The move by the International Financial Services Centre (IFSC), the regulator of the special economic zone, should draw top financial services companies from across the world, helping localise services that are typically offered overseas.
“An entity shall commence business as a Finance Company or Finance Unit, as the case may be, in International Financial Services Centres (IFSCs) only after obtaining a certificate of registration from the Authority…,” North Block said in a note.
A Finance Company can be set up either as a subsidiary or a joint venture, or as a newly-incorporated company under the Companies Act, 2013.
“There are many overseas entities including non-banks, which are keen to set up financial services businesses in India. IFSC provides a great platform and flexibility in terms of ownership, competitive tax regime and ability to repatriate funds freely,” said Dipesh Shah, head development, IFSCA.
“Those entities can be set up at IFSC through a single-window clearance under the unified regulator – IFSCA,” he said.
Similarly, the move will also help large local NBFCs seeking global exposure.
Seven core activities are permitted. While a company can lend in the form of loans, commitments and guarantees, securitisation, and sale or purchase of portfolios, it can undertake investments, including subscribing, acquiring, holding, or transferring securities or such other instruments.
Equipment leasing is also allowed with Finance Companies that can run global or regional corporate treasury operations.
Under non-core activities, FCs can run portfolio management services, merchant banking services, investment advisories, and trusteeship services. They can sell units of mutual funds and insurance products via the same platform.
Asset Management support services can also be undertaken through the Framework for Ancillary Services.
