Annual Performance Report for Overseas Direct Investment: Applicability, Audit Position, Due Date and Consequences of Delay
This article explains the Annual Performance Report (APR) that a resident person with Overseas Direct Investment (ODI) must submit under the Foreign Exchange Management (Overseas Investment) Regulations, 2022 and the Foreign Exchange Management (Overseas Investment) Directions, 2022.
Authorised Dealer (AD) Banks are now writing to Indian businesses that hold foreign subsidiaries or joint ventures and asking for the APR, with requests being received for the year 2025-26. A request of this kind is a prompt to examine the obligation entity by entity, settle the audit position early and clear any earlier year that remains open, since the cost of delay is not limited to a fixed fee.
Q&A on the APR
What is the APR and what does it contain?
The APR is a periodic report on a foreign entity in which a resident person has made ODI. It is submitted through the designated AD Bank under the procedure in the Overseas Investment Directions, 2022. It is not a return of profit; the obligation does not depend on the foreign entity having earned anything.
The report covers:
- the financial position and performance of the foreign entity;
- changes in shareholding;
- repatriation from the foreign entity; and
- specified events involving step-down subsidiaries.
Who files, and is a separate report needed for each foreign entity?
An APR is required separately for each foreign entity, each of which carries its own Unique Identification Number (UIN). An investor with several overseas entities therefore examines the obligation entity by entity and cannot treat one filing as covering the group.