Online Reporting of Foreign Liabilities & Assets(FLA) to RBI

The annual return on Foreign Liabilities and Assets (FLA) is required to be submitted by all Indian companies which have received FDI (foreign direct investment) and/or made FDI abroad (i.e. overseas investment). It is a compliance requirement to file the FLA report to RBI every year by 15th July. As long as you have all the financial data, the return can be pretty easily filed directly to RBI online via official website.

RBI FLAIR User Registration & Login

RBI calls its reporting website as “FOREIGN LIABILITIES AND ASSETS INFORMATION REPORTING (FLAIR) SYSTEM”. This official FLA reporting website can be accessed at https://flair.rbi.org.in/

Filing RBI FLA Report

Before you start entering the data, keep the following handy:
1. Balance Sheet of both Indian & Foreign Entity
2. Profit/Loss Statement of Indian & Foreign Entity

The date range will be 1st April to 31st March (as per Indian Financial Year). Accounting Software like QuickBooks make it easy to get data as needed, with few clicks.

The reporting is split into 4 sections. You can save draft of each section and validate data before proceeding to next section. The reporting system is built to capture lot of data points across different type of companies. Some of the data points may not be applicable for your case and you will have to enter value as “0” in such cases.

Section I – FLA Reporting

This is pretty easy and straightforward section which collects basic details about your Indian Entity.

Here are some of the key data points:

• Account Closing Year: 31st March of the year you are filing
• Nature of Business: You can select appropriate NIC 2008 code. NIC codes vary based on “NIC year” and it is good that they have made it a selection from dropdown options.
• Whether your company is merged/amalgamated during year: This would be NO for most cases.
• Whether the Company is listed: I guess this would also be NO for most people reading this article!
• Share Details: You need to furnish the face value of Ordinary / Equity Share on closing date of reference period in actual INR
• Identification of the reporting Company (in terms of inward FDI): You can choose from appropriate options. It would be “Others” for most cases.
• Type of the company: You can choose from appropriate options. It would be “Others” for most cases.
• Whether the Company is Asset Management Company: You can select appropriately. It would be “No” for most startups.
• Whether the Company has Technical Foreign collaboration: Again you need to select based on your case. It would be “No” for many cases where it is your own subsidiary.
• Whether the company has any business activity during latest financial year: This would be “YES” for most cases.

That is the end of Section I. It was pretty easy right?
Now you need to first “Save as Draft” and then click “Validate Section I/Proceed to Section II“.

Section II – FLA Reporting

Section II of the reporting is all about financials of Indian Entity. You need to enter data for current year and the previous year. If you have a new entity and filing for the first year, just enter “0” for previous year data. If you have filed earlier, please keep copy of previous year filing data – so that it will match to what was entered in previous year.

Here are the key data points that needs to be filled:

• Total Paid-up Capital of Indian Company
• Non-Resident Holdings: You can enter “0” wherever its not applicable for you.
• Profit and Loss Account (from P/L Account of Indian Company): Amount to be entered in INR lakh, for example for 1 crore you have to enter 100 (lakhs).
  • Profit (+) / Loss (-) before tax
  • Profit (+) / Loss (-) after tax
  • Dividend(Interim and Final Dividend)
  • Tax on Dividend (if any)
• Reserves & Surplus (from Balance Sheet of Indian Company)
  • Reserves and Surplus
    • Of which, Profit(+) and Loss(-)account balance
• Sales and Purchase made by Indian Company during the financial year: Your book keepers should have already been accounting Domestic & Export Sales separately. If not, you have to first fix your books.
  • Domestic Sales
  • Exports
  • Domestic Purchases
  • Imports
• Employee Information of reporting Indian company: Number of actual employees who are on payroll(for whom you deduct TDS as employees). You need not enter contractors numbers here. Founders salary is also considered as employee salary.

Thats it!
Now you need to re-verify the data, first click “Save as Draft” and then click “Validate Section II/Proceed to Section III“.

Section III – Foreign Liabilities
(Investment made in India)

Section III is applicable only if your company has received investments from foreign entities. If you have not received foreign investments and just have foreign subsidiary you will have to enter “0” as value at most places.

Here are some of the key data points that needs to be filled:

• Investment in India under Foreign Direct Investment (FDI) scheme (10% or more Equity Participation)
  • No. of foreign direct investors during the year (10% or more Equity participation). Enter “0” if you don’t have any.
  • Month and Year of receiving FDI first time (only if you have entered more than 0 earlier)
• Investment in India under Foreign Direct Investment (FDI) scheme (Less than 10% Equity Holding). Enter “0” if you don’t have any.
• Portfolio Investment in India: You need to enter the outstanding investments by non-resident investors, other than those made under Foreign Direct Investment Scheme in India (i.e. other than those reported in 1.b FDI & 2.b DI). You can enter “0” if it is not applicable for you.
• Other Investment (Outstanding Liabilities with Foreign Unrelated Parties). Provide data if you have other liabilities like Trade Credit, Loans, Other receivable and payable accounts. If you don’t have those liabilities you can enter “0”.

That’s the end of Section III. Now you need to first “Save as Draft” and then click “Validate Section III/Proceed to Section IV“.

Section IV – Foreign Assets

This is the last and most important section if you have a foreign subsidiary or made investment outside India.

In the beginning you need provide details of Equity Capital (PUC), Reserves & Surplus of Direct Investment Enterprise (DIE) Abroad (10% or more equity holding by Indian reporting company).

• No. of Direct Investment Enterprises (DIE) Abroad as on end-March: Enter as 1 or other number as appropriate
• Month and Year ODI made first time by your company: Enter the month and year as per the “Successful addition of new Indian Party” email you would have received on submitting the ODI via AD Bank.

Next you need to enter the ODI detail of entity. The UX is a bit complicated here, you need to basically click “Add” button(Save/Add ODI as per screenshot below) and also use “Save” button later.

Here are the key data points about your foreign entity that needs to be filled:

• Reported Foreign currency. Select appropriately, USD for example.
• Total Equity of DIE (Paid Up Capital of DIE)
• Equity of DIE held by you (at face value)
• Reserves and Surplus
  • Of which, Profit (+) and Loss (-) account balance
• Exchange rate in Rs per unit foreign currency: You need to enter the exchange rate as at end-March. You can get the reference rate data from FBIL (Financial Benchmarks India Limited)
• Total Sales
  • Of which Exports: Please note that this export from the foreign entity. If your entity is US based, all sales within US would be considered as domestic sales and all sales outside US would be considered as export for that entity. It’s easier if you account this separately from the start.
• Total Purchases
  • Of which Imports
• No. of Employees on Payroll: Many SaaS startups might just have a subsidiary without actually having an employee on Payroll. In such cases I suggest entering at-least “1”, considering the founder as an employee(.
• Type of Capital: Enter “0” wherever it is not applicable.
  • Equity Capital (Auto Calculated based on sub fields data)
    • Claims on Direct Investment Enterprise
    • Liabilities to Direct Investment Enterprise (Reverse investment)
  • Other Capital (Auto Calculated based on sub fields data)
    • Claims on Direct Investment Enterprise
    • Liabilities to Direct Investment Enterprise (Reverse investment)
  • Disinvestments abroad during the year

You need to save this by clicking on the “Save” button which is applicable for saving on this part of data(save draft is for full section).

Further you need to enter details of investments made by the foreign entity:

• DI – Direct Investment Abroad (Less than 10% equity holding)
  • No. of Countries where your company holds less than 10 % equity shares in each under the ODI Scheme (enter 0 if its not applicable)
• Portfolio Investments abroad
  • No of countries in which your company has made Portfolio investment
• Other Investment (Outstanding Claims on Foreign Unrelated Parties)
  • Provide data if you have other liabilities like Trade Credit, Loans, Other receivable and payable accounts. If you don’t have those liabilities you can enter “0”.

That’s all!
You are now done with all the data entry part. Now you need to “Save as Draft” and then click “Validate Section IV/Proceed to Section V“.

Section V is nothing but a variation report with comparison to previous year. You can just check the data you entered and confirm.

RBI FLA Support

Surprisingly RBI has a great support team to answer your queries.

You can email surveyfla@rbi.org.in and they will revert back to you. 2020 filing was not open even at starting of July 2020 and I mailed them for the first time. They reverted back to me stating filing date has been extended and even sent a follow up mail after they opened up filing option.

Again I wrote to them when the FLAIR website was down for several weeks and deadline was approaching. They reverted back to me and said it will be extended further.

You can also reach them on FLA help desk phone numbers : 022-26578214 / 348 / 022-2657 2695 / 9773059283 / 8082669140 / 9702985902

RBI FLA FAQ

Note: I’m not a lawyer/accountant and this content is written based on my experience of filing the RBI FLA returns. This should not be considered as legal/financial advice.

If you have more questions please ask them in the comments below.