The changing trend of growth in India is the major reason of increasing foreign capital. Earlier stock market was the sole route for investing capital in India. However, today venture capitalist seems more interested in investing directly in companies which are not listed on the stock exchanges.    In today’s competitive environment, every entity be it big or small are rushing to go international to win market share, maximize profitability and to be among the best. Relaxation in regulatory regimes has boosted the free flow of capital across the country. Greater connectivity among nations escalates the trust in Indian entities. The flow of investment is not restricted to one way. It is now being converted to two way process. It is not just that there is inflow of foreign investment, now; startups are also making huge investment in foreign assets. Every startup and other companies in India are trying to get establish and make their own identical identity. To fulfill the aspiration of being at the top, they just concentrate on smooth running of business and ignore many things which are equally important. In this rush, what they lack behind is the compliances which are to be mandatorily complied. Calendar is marked with all the due dates and forms to be filed. Even after so much awareness regarding compliances, there are still many shortfalls. Today almost every company ends up paying additional fees and penalty to government due to overlook of few compliances. In this ignorance, the major is Annual Return on Foreign Liabilities and Assets. Ample companies today miss out this Annual Return due to unawareness. According to the provisions of Foreign Exchange Management Act, 1999 [FEMA] an Annual return on Foreign Liabilities and Assets [FLA] is required to be submitted. Applicability:

• India resident companies and
• Received Foreign Direct Investment [FDI] and/ or made overseas investment in any of the previous year(s), including current year i.e. who holds foreign assets or liabilities in their financial statements as on 31 March or,
• Partnership firms, Branches or Trustees have any outward FDI outstanding as on end-March of the reporting year.

Note: The eligible Partnership firms, Branches or Trustees shall request dummy CIN number through mail which will enable them to file the Excel based FLA Return. In regard to Foreign Investment, following shall be noticed:

• FLA Return and Annual Performance Report (APR) for ODI are two different returns thus, both shall be filed by the company, if applicable.
• If all non-resident shareholders of a company has transferred their shares to the residents during the reporting period and the company does not have any outstanding investment in respect of inward and outward FDI as on end-March of reporting year, then no need to submit the FLA Return.
• Shares issued by reporting company to non-resident on Non-Repatriable basis should not be considered as foreign investment.
• If company received only share application money and does not have any foreign direct investment or overseas direct investment outstanding as on 31st March of the reporting year, then no requirement to submit FLA Return.
• If company has outstanding FDI and/or ODI, then submit FLA Return.

Time Limit: File Annual Return on Foreign Liabilities and Assets (‘FLA Return’) on or before 15 July every year. The FLA Return needs to download excel based utility from the RBI website. After filling in the requisite details, the Indian Company can file the FLA Return by e-mailing the same to the RBI at fla@rbi.org.in. If the company’s accounts are not audited before July 15, then the FLA Return shall be submitted based on unaudited (provisional) accounts. Once the accounts gets audited and there are revisions from the provisional information submitted by the company, they are supposed to submit the revised FLA return based on audited accounts by end – September. The Annual Return though not complicated and easy to file is being missed out by the startups. Liability to file FAL Return arises if there is any FDI or made overseas investment in the Balance Sheet. Startups be alert the due date of filing FLA Annual Return is 15th July. Only few days left… countdown has begun. To avoid last minute rush and clash with due date of TDS Return; file the Annual Return on immediate basis. To remain hassle free, visit us at business maintenance ___________________________________________________________________