Securities and Exchange Board of India issued guidelines vide circular dated 01.06.2021, for relocation of foreign funds to the International Financial Services Centre (IFSC). Following guidelines are announced:
- Tax incentives are available under Finance Act, 2021 for relocating foreign funds to International Financial Services Centre (IFSC).
- For relocation, a Foreign Portfolio Investor (FPI) or its wholly-owned special purpose vehicle may approach its Designated Depository Participants (DDP) for approval of a “one-time ‘off-market’ transfer of its securities to the ‘resultant fund’.
- The DDP after appropriate due diligence may accord its approval for a one-time ‘off-market’ transfer of securities for such relocation.
- Relocation request will imply that the FPI has deemed to have applied for surrender of its registration and the DDP may be guided by the guidelines pertaining to surrender of FPI registration.
- The ‘off-market’ transfer shall be allowed without prejudice to any provisions of tax laws and FEMA.
*Tanvi Singh, Editorial Assistant has put this story together.