entity:

• Has received FDI
• Has made an Overseas Direct Investment (ODI)
• Held any foreign assets or liabilities as of March 31 of the financial year

Even if there are no new transactions, FLA must still be filed if the investment remains in your financial records as of the reporting date.

Note: First-time ODI filers must also submit the FLA and APR if the foreign investment is reflected in the Indian company’s balance sheet by March 31 of that year.

What Is Required for FLA Filing?

• Shareholding structure (domestic and foreign)
• Financials of both the Indian and foreign entity
• Details of inbound/outbound foreign investments

Note: The return must be filed online via the FLAIR portal. No physical submissions are allowed.

What Is the APR?

The Annual Performance Report (APR) is a yearly compliance filing that updates the RBI on the operational and financial performance of the foreign entity in which the Indian company has invested.

Who Must File the APR?

Any Indian company that has made an ODI, such as investing in a U.S. subsidiary, must submit the APR every year for each foreign entity, even if the subsidiary:

• Had no revenue or business activity
• Is dormant or loss-making
• Is newly incorporated

What Does the APR Include?

• Audited Financials of the foreign company
• Shareholding pattern updates
• Operational status (Active/Dormant/Closed)
• Repatriation, dividends, or restructuring (if applicable)

APR filings are submitted via your Authorised Dealer (AD) Bank.

NIL Reporting for Inactive Subsidiaries

Even if your U.S. subsidiary is dormant or inactive, both FLA and APR filings are still required. In such cases:

• FLA Return: A NIL filing can be submitted directly via the FLAIR portal.
• APR: A NIL APR must still be routed through your AD Bank, even if there are no business activities to report.

Failing to file a NIL return may be considered non-compliance by the RBI and could affect future remittances or raise scrutiny during audits.

Documents to Collect for a Smooth FLA/APR Filing Process

1. Foreign Subsidiary’s Financial Statements

Maintain audited or provisional financials, including the balance sheet, P&L, and cash flow of the foreign entity.

2. Proof of Overseas Investment Transactions

Keep clear records of all fund transfers made to the foreign subsidiary, whether equity, loan, or guarantee. Bank SWIFT messages, remittance advice, and Form A2 copies are essential here.

3. Shareholding and Ownership Structure

Document the ownership pattern of both the Indian company and the foreign subsidiary. Record any changes in shareholding or voting rights during the year for accurate reporting.

4. Business Performance Summary

Prepare a summary of the foreign entity’s business activity, whether active, dormant, or loss-making. Include basic figures like revenue, expenses, and net profit/loss for the APR filing.

5. ODI Filing and RBI Acknowledgements

Save copies of the Form ODI, Unique Identification Number (UIN) allotment, and any correspondence with the RBI or AD Bank. This ensures that your filings remain consistent year after year.

Why the APR Filing Process Still Applies If You Have a U.S. Subsidiary

1. ODI Triggers Compliance

Once funds are sent from India as equity, a loan, or a guarantee, it qualifies as ODI. This activates RBI compliance rules, including FLA and APR filing.

2. U.S. Subsidiary Is a Foreign Asset

Even if it operates independently, your U.S. subsidiary remains a foreign asset on your Indian company’s balance sheet. So, FLA filing is mandatory every year.

3. Majority Ownership Requires Reporting

If your Indian company owns over 51% or holds significant control, you must file both FLA and APR as per RBI guidelines.

How to Stay Compliant with FLA and APR Filing Process

Regardless of your foreign entity’s status, active, dormant, or newly incorporated, these filings remain mandatory

1. Maintain Accurate Investment Records

Keep organized records of every overseas investment and remittance, including:

• Board resolutions
• Fund transfer proofs
• Shareholding structures
• Incorporation and regulatory documents

These documents will be essential during APR and FLA filing.

2. Coordinate with Your Authorised Dealer (AD) Bank

APR filings go through your AD Bank, the same bank that handles your foreign transactions. Stay informed about internal deadlines, as they may be earlier than RBI’s.

3. File FLA Return by July 15

The FLA Return must be submitted online by July 15 each year. Ensure the data reflects the company’s financial position as of March 31 of that year.

4. Work With a Compliance Expert

RBI guidelines evolve regularly. A chartered accountant or compliance advisor with expertise in ODI, FLA, and APR filing process ensures:

• Timely and accurate filings
• Compliance with format and documentation rules
• Communication with AD Bank and RBI (when required)

This is particularly helpful if your company manages multiple subsidiaries in different countries.

Need help with your FLA or APR filing process? [Schedule a free consultation today]

At LedgersCFO, we’ve supported dozens of Indian founders with U.S. subsidiaries in staying fully compliant with RBI regulations. Whether you’re filing a NIL APR or struggling with your FLA submission, we simplify the process so you can focus on growing your global business.

We handle the end-to-end coordination, gathering foreign subsidiary data, matching it with ODI records, preparing submissions, and working directly with your AD Bank. With our team behind you, you’ll never miss a deadline or face avoidable remittance delays. Let us take the compliance burden off your plate.

Disclaimer: RBI regulations, circulars, and ODI guidelines are subject to change. Always refer to the latest RBI Master Directions on ODI or consult your AD Bank or compliance advisor for updated requirements.

FAQ’S

1. Do I need to file FLA and APR if my U.S. subsidiary is inactive?

Yes, both FLA and APR must be filed even if the U.S. subsidiary is inactive. A NIL report is required to confirm that no financial activity occurred.

2. What is the deadline to file the FLA Return?

The FLA is due annually by July 15 via the RBI’s FLAIR portal.

3. Can I submit the APR myself?

No. APR submissions must be routed through your AD Bank; your CA and bank will handle the filings.

4. What are the consequences of missing APR or FLA deadlines?

Non-compliance can result in blocked remittances, RBI notices, and reputational harm with investors or financial institutions.

5. How does LedgersCFO help with FLA and APR filings?

We handle the entire process end-to-end, from gathering financials of your U.S. entity to ensuring the filings match your original Form ODI. We work closely with your AD Bank and coordinate submissions so that you avoid delays and errors.