FLA Return filing 101

Introduction

As businesses increasingly engage in global operations, compliance with the Foreign Exchange Management Act (FEMA) regulations has become crucial. One such compliance requirement is the annual filing of the Foreign Liabilities and Assets (FLA) return.

Who Needs to File the FLA Annual Return?

The FEMA regulations mandate that any company or partnership firms/LLP that has either made Overseas Direct Investment (ODI) or received Foreign Direct Investment (FDI) must file the FLA annual return. This requirement also applies to companies that have outstanding FDI or ODI from previous years, even if they do not have any foreign assets or liabilities for the current year.

Note: CIN is needed for filing FLA Return. The RBI issues dummy CINs (upon request) for LLPs and Partnership firms for the purpose of filing FLA return.?

Filing Process and Deadlines

1. The FLA annual return must be filed by July 15th of each year through an Excel sheet. The return should include data on FDI or ODI received or made by the company/firm for any previous year(s) and the current year.?
2. The form must be emailed by an authorized member of the? company/firm, such as the Company Secretary, Chief Financial Officer, or Director, from their official email ID to the RBI's email address The details filed should include financial information and other required details in accordance with thecompany/firm's audited accounts.?
3. If the? company/firm's accounts are not audited before July 15th, the FLA return can be filed based on unaudited accounts. However, if there are any changes after the audit, an updated form must be filed before the end of September of the same year.?

Penalties and Exemptions

Companies/Firms that fail to file the FLA return within the given time are liable to pay a penalty of thrice the sum involved in the contravention. If the contravention is not quantifiable, a penalty of Rs. 2,00,000 will be imposed. If the contravention is continuing, a penalty of Rs. 5,000 per day will be charged.?

Conclusion

It is crucial for businesses involved in foreign investments to stay informed about the latest developments and seek professional guidance when necessary. By reaching out to professionals, such as out experts at LegalWiz.in, entrepreneurs can take a breathe a sigh of relief and be sure that their compliances are taken care of.?