APR vs FLA return — two filings Indian CFOs confuse, and why they are completely different

Every Indian company with a foreign subsidiary or foreign investors on its cap table faces two annual RBI compliance filings. Both fall under FEMA. Both go to the RBI. Both involve foreign investment data. And both are missed, confused with each other, or — most commonly — filed as if completing one satisfies the other.

They do not. The Annual Performance Report (APR) and the Foreign Liabilities and Assets (FLA) return are two entirely separate compliance requirements, monitored by two different departments within the RBI, filed on different portals, at different times of year, for different regulatory purposes.

This guide explains each filing precisely — what it covers, who must file it, when it is due, what happens if it is missed — and then maps out the specific differences that CFOs and compliance teams must understand before the next deadline arrives.

What the APR Is and What It Does

The Annual Performance Report (APR) is a mandatory annual filing under Rule 23 of the Foreign Exchange Management (Overseas Investment) Rules, 2022. It is filed by Indian entities and resident individuals who have made Overseas Direct Investment (ODI) — meaning they own equity in a foreign Joint Venture (JV) or Wholly Owned Subsidiary (WOS).

The APR's purpose is operational: it reports the performance, financial health, and structural changes of the overseas entity to the RBI. It tells the regulator whether the foreign subsidiary is functioning, whether it is profitable, whether it has made acquisitions or been wound up, and whether all dues receivable from the foreign entity have been repatriated to India on time.

Who files: The Indian entity that made the ODI — the Indian parent company or resident individual investor.

Filed through: The Authorised Dealer (AD) bank, which submits it to the RBI's FIRMS portal using Form ODI Part II.

Deadline: 31 December each year — for the overseas entity's financial year ending on or before the preceding 31 March.

What it contains:

• Financial statements of the overseas entity (audited where the Indian party has control)

• Net profit/loss, net worth, dividends declared and received

• Repatriation of all dues from the foreign entity

• Structural changes — acquisition or winding up of step-down subsidiaries, changes in shareholding

• Certification by a Chartered Accountant that dues have been repatriated as required

Triggered by: ODI — investment in overseas equity (JV or WOS). Companies that have only received FDI (foreign money coming into India) but have no overseas investments do not file the APR.

What the FLA Return Is and What It Does

The Foreign Liabilities and Assets (FLA) return is a separate mandatory annual filing notified under FEMA 1999, through AP (DIR Series) Circular No. 45 dated 15 March 2011, as subsequently updated. It is filed by Indian entities that have either received FDI (foreign liabilities) or made ODI (foreign assets) as of 31 March of the reporting year.

The FLA's purpose is statistical: it reports the stock position of India's cross-border investment — how much foreign capital is deployed in Indian entities, and how much Indian capital is deployed in overseas entities. The RBI uses this data for India's Balance of Payments statistics and the International Investment Position (IIP) — macroeconomic data that is entirely separate from the operational monitoring purpose of the APR.

Who files: Any Indian entity — company, LLP, AIF, partnership firm, or PPP — that has outstanding FDI or ODI on its books as of 31 March of the reporting year. This includes companies that received FDI years ago and have had no new transactions since. The filing obligation persists as long as the foreign investment appears on the balance sheet.

Filed through: The FLAIR portal (Foreign Liabilities and Assets Information Reporting) — a separate web-based RBI portal at flair.rbi.org.in. Not through the AD bank. Not through the FIRMS portal.

Deadline: 15 July each year — for the position as at 31 March of that year. If accounts are not audited by 15 July, provisional figures must be filed by 15 July and revised with audited figures by 30 September.

What it contains:

• Foreign direct investment received (FDI liabilities) — outstanding foreign equity shareholding in the Indian company

• Overseas direct investment made (ODI assets) — outstanding Indian equity in overseas entities

• Foreign borrowings — External Commercial Borrowings, trade credit, NRI deposits

• Other foreign liabilities and assets — trade payables/receivables with foreign parties above specified thresholds

Triggered by: Outstanding FDI or ODI on the balance sheet — regardless of whether any new transaction occurred during the year.

The Complete Difference Table

The Confusion Point: Why CFOs Think Filing One Satisfies the Other

The confusion is understandable for three specific reasons:

1. Both involve the same underlying foreign investment data. An Indian company that owns a US subsidiary has both an APR obligation (reporting the US subsidiary's operational performance) and an FLA obligation (reporting the outstanding ODI position as at 31 March). The data sources overlap — both require the US subsidiary's balance sheet. But the purposes, formats, and regulatory recipients are entirely different.

2. Both are described as "RBI filings under FEMA." True — but the RBI is a large organisation. The APR is monitored by the Foreign Investment Division, which tracks ODI compliance and can block future remittances if APR is not filed. The FLA return is monitored by the Department of Statistics and Information Management, which compiles macroeconomic data. A clean APR record does not mean the FLA department considers your company compliant.

3. Both have penalties for non-filing — but different consequences. Missing the APR has an immediate operational consequence: the AD bank will block future ODI-related remittances (including dividend repatriation from the overseas subsidiary) until prior APRs are compliant. Missing the FLA return triggers penalties and potential compounding — but the immediate operational block on remittances is primarily an APR consequence.

The most common error pattern: An Indian startup that raised a Series A from a foreign VC (FDI received) but has no overseas subsidiary assumes it has no RBI annual filings. It has no APR obligation — correct. But it must file the FLA return every year until the foreign investment exits and is fully repatriated. This mistake is among the most frequent compliance gaps seen in Indian startups preparing for Series B or pre-IPO due diligence.

Penalties: What Happens When Each Is Missed

Missing the APR

• Immediate consequence: AD bank blocks new ODI remittances — the Indian company cannot send fresh capital to its overseas subsidiary, cannot invest in a new overseas entity, and cannot process certain repatriation-related transactions.

• Late Submission Fee (LSF): ₹7,500 per filing per year delayed

• Compounding: For extended non-filing or non-disclosure of material changes (step-down subsidiary formations, transfers), FEMA compounding is required at the RBI Regional Office

• Interest on repatriation defaults: If dues from the overseas entity were not repatriated within 90 days of falling due, additional interest charges under FEMA apply

Missing the FLA Return

• LSF: ₹7,500 per year — same as APR

• Prolonged default: Daily fines (approximately ₹5,000 per day for continuing default) may be levied in serious cases

• Compounding: Required for extended non-filing — formal application to RBI Regional Office with document review and potential hearing

• Audit trail impact: FLA returns are verified against FC-GPR filings and FIRMS data during regulatory inspections. Inconsistencies between FLA returns and other FEMA filings are a common trigger for enhanced scrutiny

The Annual Compliance Calendar: Filing Both Correctly

For Indian companies with both FDI received and overseas subsidiaries (ODI made), both filings are required every year. A clean compliance calendar looks like this:

The FLA return requires the Indian company's own balance sheet as at 31 March — specifically the foreign investment positions on that balance sheet. The APR requires the overseas subsidiary's financial statements — typically audited under the laws of the foreign jurisdiction by a locally licensed auditor (a US CPA for US subsidiaries, a UK ICAEW auditor for UK entities, a Singapore ISCA member for Singapore subsidiaries).

This means the two filings draw from different financial datasets: the FLA from the Indian company's own accounts, the APR from the overseas entity's accounts. They are not interchangeable. Neither substitutes for the other.

How Accorp Partners Manages Both Filings

Accorp Partners is a US CPA and CA (India) firm providing integrated FEMA compliance for Indian companies with foreign subsidiaries and foreign investors — managing both the APR and FLA return as part of a coordinated annual compliance engagement.

Our services include:

• APR preparation and filing — Form ODI Part II, overseas subsidiary financial data compilation, repatriation certification, AD bank submission by December 31

• Overseas subsidiary audit — licensed US CPA audit for US entities, UK ICAEW audit for UK entities, Singapore ISCA audit for Singapore subsidiaries — producing APR-ready audited financials

• FLA return filing — FLAIR portal submission by 15 July (provisional) and 30 September (audited), covering both FDI received and ODI made positions

• Back-year rectification — LSF payments and FEMA compounding applications for prior-year APR or FLA non-filing

• ODI compliance calendar — annual deadline management ensuring both filings a re completed on time, every year

• FC-GPR filing — for fresh FDI inflows into the Indian company

• Foreign investment reporting — complete FEMA annual compliance from FC-GPR through FLA and APR

Also Read: Why Auditor's Certificate for APR Must Be Signed Separately From the Main Audit Report