Foreign Liabilities and Assets Information Reporting (FLAIR) – FAQ – 2



Eligible Companies / Entities to Submit the FLA Return

Q 1. Which entities are required to submit the FLA Return?

Ans: The annual return on Foreign Liabilities and Assets (FLA) is required to be submitted by the following entities which have received FDI (foreign direct investment) and/or made FDI abroad (i.e. overseas investment) in the previous year(s) including the current year i.e. who holds foreign assets or/and liabilities in their balance sheets;

·         A Company within the meaning of section 1(4) of the Companies Act, 2013.  
·         A Limited Liability Partnership (LLP) registered under the Limited Liability Partnership Act, 2008

Q.2 How does the company report data and submit the FLA return to the RBI? 

Ans: All the steps, one by one for online web-based reporting of annual return on FLA, are provided in user manuals. Entity should read 
(a)       User manual on “FLA User Registration Form” and
(b)       User manual on reporting of “Annual Return on FLA” for all sections for step by step procedure for filling the FLA return.

FAQs Related to “FLA User Registration Form”

Q 3. Where can company / LLP / Others get the format of Annual Return on Foreign Liabilities and Assets (FLA Return)?

Ans: The format is available on https://flair.rbi.org.in However, the format and email-based reporting system has been replaced by the web-based formats for submission of annual FLA return from June 2019 (i.e., reporting from the 2018-19 round of FLA). In this web-based reporting system of FLA, entities first need to create business-user through “Entity-User Registration form”.

Q 4. What is the system requirement at entity’s side for filling the FLA Return through web-based online portal?

Ans: One needs to have access to the URL https://flair.rbi.org.in, any of internet explorer, google chrome, firefox etc. would support this application.

Q 5. How should the company register itself in the system?
Ans: First, go to Uniform Resource Locator (URL) of the application, that is https://flair.rbi.org.in. Then click on “Registration Form for New Entity User”.

Q 6. Where would I receive login credentials for entity-user?

Ans: Login credentials would be received on the registered email-id. (the email-id which the user has provided in FLA Registration Form under authorized person’s details)

Q 7. I have registered as an entity-user but not yet received password to log-in the system.

Ans: Please check your email inbox and check junk mail folder.

Q 8. What should I do If registration login page/ FLA online form will be hang and couldn’t enter the details?
Ans: If you do not enter any information for 15 minutes, it will hang your session. Refresh the
page. If a message tells you that your session has timed out, simply log in again to continue.

Q 9. What if I do not receive my OTP / OTP gets delayed while filing the FLA form?
Ans: Wait for sometimes or retry for OTP.
Q 10. I entered the wrong password several (5) times and now I cannot login the FLA webpage, what should I do?
Ans: Click ‘Forgot Password’ Menu. Enter the details i.e. user name, registered email ID, valid captcha code. Password will be generated and same will be forwarded to the registered email ID. User should change the default password. If user is unable to reset password, then he/she can mail to RBI.
Q 11. If current user left the company, what should I do for deactivate the user?
Ans: Company needs to mail to RBI (surveyfla@rbi.org.in) for deactivating the user and again register the new user.




FAQs related to Verification letter and Authority letter are already explained in User manual for “FLA User Registration Form”.

FAQs Related to Section I
Q 12. I am not able to furnish information in Identification Details “Name of the Indian Company”,  “PAN Number”, “CIN Number” and “Email (Head of institution)”?

Ans: In Section – I, above fields (item 1, 2 and 3) get automatically filled, once entity user created successfully. You need not enter those fields (as those items are already filled in “User Registration Form”)

Q 13. Where can we find the detailed description of NIC-2008 code (item-6)?

Ans: In the FLA Return, industry codes are given as per the National Industrial Classification (NIC) -2008 codes. The details on NIC-2008 codes can be accessed through the following link, https://udyogaadhaar.gov.in/UA/Document/nic_2008_17apr09.pdf.

Q 14. If an entity has more than one activity during the year, then which NIC code should be reported by company (item-6)?

Ans: Entity can select that activity, from which, they have earned major revenue.

Q 15. If an entity has only Outward Investment and no inward FDI, then what should we select in Identification of the reporting company (in terms of inward investment) under Section I (Item 9)?

Ans: Option ‘Others’ can be selected in respect of Identification of the reporting company under Section I.

Q 16. What is the meaning of Technical Foreign Collaboration (item-11)?

Ans: Indian company which has entered into an agreement with a foreign entity in terms of technology transfer, know-how transfer, use of patent, brand name etc, then such type of agreements are treated as Foreign Technical Collaboration (FTC). If Indian reporting company has such type of FTC during the reporting period, then they should select ‘Yes’ against the item 11 under Section I of the FLA return.










FAQs Related to Section II


Q 17. Whether, in Section II- Item 2.3, the Non-Resident Equity and participating Preference Shares Capital holding (%) is being calculated with respect to Item 1.0 (Total Paid-up capital) or Item 1.1 (Total Equity and participating Preference Shares Capital)?

Ans: Since Non-Participating share capital is a type of debt investment and is part of Item 1.0, Non-Resident Equity and participating Preference Shares Capital holding (%) is calculated with respect to item 1.1 (of Section II) and not 1.0.

Q 18 In the Section II Block 2 of FLA form, what should I take for convertible preference share?
Ans.: Fully diluted preference share

Q 19. Where should we report the premium on issue of Equity Share Capital?

Ans: Premium on issue of Equity Share Capital is a part of Reserve, which should be reported under the item 4.1 of 1C- Reserves and Surplus, (in Section II).

Q 20. What should we include in 5. Sales and Purchase (in Section II)?

Ans: In these fields, you are required to provide the information relating to all purchases (including capital and revenue of goods and services)/ sales made domestically as well as foreign during the reference period (April - March).
The detailed information to be furnished in 5. Sales and Purchase are as follows:
a. All expenses/sales shown in profit and loss account to be taken as total purchases/total sale.
b. Both goods and services are to be included.
c. All foreign purchases/ sales i.e. imports and exports, should be captured from P& L Account.

FAQs Related to Section III

Q 21. What is meant by “Month and Year of receiving FDI first time in our Company/LLP/Others”?

Ans: Entities are required to provide the month and year of receiving FDI first time irrespective of number of investors reported.

Q 22. What is “Edit / View / Delete FDI” details in section III, item no. 1.b FDI and 2.b DI?

Ans: While filing section III, in 1.b / 2.b, non-resident investor details / non-resident investor countries’ details will be displayed as pre-filled (for the companies which have reported FLA-2018) and by clicking on Edit/Delete button companies will be able to modify the non-resident investor details (companies will be able to choose to add new investor/ delete existing investors).  For new companies (which has not reported FLA-2018), those details related to non-resident investors has to be entered by company.


Q 23. In Section III Block 1 of FLA form, which will be the date of first receipt of FDI received?
Ans: Take Settlement date/allotment date

Q 24. What is meant by “Disinvestments in India during the year” / “Disinvestments abroad during the year”?

Ans: Any disinvestments made by non-resident direct investor of the reporting Indian company during the year should be reported in section III item 3.0 (all blocks). Likewise, any disinvestment made by the reporting Indian company in its DIE abroad during the year should be reported in section IV item 3.0 (all blocks).

Q 25. Where should we report the non-participating preference share issued to non-resident?

Ans: Non-participating preference shares are treated as debt securities. (a) If the Non-participating preference shares are held by foreign investor who is also holding equity shares of Indian reporting company, then Non-participating preference share should be reported at item 2.1 of 1.b FDI and 2.b DI in Section III (depending upon the % equity & participating preference share held by foreign investor) at nominal value.

Q 26. Where should we report Fully/Partially/Non-convertible debentures issued to the non-residents in FLA Return?

Ans: Fully/Partially/Non-convertible debentures are treated as debt securities. (a) If the debentures (of any type) are held by foreign investor, the amount should be reported at item 2.1 of 1.b FDI and 2.b DI in Section III (depending upon the % equity plus participating preference share held by foreign investor) at nominal value.

Q 27. What treatment should be given to share application money received from non-resident investor?

Ans: If the share application money is received from the existing non-resident shareholder, then the outstanding share application money should be reported at item 2.1 of 1.b FDI and 2.b DI in Section III, depending upon per cent of equity plus participating preference share holding by non-resident investor.

Q 28. On validating section III of the FLA Return we are getting the error message regarding mismatch of non-resident equity and participating preference share holding (%) between Section III and Section II. How should we resolve the error??

Ans: Non-resident equity holding per cent (%) is calculated for current year at item 2.3 under Section II. Ensure that the sum of Non-resident equity holding per cent (%) reported under 1.b FDI, 2.b DI and 3 (for current year) of Section III must be equal to value given at item 2.3 (for current year) of Section II.

Q 29. What constitute in the Equity Securities under portfolio Investment (3. of Section III)?

Ans: Please furnish here the outstanding equity investments (secondary / stock market investment) 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 and 2.b DI of section III).

Q 30. What constitute in the Debt Securities under portfolio Investment?

Ans: Following items are included in Debt Securities:
(a) Money Market Instruments and Bonds & Other instruments are invested by non-resident investors, (other than those are reported in 1.b FDI and 2.b DI of section III)
(b) Non-participating preference shares and debentures are held by foreign investor who is not holding equity share, then the same should be reported at item 2.2 of 3. In section III (Bonds & Notes) at nominal value.

Q 31 In case of 4. Other Investment (section III), it is written that outstanding liabilities with foreign unrelated parties to be given. Please clarify what transactions are to be reported under the same?

Ans: All financial outstanding liabilities (Trade Credit, Loans, Currency & Deposits, and other receivable & payable accounts) with foreign unrelated Parties should be reported here. Any domestic liabilities (even if it is in foreign currency) should not be reported in the FLA return.
Further, if the share application money is received from foreign investor who does not hold equity shares of Indian reporting company as on reference date, then outstanding share application money should be disclosed under this point 4. Other Investment in Other receivable and payable accounts.

Q 32: Will EEFC account with Bank come under 4. Other Investment of section III (Currency and Deposits)?

Ans: EEFC account with Bank is not creating any external Assets and Liabilities. Therefore, it will not come under this field.

Q 33. Whether, any assets or liabilities for Indian party (i.e. domestic assets and liabilities) are to be included in the FLA Return?

Ans:  Any domestic liabilities or assets (even if it is in foreign currency) should not be reported in the FLA return.

FAQs Related to Section IV



Q 34. What exactly is the meaning of 1.b ODI in Section IV under Foreign assets?

Ans: 1.b ODI of Section IV on foreign assets captures the information on financial details of Overseas Company in which your company’s equity holding is 10 per cent or more.

Q 35. If the overseas subsidiaries/ joint venture company’s accounting period is different from the reference/reporting period (i.e. April-March) in the Return, then what information should we furnished in Section IV?

Ans: Companies are required to furnish the information on outstanding external liabilities and assets as on end-March of previous and latest year. In case if the accounting period of overseas subsidiaries/ joint venture of Indian reporting company is different from the reference period, then the information for end-March should be given on internal assessment basis.

Q 36. What is “Edit / View / Delete ODI” details in section IV, item no. 1.b ODI and 2.b DI?

Ans: While filing section IV, in 1.b / 2.b, DIE details / DIE countries’ details will be displayed as pre-filled (for the companies which have reported FLA-2018) and by clicking on Edit/Delete button companies will be able to modify the DIE details (companies will be able to choose to add new DIE/ delete existing investors).  For new companies (which has not reported FLA-2018), those details related to DIE has to be entered by company.

Q 37. What information should we report in item 3.7, item 3.7.1, item 3.8, item 3.8.1 in section IV?

Ans: You are required to provide here, the information of Direct Investment Enterprises (DIE) abroad relating to all purchases (including capital and revenue of goods and services)/ sales made domestically as well as foreign during the reference period (April - March).

The detail information to be furnished in item 3.7, item 3.7.1, item 3.8 and item 3.8.1 is as given below:
a. All expenses/sales of DIE abroad shown in profit and loss account to be taken as total purchases/total sale.
b. Both goods and services of DIE abroad are to be included.
c. All foreign purchases/ sales of DIE abroad i.e. imports and exports, should be captured from P& L Account

Q 38. In case where overseas company (DIE) is unlisted, how can we calculate the market value of overseas equity investment using OFBV method under 1.b ODI of Section IV?

Ans: For valuation of overseas equity investment OFBV Method should be used, as explained below:
OFBV Method:
Market value of equity capital held by you at OFBV for unlisted companies
= (Net worth of the DIE) * (% of equity held by you) Where,
Net worth of the DIE = Paid up Equity & Participating Preference share capital of company +Reserves & Surplus - Accumulated losses (which is automatically calculated in item 3.5 in 1.b ODI).
As per 1.b ODI of section IV the formula is given below:
Item 1.1 Claims on Direct Investment Enterprise = (Item 3.3/ Item 3.2) * (Item 3.5* Item 3.6) /100000 for reference period Where, Item 3.2, Item 3.3, Item 3.5 and Item 3.6 are extracted from 1.b ODI.

Q 39. How will we do the valuation of the equity capital for listed DIE?

Ans: If the overseas company is listed then closing share price as on reference period, i.e. end-March of previous and latest year should be used for valuation of equity investment.


Q 40. What constitute in the Equity Securities under 3. Portfolio Investment Abroad in section IV?

Ans: Please furnish here the outstanding equity investments (foreign stock market investment) by reporting company, other than those made under Foreign Direct Investment Abroad (i.e. other than those reported in 1.b ODI and 2.b DI of section IV).

Q 41. What constitute in the Debt Securities under Portfolio Investment Abroad, section IV?

Ans: Money Market Instruments and Bonds & Other instruments are invested by reporting company (other than those reported in 1.b ODI and 2.b DI of section IV) are included in the Debt Securities under Portfolio Investment Abroad.

Q 42. In case of 4. Other Investments (section IV), it is written that outstanding claims on foreign unrelated parties to be given. Please clarify what transactions are to be reported under the same?

Ans: All financial outstanding assets (Trade Credit, Loans, Currency & Deposits, and other receivable & payable accounts) with foreign unrelated Parties should be reported here. Any domestic assets should not be reported here.


Q 43. How would an acknowledgement be provided to us on submission of the form?

Ans: You will receive the system-generated acknowledgement of FLA data submitted by you at the time of final submission itself. No separate mail will be sent in this regard.



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