FLA Return Filing for Indian Companies with Foreign Investments

If you are running an Indian company that has received foreign investment or owns foreign property, you will likely come across the term FLA Return. Although it may seem technical at first, understanding and filing Foreign Liabilities and Assets (FLA) returns is crucial to comply with the rules of the Reserve Bank of India (RBI). This blog is your go-to guide for whatever you want to know about the FLA in 2025. 

What is an FLA Return?

An FLA Return is a yearly report that Indian companies need to submit to the Reserve Bank of India (RBI) if they’ve received money from foreign investors or if they’ve invested in businesses or assets outside India during the year.

In simple terms, it includes two things:

• Foreign liabilities – money your company has taken from people or companies outside India and needs to return
• Foreign assets – money your company has invested in businesses, property, or shares abroad

The RBI uses this information to understand how much money is coming into and going out of the country and how Indian companies are financially connected with the rest of the world.

Who Needs to File the FLA Return in 2025?

You are required to file the FLA return 2025 if your company:

• Has received FDI (Foreign Direct Investment) 

         Example: A foreign investor puts money into your business in India.

• Has invested in foreign subsidiaries, joint ventures, or other assets abroad (like shares or property)

This applies to:

• Companies registered in India under the Companies Act
• LLPs that have received FDI or invested abroad
• Startups that have foreign investments

What If There’s No Activity This Year?

Even if there was no change in your foreign investments or liabilities this year, you still need to file the FLA return.

For example:
If your company received foreign funding two years ago but didn’t receive or send any money abroad this year, you still have to file the return and update the RBI.

FLA Compliance in India: Why It Really Matters

Filing the FLA return is important for every business with foreign investments. It helps you follow the law, build trust with investors, and stay clear with government rules.

It is a Legal Requirement

The Reserve Bank of India requires this under FEMA rules. Not filing on time can lead to strict penalties or legal trouble for your company.

It Maintains a Clean Business Record

Timely filing shows your company follows government rules. This helps avoid future delays in approvals, licenses, or financial matters.

It Builds Investor Confidence

Investors prefer companies that are transparent and compliant. FLA filing shows you are serious, trustworthy, and responsible with foreign funds.

Key Dates and Deadlines for FLA Filing 2025

The last date for submission of the FLA return for the FY 2024-25 is usually 15th July 2025. That gives businesses about three and a half months to collect and prepare the data that would need to be submitted.

But it’s better not to wait until the last minute. Delays could cause non-compliance if you have to collect financial information from overseas companies or branches.

What Information Do You Need to File?

To file your FLA return with the RBI, your company must collect the following key details:

Basic company details

You need to provide your company’s name, Corporate Identification Number (CIN), PAN, and contact information like address, phone number, and email.

Foreign direct investment (FDI) information

This includes details about any foreign money your company received during the financial year, such as the amount, the investor’s country, and changes in ownership or equity share.

Overseas investment details

Mention any investments your company made outside India, such as foreign subsidiaries, joint ventures, or shareholdings.

Financial information of foreign entities

For each foreign company you’ve invested in, you must report their key financials. This includes total assets, total liabilities, income, and profit or loss for the year.

These numbers should be based on your company’s audited financial statements. However, if the audit is not completed by the time of filing, you can give your best estimates for now and update the return later once the final audited data is available.

How to File the FLA Return: Step-by-Step Process

Filing the foreign liabilities assets return is done entirely online. Here’s a simplified step-by-step guide:

Step 1:  Register on the FLAIR Portal

If it’s your first time, your company must register on the FLAIR system (Foreign Liabilities and Assets Information Reporting System). Use your corporate email ID to register.

Step 2: Fill in the Details

Enter the required company details, FDI information, and data on foreign assets and liabilities. Make sure the information is accurate and consistent with your financial statements.

Step 3: File the Form

Once your form is complete, file it through the FLAIR portal. You’ll receive an acknowledgment email upon successful submission.

Step 4: Wait for Confirmation

The RBI may request clarifications or ask for a revised form if there are discrepancies. So, keep an eye on your registered email.

Common Mistakes to Avoid

If you’re filing the FLA return for the first time, it’s important to avoid these common errors:

Not mentioning if the data is estimated

If you use estimates instead of audited numbers, always mention that clearly in the return. It helps avoid confusion or rejection later.

Forgetting about inactive foreign subsidiaries

Even if a foreign subsidiary didn’t have any activity during the year, you still need to report it in the return.

Waiting too long to register on the FLAIR portal

Registering early on the RBI’s FLAIR portal saves you from last-minute technical issues or delays in access.

What Happens If You Don’t File the FLA Return?

Non-compliance can lead to serious consequences. The RBI can impose penalties under FEMA, which could include:

• Monetary fines
• Legal notices
• Restrictions on further foreign investments

Also, non-filing may impact your company’s reputation in the eyes of foreign investors and banks.

Tips to Make FLA Filing Easier in 2025

Here are a few ways to stay ahead:

• Maintain up-to-date financial records related to foreign transactions.
• Consult a financial or compliance expert if you’re unsure about any data.
• Start early to avoid deadline rushes.
• Bookmark the FLAIR portal and stay updated with RBI circulars.

Need help with your FLA Return? [Schedule a free consultation today.]

At LedgersCFO, we understand that filing the FLA return with the RBI can be a bit confusing, especially if your company has received foreign investment or holds assets abroad. Many business owners are unsure about what details to include or how to fill out the form correctly.

That’s why our team is here to support you. We’ll help you collect the right information, prepare the return properly, and make sure everything is submitted within the deadline.

While you focus on running your business, we’ll take care of the FLA filing with complete accuracy and care.

FAQ

1. What is the FLA return used for?

The FLA return helps the Reserve Bank of India understand how much Indian companies owe to or own in foreign countries. This information supports economic planning and policymaking.

2. Is FLA filing mandatory for all companies with FDI?

Yes, it is mandatory. If your company has received any foreign direct investment or holds foreign assets, you are required to file the FLA return.

3. Can I file the FLA return with estimated financial data?

Yes, you can file the return using estimates if your audited financials are not ready. Once the audit is completed, you should revise the return with actual data.

4. What is the deadline for the FLA return in 2025?

The deadline to file the FLA return for the financial year ending 31st March 2025 is 15th July 2025.

5. How does LedgersCFO help with FLA return filing?

At LedgersCFO, we assist you with every step of the FLA filing process. From gathering the right financial details to preparing and submitting the return through the RBI’s FLAIR portal, our experts ensure everything is accurate and compliant. Whether you’re filing with audited numbers or estimates, we handle the work so you can stay focused on running your business.