FEMA refers to the Foreign Exchange Management Act. It is the legislation that regulates foreign exchange transactions in India, including inflow and outflow of foreign exchange and investments between India and other countries.

An important compliance under FEMA that private companies must follow is filing the FLA ( Foreign Liabilities and Assets) Return. Companies have to file the FLA return with the RBI if the company has received foreign direct investment or has made overseas investment in any of the previous year(s), including current year.