Query regarding RBI FLA return

[Mohit Khanna]

Dear Members,

Please reply on below mentioned query regarding RBI FLA return:

A private limited company which is a subsidiary of foreign company was incorporated on 23.03.2023.

On 31.03.2023, its 1st financial statements were not closed and also share capital money is yet to be received from foreign company shareholder.

Now, please reply that in above case does the said private company is required to file RBI FLA return for 31.03.2023 or it shall require to file its FLA return for 31.03.2024.

Request you to reply at the earliest.

Thanks & Regards

CS Mohit Khanna

[Ashutosh Shukla]

Hi,

Based on the General Instructions issued by the RBI in relation to the Foreign Liabilities and Assets (FLA) under FEMA 1999, which is available at
https://www.rbi.org.in/Scripts/FAQView.aspx?Id=95, I believe that you are not required to file it for the year ended 31.03.2023. Please check questions 4, 9, 10, and 11 of the general instructions. Based on what you have stated, I believe that you shall not have any FDI outstanding as of 31.03.2023. Basically, the term "outstanding FDI" means the value of the foreign direct investment that has been made and is in effect at a given point in time (has not been withdrawn). The general concept of outstanding shares is also roughly the same. They indicate the shares that have been issued and are held by the shareholder. However, please note that this is my own interpretation and it may vary from the opinion of the other members. 

Thanks and Regards,

CS Ashutosh Shukla

For information purposes only. You may not rely on the statements made hereinabove. 

[CS A Rengarajan]

I fully agree with your views as long as Foreign direct investment is not received by the company at the closure of the financial year, no need to file FLA for 31/03/2023

Regards

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