Simplified Banking in GIFT IFSC for Foreign Companies

19 October 2023

Historically, the PAN (Permanent Account Number) requirement has been a significant obstacle for foreign companies wishing to establish bank accounts in GIFT IFSC. Obtaining a PAN entailed additional compliance in a new jurisdiction, which deterred many from exploring banking opportunities within GIFT IFSC.

๐๐€๐ ๐„๐ฑ๐ž๐ฆ๐ฉ๐ญ๐ข๐จ๐ง: Now, foreign companies can bypass the PAN requirement when opening a bank account in GIFT IFSC. They simply need to submit Form No. 60 to the International Banking Units (IBUs) operating in GIFT IFSC.

๐Š๐ž๐ฒ ๐‚๐จ๐ง๐๐ข๐ญ๐ข๐จ๐ง๐ฌ: These foreign companies should not have any income that is chargeable to tax in India.

๐Š๐ž๐ฒ ๐ƒ๐จ๐œ๐ฎ๐ฆ๐ž๐ง๐ญ๐ฌ ๐ซ๐ž๐ช๐ฎ๐ข๐ซ๐ž๐ ๐ญ๐จ ๐›๐ž ๐ฌ๐ฎ๐›๐ฆ๐ข๐ญ๐ญ๐ž๐ ๐š๐ฅ๐จ๐ง๐  ๐ฐ๐ข๐ญ๐ก ๐…๐จ๐ซ๐ฆ ๐๐จ. 60 ๐›๐ฒ ๐ญ๐ก๐ž ๐…๐จ๐ซ๐ž๐ข๐ ๐ง ๐‚๐จ๐ฆ๐ฉ๐š๐ง๐ฒ:
- Certificate of Registration or incorporation from its home country.
- Tax identification number issued in the home country.
Both documents must be duly attested by authorized officials of the IFSC banking unit.

๐”๐ฌ๐ž ๐‚๐š๐ฌ๐ž๐ฌ:
1. Indian founders who have flipped their structures offshore might find banking in GIFT IFSC attractive due to its closeness to the Indian mainland.
2. Additionally, IBUs in GIFT IFSC hold an advantage over neo-banks, adeptly handling challenges such as FIRC, KYC for inward remittances, and other FEMA compliances.
3. In light of the recent SVB bank collapse, cross-border SaaS companies and startups, including those backed or funded by overseas accelerators that relied solely on SVB or had a single banking relationship, might view GIFT IFSC as an alternative or backup banking option.

For a copy of the CBDT notification, refer to the link here.

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